Hedge fund manager Man Group has reported a rise in funds under management after strong demand for alternative assets.
The firm reported funds under management (FUM) rose to $113.1bn in the three months to September, as alternatives saw a $1.7bn inflow after a slowdown in redemptions. And a good market performance by the long-only funds added $1.7bn despite a $200m outflow.
The US dollar’s weakness against both sterling and the euro resulted in $1.4bn in positive FX and other movements.
At quarter end the $43.7bn of performance fee eligible FUM was at, above or within five per cent of high watermark, of which AHL Alpha is “the most significant individual component crystalling in the second half.”
Chief executive Luke Ellis said Man Group had had a “good” performance in the quarter, driven by “robust net inflows into alternatives as anticipated”.
“Engagement with clients remains good, although there is increasing uncertainty due to upcoming political events and current COVID-19 trends.”
The firm’s FUM had slumped 11.5 per cent to $104.2bn in the first quarter because of market volatility due to the pandemic.
Man Group said it lost $10.7bn on negative investment performance and $3.3bn on currency and other movements.
Credit Suisse analysts said they were cautious on the outlook for continued Alternative Risk Premia fund flows where the strategy has delivered annualised returns of -1.5 per cent over three years. But they acknowledged that the strategy has performed relatively well against competitors “and so remains popular with institutional allocators”.
“Our immediate priorities continue to be the health and well-being of our colleagues and the performance of our clients’ assets. Our diversified range of strategies, our people and technology and a sustainable business model, underpinned by our strong and liquid balance sheet, allow us to manage the firm for the long term”, Ellis said.
“Man Group is well-placed to withstand volatile periods and to grow over time, delivering increasing value to all our stakeholders.”
Shares jumped more than six per cent.