'Long only' funds take a bashing at Man

28th Sep 2011 07:24

Hedge fund manager Man Group saw a return to form of its flagship fund AHL in the second quarter of its financial year, as its 'alternative style' policy paid off, but the group's 'long only' portfolios took a battering over the same period.The company's total funds under management at the end of September stood at $65bn, less than in March when the figure was £69.1bn and down $7bn since the end of June.Redemptions increased from $5.3bn in the first quarter to $7.1bn in the second.Over the half year the company has seen sales of its products fall from $9bn in the first three months to $4.5bn in the second as investor sentiment has worsened, presumably as a result of a slow US economy and European debt fears.On the bright side, AHL generated $1.5bn of positive investment movement in the company's second quarter, taking the half-year total to a positive moment of $0.9bn.The GLG alternatives funds delivered a mix of positive and negative performance across styles, but were $1.1bn negative for the second quarter, contributing to a negative movement of $1.4bn for the whole of the first half. The Institutional fund of funds performance was flat for the second quarter, meaning the half-year performance was negative to the tune of $0.3bn.On the long only side of the business - funds that are not allowed to sell stock they do not own - the GLG funds suffered a negative market movement of $1.9bn in the second quarter.Total profits before tax at Man between April and September hit $145m, worse than in the period between January and June ($180m)The earnings per share of the firm has also fallen since June, down from 7.6 cents to 5.7 cents.The interim dividend will be maintained at 9.5 cents per share while the firm claims its fundamental position is strong with a capital surplus of $1bn net cash of $700 million and total available liquidity resources of $3.4 billion.The chief executive of Man, Peter Clarke said of the results"The extreme volatility of markets in recent months has created challenging performance conditions across asset classes. This has tested investor appetite for risk but also reinforced the need for diversifying, non-correlated investment returns ... As anticipated, investor sentiment continued to weaken across the summer with lower sales in our second quarter and some increase in redemption rates, notably in September."BS