Institutional investors return to Man

4th Nov 2010 08:21

Funds under management (FuM) at the end of the third quarter were $1bn ahead of Man Group's expectations, helped by strong investment performance and favourable currency movements at the end of September. On 28 September the hedge fund manager had estimated FuM at the end of September would be $39.5bn, but the final figure was $40.5bn. FuM at the end of June totalled $38.5bn.The figures exclude the group's recent acquisition of investment management firm GLG Partners."With many investors remaining on the sidelines, the six months to 30 September were characterised by a similar mix of muted sales ($2.1bn) and low redemptions ($3.7bn) to the previous six months. However, there was a slight pick-up in sales in Q2 ($1.4bn compared to $0.7bn in Q1)," the company statement said. Although private investor flows remained slightly negative, at $0.7bn, the group saw its first quarter of positive institutional flows in more than two years. Institutional redemptions are expected to remain low in the third quarter, with $0.2bn of quarterly institutional redemptions paid on 1 October 2010.Man's flagship fund, AHL, saw FuM rise 6.6% in the six months to end-September. AHL was 6.0% from high water marks on a weighted average basis, the company said.Integration of GLG is well advanced, with marketing campaigns under way for focus GLG strategies in each region, and the first product to blend AHL and GLG is scheduled for launch in the first quarter of 2011.Since GLG last reported to the market on 30 June 2010, there have been net inflows of around $0.1bn into alternative strategies and $0.3bn into long only strategies, together with positive investment and foreign exchange movements. Funds under management for the combined business at the end of October are estimated at $67bn. Underlying profit before tax at the interim stage was $227m, down from $292m last year. After adjusting for $47m of deductions relating to the GLG acquisition and pre-acquisition rationalisation costs, pre-tax profit more than halved to $147m from last year's $302m."In the lead up to the acquisition of GLG, both Man and GLG delivered excellent investment performance - the key catalyst to flows. AHL returned 9% in the calendar year to end September, and GLG's range of alternative and long only strategies continued to perform strongly," said Peter Clarke, chief executive of Man.An interim dividend of 9.5 cents (5.91p) has been proposed. The board intends to propose a full year dividend of at least 22 cents a share.