InvestmentsAug 1 2014

Man Group earnings nudge up as costs falls

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Decent earnings from the UK-listed hedge fund manager, but some of its funds seem to be struggling, reports FastFT.

Man Group has reported that its adjusted pre-tax earnings edged up 10 per cent to $148m in the first half of the year, and its overall assets under management climbed to $57.7bn.

The increase in the hedge fund’s overall size came despite self-admittedly “mixed” performances for its various strategies. The flagship AHL quantitative fund gained 8.7 per cent in the six months to June 30, but the main GLG fund lost 1.9 per cent and its Japanese investment vehicle shed 1.4 per cent.

As a result, its management and performance fees dropped from the same period last year, but compensation fell 18 per cent to $196m and other costs were also trimmed. On a statutory, pre-tax basis that doesn’t take into account amortisations, Man Group’s profit dipped 13.2 per cent to $106m

Man Group has been using some of its surplus capital to snap up complementary businesses in the US, most recently paying an initial $219m for Boston-based Numeric, another quant fund. That will see Man take over its $14.7bn portfolio and add to the UK hedge fund manager’s overall size.

That acquisition – as well as a smaller deal for Pine Grove, a US credit fund of funds – are due to be completed later this year.

Manny Roman, chief executive officer of Man, said: “Whilst it has been a positive first half for the firm and we recorded another quarter of net inflows in Q2, we remain cautious as we look to the second half of the year.

“Investment performance in H1 was mixed amid a continued volatile market environment. AHL performed strongly on an absolute and relative basis across all its alternative strategies.

“Performance elsewhere was good in credit and discretionary long only, but below expectations in equities and macro.”