MAN Group saw client assets rebound more strongly than expected, boosting its shares and raising the prospect that the world’s largest listed hedge fund company can finally start winning back investors.
Man – which has just bought smaller rival GLG with its $25bn (£15.4 bn) of assets to become less reliant on computer-driven funds -- said it ran $40.5bn at the end of September, $1bn more than an earlier forecast.
Stronger returns from Man’s flagship fund AHL have driven the recovery. AHL, the $21.9bn fund that latches onto trends in global futures markets, is named after 1980s founders Michael Adam, David Harding and Martin Lueck. The funds have recently benefited from the weakness of the dollar.
“This better run from AHL combined with the potential from the GLG acquisition provides Man with strategic opportunities for the second half of 2011 and into 2012,” said Evolution’s Michael Sanderson, who yesterday published a ‘buy’ recommendation on the stock.
Man declined to say whether October marked a turnaround in outflows after clients pulled out money for the eighth straight quarter in the three months to the end of September, even as the wider industry has started to win back clients. The shares surged 12.6 per cent to close at 290.8p after the announcement, having underperformed the FTSE All-Share by 24 per cent so far this year. Man said that client outflows – institutional as well as private investor money – in the three months to 30 September were $600m.
The firm also said pre-tax profit for the six months to September before adjusting items was $227m, above the $215m it forecast in September.
Man has said it will make $50m worth of cost savings in the aftermath of the GLG takeover and analysts are expecting around 180-200 redundancies.