And the money keeps rolling in….
Man Group on Thursday released well-flagged numbers for the full year which showed profits up 27 per cent to $1.3bn, on record overall sales and record sales to institutions, with assets reaching $61.7bn at the end of March.
More noteworthy though is the latest AUM figure. Having said back in January that it had passed the $60bn watermark, another benchmark has already fallen. Funds under management are currently estimated to be more than $65bn – an increase way ahead of expectations since the year end.
That comes despite a poor patch for Man’s flagship fund, AHL, which finished last year down 4.8 per cent. Over three years, the performance of the managed futures fund is just 3.6 per cent – hardly a knock-out number.
The rise of more than $3.5bn is broadly split between sales and an improved performance for AHL in the first two months of the year, with a strong April and positive in May to date also.
As volatility increases, the trend followers are the most likely to get whacked. Earlier this year, AHL dropped 8 per cent in one week. The year has started positively, but that not to say that the fund’s performance won’t plummet next week, cautions Michael Sanderson at DK.
Man trades at a discount to the UK asset management sector, mainly because of its reliance on performance fees from AHL. Performance fee income at Man fell 20 per cent last year, but the fund is back to the point where it will earn fees for continued positive performance.
Man seems to be able to flog its products despite the backdrop of a weak performance from AHL. The planned IPO of the brokerage business, renamed MF Global, in the third quarter of this year focuses attention squarely on the investments business. And Man is consciously trying to build products and brands that are apart from, and uncorrelated to AHL – with the NY listing of a fund that mixes AHL with quantative long-short equity manager Tykhe, Pemba, a credit manager taken out of RMF, and Bayswater, a quant global macro manager.