7th Jul 2011 07:00
Press Release
7 July 2011
INTERIM MANAGEMENT STATEMENT for the quarter ended 30 June 2011
Key points
·; Funds under Management (FUM) at 30 June 2011 of $71.0 billion(31 March 2011: $69.1 billion)
·; Record sales in the quarter of $9.0 billion to give a net inflow of $3.7 billion after redemptions of $5.3 billion
o Recently launched open ended onshore AHL fund in Japan now has $2.3 billion under management
o Revenue synergies from the GLG acquisition include $1.0 billion from an emerging markets currency product in Japan and $400 million from the first guaranteed product blend - Man IP 220 GLG
·; Challenging market conditions led to $1.1 billion of negative investment movement in the quarter
o AHL down 0.6% in the period, and 12% from peak on a weighted average basis
o Within GLG's diverse product range, European long short and European distressed styles had positive performance in the period and global macro and other long short strategies were negative
·; Other movements of $1.8 billion were driven by routine rebalancing of investment exposure in the guaranteed products after negative AHL performance in the rebalancing period; FX movements added $0.8 billion; acquisition of the remaining 50% of Ore Hill added $0.3 billion
·; Financial position remains strong, with a regulatory capital surplus of around $900 million,net cash of around $900 million and total available liquidity resources of around $4.8 billion.
Peter Clarke, Chief Executive of Man, said:
"We are pleased to be reporting strong net inflows from investors over the last quarter. Following the successful integration of GLG at the end of 2010, we are seeing revenue synergies building, with investor flows into AHL, GLG strategies, and combination products.
"Current markets are creating challenging performance conditions for most asset classes, and our assumption is that investor sentiment will remain patchy over the summer months. The combination of our broad range of liquid investment styles, ability to craft portfolio solutions for investors, and the wide geography of our franchise, is a key advantage in these markets."
FIRST QUARTER FUM COMMENTARY
Asset flows
Man saw net inflows of $3.7 billion in the first quarter, reflecting record sales of $9.0 billion and redemptions consistent with historical levels, at $5.3 billion. There was a net inflow into alternative funds of $4.1 billion and an outflow of $0.4 billion from long only styles.
Guaranteed products saw their highest sales for two years, at $0.5 billion, driven by the launch of Man IP 220 GLG, the first guaranteed product to combine AHL and GLG styles. Guaranteed redemptions held steady at $0.6 billion.
Sales of open-ended alternatives were a record $6.2 billion and redemptions were $2.0 billion. Within this category, AHL sales of $2.9 billion reflect the recent launch of the first onshore open-ended managed futures product in Japan, which now has $2.3 billion under management. GLG sales accelerated to $3.3 billion with strong flows into equity long/short and emerging markets styles, largely in Europe. The $1 billion raised from an emerging markets currency product in Japan - a territory where GLG had very few investors before its integration into Man - provides tangible evidence of the benefits of combining GLG content with Man's strong distribution network.
Net flows into institutional fund of funds were flat, with sales of $0.8 billion driven by demand for commodity and convertible style funds, as well as a small amount of funding to previously announced managed account mandates. $2 billion is still to fund from previously announced mandate wins at Universities Superannuation Fund and Bayerische Versorgungskammer. Quarterly institutional redemptions on 1 July 2011 are around $470 million.
Long only styles saw sales of $1.5 billion and redemptions of $1.9 billion. The majority of this flow reflects the migration of Japan Core Alpha FUM from a legacy low margin mandate to other higher margin vehicles.
Investment performance
Investment performance had a $1.1 billion negative effect on FUM in the first quarter.
AHL Diversified plc was down 0.6% in the three months to 30 June 2011, leaving AHL approximately 12% below peak on a weighted average basis. AHL has remained defensively positioned in bonds, but has significantly reduced its short exposure to equities. In FX, its prevalent exposure has been to be long a basket of currencies against the US dollar. Over the period, AHL has seen flows-driven asset growth of 5%.
Performance for GLG's range of alternative investment styles was generally negative in the quarter, with the Global Opportunity Fund (which allocates across GLG strategies) down approximately 2%. Returns in the period ranged from positive performance in European long short and European distressed to negatives in global macro and other long short strategies. Performance in long only styles was broadly flat in the quarter.
Other movements
FX generated a positive contribution of $0.8 billion in the first quarter, mainly due to the strengthening of the Euro, Swiss Franc and Japanese Yen against the US dollar.
The routine rebalancing of investment exposure in guaranteed products led to a negative $1.8 billion of other movements, driven by 5.4% of negative performance from AHL in the rebalancing period.
FUNDS UNDER MANAGEMENT ANALYSIS
3 months to 30 June 2011
Guaranteed | Open ended | Institutional FoF and other1 | Total Hedge Funds | Long only | Total | ||
$bn | Man $bn | GLG $bn | $bn | $bn | $bn | $bn | |
FUM at 31 March 2011 | 15.1 | 13.7 | 13.6 | 12.7 | 55.1 | 14.0 | 69.1 |
Manager Acquisitions(Ore Hill) | 0.3 | 0.3 | 0.3 | ||||
Sales | 0.5 | 2.9 | 3.3 | 0.8 | 7.5 | 1.5 | 9.0 |
Redemptions | (0.6) | (0.6) | (1.4) | (0.8) | (3.4) | (1.9) | (5.3) |
Net inflows/(outflows) | (0.1) | 2.3 | 1.9 | 0.0 | 4.1 | (0.4) | 3.7 |
Investment movement | (0.4) | (0.2) | (0.3) | (0.3) | (1.2) | 0.1 | (1.1) |
FX | 0.1 | 0.1 | 0.2 | 0.3 | 0.7 | 0.1 | 0.8 |
Other | (1.8) | 0.1 | (0.1) | 0.1 | (1.7) | (0.1) | (1.8) |
Closing FUM | 12.9 | 16.0 | 15.3 | 13.1 | 57.3 | 13.7 | 71.0 |
1) Includes Pemba/Ore Hill and Man Convertibles ($4.8 billion at 30/6/2011)
FUNDS BY MANAGER
30 June 2011 $bn | 31 March 2011 $bn | |
AHL | 23.9 | 22.7 |
GLG | ||
Long only | 13.7 | 14.0 |
Alternatives | 20.2 | 18.0 |
- Equity | 9.0 | 8.3 |
- Credit and Convertibles1 | 6.9 | 6.5 |
- Emerging markets | 3.6 | 2.6 |
- Macro and special situations | 0.7 | 0.6 |
Multi-Manager | 13.2 | 14.4 |
Total | 71.0 | 69.1 |
1) Includes Pemba/Ore Hill and Man Convertibles ($4.8 billion at 30/6/2011)
INVESTMENT PERFORMANCE
Total return | Annualised return | |||
2 months to 31 May 2011 | Calendar year to 31 May 2011 | 3 years to31 May 2011 | 5 years to31 May 2011 | |
Fund of funds | ||||
Man Absolute Return Strategies1 | 0.2% | 0.5% | 0.3% | 2.9% |
Man Dynamic Selection2 | -0.2% | -0.7% | 0.9% | 4.4% |
Structured - principal protected | ||||
Man-IP 2203 | 2.9% | -4.9% | -2.2% | 4.8% |
AHL | ||||
Man AHL Diversified plc4 | 2.6% | -4.5% | 0.7% | 7.8% |
AHL Alpha plc5 | 2.1% | -3.1% | 1.8% | 6.8% |
GLG Ore Hill Fund6 | 0.8% | 6.6% | 4.7% | 2.8% |
GLG Alternative | ||||
GLG Alpha Select Fund7 | -5.6% | -4.4% | 7.3% | 10.0% |
GLG Atlas Macro Fund8 | -2.1% | -7.0% | n/a | n/a |
GLG Emerging Markets Fund9 | -1.2% | -0.6% | 3.8% | 12.1% |
GLG European Distressed Fund10 | 1.7% | 11.2% | n/a | n/a |
GLG European Long Short Fund11 | 1.4% | 4.9% | 5.8% | 6.5% |
GLG European Opportunity Fund12 | 2.1% | 2.0% | 7.5% | 9.7% |
GLG Global Convertible Fund13 | -0.6% | 1.7% | 4.1% | 4.4% |
GLG Global Opportunity Fund14 | -0.5% | 0.6% | 1.7% | 4.7% |
GLG Market Neutral Fund15 | 1.4% | 9.5% | 11.1% | 9.6% |
GLG North American Opportunity Fund16 | 0.3% | 3.3% | 7.7% | 5.0% |
Alternative UCITS III | ||||
GLG Alpha Select UCITS Fund17 | -5.5% | -4.5% | n/a | n/a |
GLG Atlas Macro Alternative UCITS Fund18 | -2.9% | -8.7% | n/a | n/a |
GLG Emerging Markets UCITS Fund19 | -1.2% | -0.5% | n/a | n/a |
GLG European Alpha Alternative UCITS Fund20 | 0.9% | 4.6% | n/a | n/a |
GLG Global Corporate Bond Fund21 | 0.1% | 1.8% | 19.9% | 12.8% |
GLG Global Convertible UCITS Fund22 | -0.4% | 2.1% | 2.6% | 3.8% |
Man AHL Diversity23 | 2.4% | -3.0% | n/a | n/a |
Man AHL Trend24 | 2.8% | -4.4% | n/a | n/a |
Long only UCITS III | ||||
GLG Japan Core Alpha Equity Fund25 | -3.4% | -6.4% | -8.7% | -5.1% |
GLG Performance Fund26 | 0.5% | 4.5% | -6.5% | 0.5% |
GLG UK Select Fund27 | 0.6% | 0.9% | n/a | n/a |
Investment performance cont'd
Total return | Annualised return | |||
2 months to 31 May 2011 | Calendar year to 31 May 2011 | 3 years to31 May 2011 | 5 years to31 May 2011 | |
Indices | ||||
World stocks28 | 1.0% | 4.5% | -1.8% | 1.5% |
World bonds29 | 1.7% | 1.0% | 4.7% | 4.9% |
Corporate bonds30 | 5.0% | 3.8% | 10.5% | 8.1% |
Hedge fund indices | ||||
HFRI Fund Weighted Composite Index31 | 0.3% | 1.9% | 3.0% | 5.0% |
HFRI Fund of Funds Composite Index31 | 0.2% | 1.1% | -1.7% | 1.7% |
Style indices | ||||
Barclay BTOP 50 Index | -0.4% | -2.4% | 1.9% | 4.3% |
HFRI Equity Hedge (Total) Index31 | 0.1% | 2.3% | 1.5% | 3.8% |
HFRI Event-Driven (Total) Index31 | 0.6% | 4.0% | 4.8% | 5.3% |
HFRI Macro (Total) Index31 | 0.1% | -0.4% | 3.8% | 6.2% |
HFRI Relative Value (Total) Index31 | 0.9% | 3.3% | 6.1% | 6.6% |
Source: Man database and Bloomberg. There is no guarantee of trading performance and past or projected performance is not a reliable indicator of future performance. Returns may increase or decrease as a result of currency fluctuations
1) Represented by Man Absolute Return Strategies II USD I
2) Represented by Man Dynamic Selection USD I
3) Represented by Man-IP 220 Ltd from 18 December 1996 to 31 December 2005 and Man-IP 220 Ltd - USD class bonds from 1 January 2006
4) Man AHL Diversified plc is valued weekly, but for comparative purposes the last weekly valuation of the month has been used.
5) AHL Alpha plc is valued weekly, but for comparative purposes the last weekly valuation of the month has been used.
6) Represented by Ore Hill International Fund II Ltd.
7) Represented by GLG Alpha Select Fund - Class C - EUR
8) Represented by GLG Atlas Macro Fund - Class A - USD
9) Represented by GLG Emerging Markets Fund - Class A Restricted to Unrestricted (31/08/2007) - USD
10) Represented by GLG European Distressed Fund - Class A - USD
11) Represented by GLG European Long Short Fund - Class D Restricted to Unrestricted (29/06/2007) - EUR
12) Represented by GLG European Opportunity Fund - Class D Restricted to Unrestricted (31/08/2007) - EUR
13) Represented by GLG Global Convertible Fund - Class A - USD
14) Represented by GLG Global Opportunity Fund - Class Z - USD
15) Represented by GLG Market Neutral Fund - Class Z Restricted to Unrestricted (31/08/2007) - USD
16) Represented by GLG North American Opportunity Fund - Class A Restricted to Unrestricted (29/06/2007) - USD
17) Represented by GLG Alpha Select Alternative IN H EUR
18) Represented by GLG Atlas Macro Alternative IN H GBP
19) Represented by GLG EM Diversified Alternative IL H USD
20) Represented by GLG European Alpha Alternative IN EUR
21) Represented by GLG Global Corporate Bond Fund Professional C Accumulation Shares - GBP
22) Represented by GLG Global Convertible UCITS Fund - Class A - USD
23) Represented by Man AHL Diversity GBP DB. Please note that Man AHL Diversity GBP DB was valued weekly until 2 May 2011. Prior to this date, the last weekly valuation of the month has been used.
24) Represented by Man AHL Trend EUR I. Please note that Man AHL Trend EUR I was valued weekly until 2 May 2011. Prior to this date, the last weekly valuation of the month has been used.
25) Represented by GLG Japan Core Alpha Equity Fund - Class C to Class AAX (28/01/2010) - JPY
26) Represented by GLG Performance Fund Class A - USD
27) Represented by GLG UK Select Fund - Class AX - GBP
28) Represented by MSCI World (USD, NDTR) Hedged Index
29) Represented by Citigroup World Government Bond Index hedged to USD (total return)
30) Represented by Citigroup High Grade Corp Bond TR
31) HFRI index performance over the past 4 months is subject to change.
Enquiries
Miriam McKay
Head of Investor Relations and Financial Communications
+44 20 7144 3809
David Waller
Head of Media Relations
+44 20 7144 2121
Maitland PR
Anthony Silverman
+44 20 7379 5151
About Man
Man is a world-leading alternative investment management business. It has expertise in a wide range of liquid investment styles including managed futures, equity, credit and convertibles, emerging markets, global macro and multi-manager, combined with powerful product structuring, distribution and client service capabilities. Man manages $71.0 billon.
The original business was founded in 1783. Today, Man Group plc is listed on the London Stock Exchange and is a member of the FTSE 100 Index with a market capitalisation of over £4.5 billion.
Man is a member of the Dow Jones Sustainability World Index and the FTSE4Good Index. Man also supports many awards, charities and initiatives around the world, including sponsorship of the Man Booker literary prizes. Further information can be found at www.mangroupplc.com.
Forward looking statements and other important information
This document contains forward-looking statements with respect to the financial condition, results and business of Man Group plc. By their nature, forward looking statements involve risk and uncertainty and there may be subsequent variations to estimates. Man Group plc's actual future results may differ materially from the results expressed or implied in these forward-looking statements.
The content of the websites referred to in this announcement is not incorporated into and does not form part of this announcement.
Nothing in this announcement should be construed as or is intended to be a solicitation for or an offer to provide investment advisory services.
Related Shares:
Man