Man Group impresses with stellar profits growth

25th Feb 2015 08:17

Hedge fund giant Man Group impressed with full year results driven by acquisitions, with surging sales and performance fees from its AHL quant funds.Assets rose 35% to $72.9bn (£47bn) in 2014, with redemptions from group funds declining 6%. Adjusted profit before tax was up 62% at $481m and adjusted eps up 73% at 24.4 cents.Gross sales rose 36% to $21.9bn as the AHL Diversified trend-following fund returned 32%, making it one of the best-performing hedge funds in the world over the last 12 months.AHL Evolution and AHL Currency Fund, both smaller than AHL Diversified, rose 20% and 59% respectively, in what broker Shore Capital described as "a stellar year" for the family of algorithm-driven funds.AHL's performance drove gross performance fees up 90% to $367m."Despite the strong performance across the AHL range in 2014 we do not expect to see a meaningful pick-up in demand for these products until later in the year," cautioned group chief executive Manny Roman."This, coupled with a slowdown in sales across our discretionary strategies and the ongoing volatility of the markets in which we operate, means that we remain cautious in our near-term outlook."The group, the world's largest publicly-traded hedge fund firm, added over $16bn in assets in 2014 and, earlier this month, reached a deal to buy the equities management business of NewSmith, adding $1.2bn of funds under management.The London-based firm added it will repurchase $175m of shares and has surplus regulatory capital of $419m as of the end of 2014.Shore Capital reiterated its 'buy' rating on the stock, describing Man Group as "the best fit for our key thematic drivers for an active fund manager around escaping the fee deflation of ever cheaper passive strategies though the use of performance fees."