27th Feb 2014 08:54
LONDON (Alliance News) - Man Group PLC shares soared Thursday as Europe's biggest listed hedge fund manager said it swung to a profit in 2013, net outflows halved, client redemptions declined and its investment performance improved, although it said it remains cautious about its prospects this year.
Man Group reported a pretax profit of GBP56 million for the year, compared with the GBP748 million loss it reported in 2012 when it booked large goodwill and impairment writedowns.
The hedge fund was hit hard by the financial crisis and ensuing economic downturn which hit the performance of its funds and prompted massive client redemptions and fund outflows. Man also proved to be too heavily reliant on its AHL fund. It merged with GLG Partners in 2010 and has since added other funds, giving a better balance, but analysts still think it needs to diversify further.
Client redemptions fell 2% to USD19.7 billion in 2013, from USD20.1 billion in 2012, while net outflows halved to USD3.6 billion, from USD7.3 billion, and even turned into a USD0.7 billion in flow in the fourth quarter of the year. Its investment movement was USD4.3 billion,
Hedge funds managed by GLG posted positive returns, but AHL, which remains Man Group's biggest fund, lost money for a third consecutive year.
Man Group said it intends to buyback USD115 million of shares, as it remained on track to cut costs by USD270 million by the end of 2015. It will pay a final dividend of 5.3 cents for 2013, bringing the total dividend for the year to 7.9 cents.
"We largely completed the restructuring of our cost base and balance sheet during the year, and continued the development of new business areas. Investment performance in 2013 was reasonable on a relative basis and flows showed modest recovery towards the end of the year after a weaker first half," Chief Executive Manny Roman said.
"However, market conditions remain challenging and we maintain our cautious outlook," he added.
Its shares were up 9.04% at 91.70 pence early Thursday, the second-biggest rise on the FTSE 250.
By Steve McGrath; [email protected]; @stevemcgrath1
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