Man Group profit keeps shrinking

24th Mar 2010 07:49

Things didn't improve for hedge fund manager Man Group during the second half, leaving it facing a 57% slump in full year profit before one-off items. Profit before tax and $20m of exceptional costs for the year to 31 March is expected to be $530m following a second half profit of $238m, down from $292m in the first six months. Last year the group made $1.24bn and a total profit before tax of $743m.Net management fee income of $205m in the last six months of the year should result in an annual decline to $450m from $885m in 2008/09. Man blamed lower average funds under management (FuM) and $30m in non-recurring items of sales commission in the second half. FuM at 31 March 2010 are currently estimated at $39.1bn, down from $44bn at the end of September and $46.8bn a year ago.Net performance fee income is estimated to be around $80m compared with $358m the previous year.The company's flagship fund, AHL, had a "difficult" 2009 as gains in stock indices and metals were more than offset by sudden market reversals in currencies and bonds.This resulted in a 6% performance decline in AHL in December, hitting sales and investment exposure in the fourth quarter. But AHL is up over 2% so far in 2010, driven by currencies and interest rates, and over 5% better for the month to 22 March. Shareholders will get a final dividend of 24.8 cents a share, leaving the full-year payout unchanged at 44 cents.Results are due on 27 May.