Man Group Reports Q1 Outflows, Plans Debt Buyback

May 3 2013 | 9:41am ET

The Man Group registered net outflows of $3.7 billion in Q1 2013, as the largest publicly traded hedge fund reported positive results and a plan to buy back its own debt.

Man's assets under management fell to $54.8 billion as of March 31, 2013, from $57.0 billion at end-2012.

The firm's flagship AHL Diversified program added 4.2% in the first quarter and, as of April 29, was up 10.4% year to date. The majority of Man's GLG alternative strategies were up over the same period, led by the long-only Japan Core Alpha fund, up 24.0%.

In an effort to bolster its stock price, Man announced plans to buy back about $470 million of its own debt, using funds freed up by a change in the way it calculates its capital position. Man plans to call or redeem, with cash, all tier 1 hybrid, tier 2 and senior debt securities, a move it says will save it roughly $78 million in interest payments. Man shares jumped 9% Friday morning on news of the buyback.

Manny Roman, who became chief executive officer of Man this year, said Q1 was a “disappointing quarter from a flows perspective with sales at a similar level to the previous quarter and increased redemptions, chiefly due to the loss of three sizeable low-margin mandates.

“Investment performance is the lifeblood of our business and in time we expect good performance to translate into flows. However, we remain cautious in our outlook as we will need a more sustained period of performance, particularly from AHL, before we see an improvement in net flows. We continue to make good progress against our key business priorities and the recently announced improvement in our capital position, together with our announcement today of the intended buyback of our debt securities, has delivered value for shareholders.”


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