Man Group AUM Dips to $76.4B as First Half Volatility Hits Home

Jul 26 2016 | 10:23pm ET

Assets under management at global hedge fund manager Man Group fell in the first half as investment losses outweighed a small gain in net new assets.

Man Group, which is also home to well-known alternative asset brands GLG, AHL, Numeric and FRM, said on Tuesday that net inflows totaled $1 billion over the period due largely to demand for its quantitative and systematic trading strategies. In the first half of last year, the firm experienced net outflows of $2.6 billion.

However, market losses shaved some $2.2 billion from the value of Man’s funds and a further $1.1 billion was lost through currency and other impacts, the company said in a statement. Accordingly, total assets under management fell to $76.4 billion at the end of June, compared with $78.7 billion at the end of December 2015.

"The first quarter of the year was a highly volatile period in financial markets,” said outgoing Man Group CEO Emmanuel Roman in the statement. “AHL's momentum strategies performed well, but it was a difficult time for our long-only strategies." 

Roman, who leaving Man to become CEO of bond powerhouse PIMCO on November 1, described the first half of the year as “particularly challenging” in the company’s release. 

Despite the popularity of systematic and quantitative funds, many of the company’s vehicles had a difficult six months. AHL’s flagship Diversified Fund lost 6% in the second quarter, according to Bloomberg, while half of GLG’s twelve alternative investment funds were in red during the half, including the GLG European Long Short fund, which lost 5%. 

Accordingly, profits from performance fees were slammed, falling from $172 million a year ago to a mere $8 million in 2016’s first half, while management fees fell to $381 million from $428 million. Overall, earnings at the company fell to $98 million from $280 million in the comparable period last year. The stock, already down more than 30% going into the earnings release, fell a further 4% in late New York trading. 

For what it’s worth, Roman added that he sees limited impact so far from Britain’s Brexit vote, although the longer-term outlook remained uncertain. Given the advance notice typically required for hedge fund redemptions, the full impact of the Brexit vote on Man’s business remains to be seen.  

London-based Man Group, which traces its heritage back to the 1783 founding of a sugar coop and brokerage company by James Man, is the largest listed hedge fund manager in the world. 

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