17th Apr 2020 10:13
(Alliance News) - Man Group PLC said Friday its assets under management contracted amid the market decline caused by the virus pandemic.
Despite the fall in funds, Man Group said its balance sheet and liquidity remains "robust".
As a result, it intends to proceed with its dividend distribution and continue with its share buyback as planned.
At March 31, Man Group's FuM stood at USD104.2 billion, down 11% from USD117.7 billion at the end of 2019.
Chief Executive Luke Ellis commented: "Given the extreme volatility in all markets, we are pleased to have outperformed peers on an asset weighted basis across the firm by 2.5% in the first quarter, and to see our absolute return strategies make gains for clients despite the large sell off seen.
"We saw net inflows in the quarter and continue to win mandates but we have seen a recent increase in redemptions as clients adjust their allocations in response to the market moves and heightened economic uncertainty."
While Man Group was able to record USD500 million in net inflows in the quarter, market movements shaved USD10.7 billion off funds. Foreign exchange movements subtracted a further GBP3.3 billion.
Man's Alternative strategies were the main culprit for this, with forex movements taking USD2.4 billion off the asset class. As a result, Alternative funds slipped 2.1% to USD70.0 billion. On a brighter note, Alternative strategies were able to record USD1.6 billion in net inflows in the quarter - with the main contributor coming from Total Return funds.
Elsewhere, Man's Long-only strategies fell 26% to USD34.2 billion.
"As the impact of Covid-19 was felt across global financial markets our long-only strategies suffered both from net outflows and negative investment movements in the first quarter," the asset manager explained.
At March 31, Man Group had USD570 million of net financial assets, including USD253 million of cash.
"This balance sheet and liquidity position reflects actions we took in 2019. We repaid our financial indebtedness by calling our Tier 2 notes and entered into a new USD500 million revolving credit facility which matures in 2024," Man Group said.
Shares in Man Group were 3.7% higher in London on Friday morning at 126.65 pence each.
By Paul McGowan; [email protected]
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