MAN GROUP set its face to the future yesterday, focusing on its planned takeover of GLG Partners despite a drop in profits caused by poor performance at its flagship hedge fund.
Pre-tax gains at the listed investment juggernaut slipped 27 per cent to $541m (£372m), while funds under management fell almost 16 per cent to $39.4bn at the end of March. Man said the gush of outflows slowed to a drip in the first quarter, with asset levels roughly unchanged between March and May.
In a conference call, chairman Jon Aisbitt described 2009 as an “extraordinarily volatile and difficult year”. At the heart of Man’s woes was AHL, its black-box quantitative strategy, which saw 7.7 per cent of its value evaporate during the 12-month patch.
But shares in Man soared 10.7 per cent to 238.3p as investors bought into management’s brighter outlook for the year ahead. Man will put its decision to spend $1.6bn on GLG, the American mutual fund manager, to a shareholder vote later in the summer. The group hopes to diversify its product range through the deal, which will give it access to talented traders like Pierre Lagrange and a selection of onshore long/short equity funds.
Chief executive Peter Clarke said the company was entering “a period of significant opportunity in [the hedge fund] industry”. “[Man and GLG] are very complementary in terms of the location and type of their investors,” he said, suggesting Man would market GLG’s funds heavily in Asia.
Man confirmed a final dividend of 24.8 cents per share, bringing the final dividend to 44 cents per share for the year. It predicted a total dividend of at least 22 cents per share next year.
Analyst Mick Gilligan of Killik & Co held Man on a “buy” recommendation. Gilligan said fears over possible departures of key personnel at GLG were offset by the prospects for long-term synergies through the tie-up.