The Man Group's flagship strategy suffered its biggest monthly drawdown in more than a decade, sending its share price tumbling in a rude welcome to new CEO Emmanuel Roman and new AHL chief Sanday Rattray.
AHL Diversified dropped 8.74% last month, erasing year-to-date gains that indicated that the quantitative fund might have turned a corner; prior to May, AHL had posted positive returns in six straight months. The $14.1 billion strategy is now down 0.59% on the year.
Roman, who took the reins at Man at the end of February and placed a number of former GLG Partners executives—like himself—in top posts, including former GLG adviser Luke Ellis as president and Rattay at AHL. Man bought GLG in 2010.
AHL's May losses led UBS to cut Man's rating to neutral from buy, and sent shares down almost 17% on the day.
"Man Group remains highly dependent on AHL, which has had a 12% pullback from its recent peak, leading to a significant cut to earnings, but also reducing the probability of flows turning," UBS analyst Arnaud Giblat wrote to clients today.