Guaranteed fund deleveraging shears $2.5bn from Man funds
The deleveraging hitting banks, households and even governments, has come to the world’s largest listed hedge fund investor Man Group, as degearing mainly of its guaranteed products, reduced funds under management by $2.5bn over the last half.
Added to this, redemptions of $9.6bn, investment losses of $300m and FX movements of $500m helped Man’s total funds under management fall from $58.4bn during the first half to $52.7bn.
The group reported first half profit before tax of $121m, including adjusted net management fees before tax $108m, and net performance fees of $13m.
It also forecast it was well placed to make $95m of cost savings, announced in March, and would make an extra $100m of cost savings over the coming 18 months.
The board announced an interim dividend of 9.5 cents per share, bringing the full year distribution to 22 cents.
Peter Clarke (pictured), chief executive, said: “Against a turbulent market and economic background, Man’s funds under management have declined in the period principally as a result of continued net outflows and the deleveraging of our guaranteed products. The result is a marked decline in underlying profitability which, after goodwill impairments, produced a statutory loss.”
Its GLG unit generated over two thirds of total sales of $7.2bn to June.
Clarke also pointed to Man’s acquisition of fund of funds rival FRM, closed on 17 July, “creating the largest independent non-US based fund of hedge funds in an industry where economies of scale are a critical success factor.”