Man Group stems client outflow fears and unveils share buyback

SHARES in Man Group rose as much as five per cent yesterday after the hedge fund manager said outflows had slowed in October, stemming fears that withdrawals were accelerating.

But assets under management fell by around $1bn (£625m) during the month to $63.5bn, as its flagship AHL fund continued to perform poorly.

Pre-tax profits fell on a year-on-year basis, coming in at $195m, compared to $227m in the same period in 2010. However, they were above pre-close estimates of $185m due to additional performance fees.

Man also announced it would start a $150m share buyback, to be completed by the end of the year, using part of its $1bn surplus of regulatory capital to fund the repurchase.

Chief executive Peter Clarke said the group would reveal full plans for the rest of its regulatory capital in March but struck a cautious note in his presentation, admitting that market volatility had challenged investors’ risk appetite in the summer.

“We are planning on the basis that investor appetite will remain subdued whilst markets remain volatile and uncertain,” he said, but added that the group was “well positioned to capture demand when sentiment improves and investors return to markets.”