Losses at AHL hedge fund saw Man Group assets fall last quarter
Man Group reported a fall in assets of $6.1bn last quarter, bringing total funds at the diversified fund manager to $58.4bn, led by sharp falls in the combined assets of its systematic AHL hedge fund.
Peter Lenardos, director, pan-European financials at RBC Capital Markets, said the “absence of bad news should be taken positively”.
Peter Clarke (pictured), chief executive, called trading conditions for the group in the second half of 2011 “tough” and noted “market volatility and reduced market liquidity impacted trading opportunities. Although some of our funds performed strongly and sales held up well, we experienced a net outflow in the last two quarters, albeit with reduced redemptions in the final three months.”
At the end of September Man ran $64.5bn. But the four versions of Man’s flagship AHL fund lost between 3.8% and 7.7% over the following three months. This plus $800m of net redemptions from AHL overall helped reduce Man’s total funds by 9.5% last quarter.
AHL overall lost 6.8% over all of 2011. Its sharpest losses came in October as stock, bond and FX markets reversed sharply.
By the end of 2011 AHL had to make 12% to reach its previous performance peak – this is normally the point when hedge funds can start charging lucrative incentive fees again.
AHL’s fall last year was slightly more than the 4.5% loss by computer-driven funds across the whole industry, registered by Newedge.
In the final quarter of 2011, AHL’s total funds dropped from $24.4bn to $21bn.
The alternatives products at Man’s discretionary management unit GLG also fell, by $1bn to $15.5bn. Funds in GLG’s long-only strategies remained broadly stable.
Over half of the aggregate funds managed by GLG are either already above their past peak levels, or within 5% of them.
Man also used its trading update today to note that Noam Gottesman, a founding partner of GLG, had stopped being co-CEO of GLG and took the role of non-executive chairman of GLG’s business and interests in the US.