Man reports FUM of USD52.7bn

Date: Wednesday, July 25, 2012
Author: Emily Perryman, HedgeWeek

Funds under management at Man Group totalled USD52.7bn at 30 June 2012, down from USD58.4bn at 31 December 2011.

The figure reflects sales of USD7.2bn, redemptions of USD9.6bn, investment movement of -USD0.3bn, FX translation effects of -USD0.5bn and other movements, principally guaranteed product degears, of -USD2.5bn, according to the company’s latest interim results.

Adjusted profit before tax (PBT) was USD121m, comprising adjusted net management fee PBT of USD108m and net performance fee PBT of USD13m.

The group reported a statutory loss before tax on continuing operations for the six months ended 30 June 2012 of USD164m, reflecting impairment of goodwill associated with GLG (USD91m) and Man Multi-Manager (USD142m).

Man Group is on track to deliver USD95m of operating cost savings announced in March 2012, with further annual cost savings of USD100m planned over the next 18 months.

The company’s surplus regulatory capital totals USD704m at 30 June 2012, net cash of USD564m and total liquidity resources of USD3.0bn, while Man is to pay an interim dividend of 9.5 cents per share, with the total dividend for the year expected to be 22 cents.
 
Peter Clarke, chief executive of Man, says: “Against a turbulent market and economic background, Man’s funds under management have declined in the period principally as a result of continued net outflows and the deleveraging of our guaranteed products. The result is a marked decline in underlying profitability which, after goodwill impairments, produced a statutory loss.
 
“We have made progress in the last six months to address costs across our business and we continue to expand our investment management capabilities both organically and through acquisition. At AHL we have continued to refine our trading models, invested in senior hires and seen signs of improvement in performance versus leading peers. GLG generated over two thirds of our USD7.2bn sales in the period, delivered strong performance in credit strategies, market neutral and European long short styles and launched complex thematic products such as TailProtect. The FRM acquisition closed on 17 July, ahead of schedule, and creates the largest independent non-US based fund of hedge funds in an industry where economies of scale are a critical success factor. Across the board, we are on track to achieve our previously announced cost saving programmes.

“Our focus is on delivering attractive levels of profitability from our liquid, open-ended investment strategies and so reducing reliance on high margin guaranteed product which is seeing subdued demand. To align our infrastructure appropriately to this dynamic in the business, we have today announced further cost savings of USD100m, to be achieved over the next 18 months.”