Interim Management Statement

RNS Number : 9259J

Man Group plc

07 July 2011

 



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 to 31 May 2011	5 years to 31 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 to 31 May 2011	5 years to 31 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

[phone]

[e-mail]

David Waller

Head of Media Relations

[phone]

[e-mail]

Maitland PR

Anthony Silverman

[phone]

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.

 

END

 

 

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