Interim Management Statement

RNS Number : 6629G

Man Group plc

09 May 2014

 



Press Release

09 May 2014

INTERIM MANAGEMENT STATEMENT for the quarter ended 31 March 2014

Key points

·     Funds under management (FUM) as at 31 March 2014 of $55.0 billion (31 December 2013: $54.1 billion)

·     Net inflows in the quarter of $2.0 billion, comprising sales of $6.5 billion and redemptions of $4.5 billion with net inflows into GLG alternatives and long only funds being partially offset by net outflows from FRM funds and guaranteed products

·     Overall investment movement of negative $0.7 billion in the quarter:

o  AHL Diversified programme was down 2.2% in the quarter which was the main driver of the negative investment movement of $0.3 billion in Quant alternatives strategies

o  Performance in GLG alternative strategies was flat overall with positive performance in credit strategies being offset by negative performance in equity and macro strategies

o  Performance at FRM was positive overall which increased FUM by $0.1 billion in the quarter. FRM Diversified strategies were up 0.5% in the quarter

o  The majority of GLG Long only strategies had negative investment performance in the quarter. Japan CoreAlpha strategy was down 5.9% which contributed to the majority of the negative investment movement of $0.5 billion 

·     FX movements of positive $0.3 billion in the quarter, driven by the weakening of the US dollar against the the Japanese Yen

·     Other negative movements of $0.7 billion driven by guaranteed product degears of $0.3 billion and product maturities and other movements of $0.4 billion

·     Completed $68 million of the $115 million share repurchase programme announced on 6 March 2014 equating to 40 million shares

Manny Roman, Chief Executive Officer of Man, said:

"The market environment in the first quarter has been particularly challenging and March was a very difficult month for the industry. In this context, performance across the firm was reasonable on a relative basis.

Whilst we are pleased to have recorded a solid quarter of net inflows, we remain cautious in our outlook for asset flows for the rest of the year given recent mixed absolute investment performance."

Conference call

A conference call for investors and analysts will be held at 08:00 UK time this morning. 

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FIRST QUARTER FUM COMMENTARY

Alternatives

Funds under management in alternative strategies increased by $0.5 billion during the period.    

The 4% reduction in quant alternatives (AHL/MSS) FUM was driven by net outflows of $0.2 billion and negative investment movement of $0.3 billion. The trend of net outflows from Diversified and Alpha strategies being partially offset by net inflows into Dimension and Evolution strategies continued. Diversified and Alpha strategies were down 2.2% and 1.1% repectively in the three months to 31 March 2014 as gains from long bond positions were not sufficient to offset losses in equities and metals. Evolution was up 1.9% in the quarter and Dimension was up 0.5%. As at 31 March 2014, AHL open ended funds were approximately 13% below high watermark on a weighted average basis.

Discretionary alternatives FUM increased by 10% to $18.0 billion during the period, driven by net inflows of $2.1 billion.  Equity strategies had strong net inflows, with $1.5bn net infows into European long short strategies, $800 million of which came from one institutional client, and $300 million into the Global long short strategy which launched at the end of 2013.  The remainder of the net inflows were into fixed income and convertible strategies.  Pemba and Ore Hill maturities totalled $0.3 billion in the period.  Performance during the period was mixed with negative performance in equity long short and macro strategies being offset by positive performance in credit strategies.  As at 30 April 2014 30% of GLG performance fee eligible FUM was at high watermark and 47% was within 5% of high watermark.

The 7% reduction in alternative fund of funds was mainly driven by net outflows of $1.0 billion.  Inflows of $0.6 billion included $200 million of inflows into infrastructure mandates and $300 million of inflows into FRM Diversified strategies. Outflows of $1.6 billion were driven by the loss of two advisory mandates totalling $0.9 billlion. 36% of funds in this category are denominated in Japanese Yen and 23% of funds are denominated in Euro.  The Yen strengthened against the dollar during the period resulting in an increase in FUM of $0.2 billion.  FRM Diversified strategies were up 0.5% during the period which was the main driver of the positive investment performance of $0.1 billion.

Long only

Long only FUM increased by $1.0 billion to $16.3 billion as at 31 March 2014. 

Net inflows into discretionary long only strategies totalled $1.1 billion, $0.5 billion of which was into Japan CoreAlpha strategies and $0.6 billion into the strategic bond strategy driven by one client subscription of over $500 million. The majority of the negative investment movement of $0.5 billion in discretionary long only products was driven by the GLG Japan CoreAlpha strategy which was down 5.9% compared to the TOPIX which was down 7.6% in the quarter.    

Quant long only strategies had net inflows of $0.2 billion all of which were into our Equity index plus strategies.

Guaranteed products

Guaranteed product FUM reduced by 26% to $1.7 billion, mainly due to net outflows and degearing. In line with previous periods there were no sales in the quarter and redemptions totalled $0.2 billion.

Guaranteed product degears totalled $0.3 billion during the period mainly due to negative AHL performance in the rebalance period.  The total degear for 1 April and 1 May was $0.2 billion.

FUNDS UNDER MANAGEMENT ANALYSIS

FUM movements by product type 

$bn	FUM at 31 December 2013	Sales	Redemptions	Net inflows / (Outflows)	Investment movement	FX	Other	FUM at 31 March 2014
Alternative	36.5	4.4	(3.5)	0.9	(0.2)	0.2	(0.4)	37.0
Quant (AHL / MSS)	8.9	0.7	(0.9)	(0.2)	(0.3)	0.1	0.0	8.5
Discretionary (GLG)	16.3	3.1	(1.0)	2.1	0.0	(0.1)	(0.3)	18.0
Fund of funds (FRM)	11.3	0.6	(1.6)	(1.0)	0.1	0.2	(0.1)	10.5
Long Only	15.3	2.1	(0.8)	1.3	(0.4)	0.1	0.0	16.3
Quant (AHL / MSS)	1.5	0.2	(0.0)	0.2	0.1	0.0	0.0	1.8
Discretionary (GLG)	13.8	1.9	(0.8)	1.1	(0.5)	0.1	0.0	14.5
Guaranteed	2.3	0.0	(0.2)	(0.2)	(0.1)	0.0	(0.3)	1.7
Total	54.1	6.5	(4.5)	2.0	(0.7)	0.3	(0.7)	55.0

FUM by manager

$bn	31 March 2014			31 December 2013				30 September 2013
Quant styles	11.3			11.9				12.5
-     AHL	9.0			9.9				10.2
-     MSS	2.3			2.0				2.3
GLG Alternatives	18.2			16.4				15.5
- Equity
-     Europe	6.4			4.8				4.4
-     North America	2.5			3.0				2.0
-     UK	0.3			0.3				0.5
-     Other equity alternatives	1.0			0.1				0.0
- Credit and Convertibles
-     Convertibles	3.9			3.5				3.2
-     Market Neutral	1.1			1.0				0.8
-     US credit (Ore Hill)	0.7			0.9				1.3
-     European CLO (Pemba)	1.6			1.9				2.0
- Macro
-      Emerging markets	0.5			0.5				0.7
-      Macro	0.2			0.4				0.6
GLG Long only	14.5			13.8				12.2
-     Japan	9.7			9.7				8.4
-     Other	4.8			4.1				3.8
FRM	11.0			12.0				12.3
Total	55.0			54.1				52.5
Investment performance
		Total Return					Annualised Return
		3 months to 31 Mar 2014			12 months to 31 Mar 2014		3 years to 31 Mar 2014			5 years to 31 Mar 2014
AHL/MAN SYSTEMATIC STRATEGIES
AHL Diversified1		-2.2%			-8.7%		-2.4%			-1.8%
AHL Alpha2		-1.1%			-5.5%		-0.4%			0.6%
AHL Evolution3		1.9%			15.9%		n/a			n/a
AHL Dimension4		0.5%			-2.1%		1.4%			2.1%
MSS TailProtect5		-2.9%			-12.8%		-3.6%			n/a
MSS Europe Plus6		1.8%			16.6%		9.9%			n/a
GLG ALTERNATIVES
Equity
Europe
GLG European Long Short Fund7		-0.4%			4.1%		5.2%			7.4%
GLG European Equity Alternative UCITS Fund8		-0.6%			4.0%		n/a			n/a
GLG European Alpha Alternative UCITS Fund9		1.9%			6.1%		3.3%			n/a
North America
GLG North American Opportunity Fund10		-1.5%			-0.9%		-1.8%			6.2%
GLG North American Equity Alternative UCITS Fund11		-1.1%			-2.8%		-4.1%			n/a
UK
GLG Alpha Select Fund12		2.5%			12.1%		1.0%			5.7%
GLG Alpha Select UCITS Fund13		2.5%			11.6%		0.5%			n/a
Other equity alternatives
GLG Global Opportunity Fund14		-0.3%			3.4%		-1.2%			4.3%
Convertibles
GLG Global Convertible Fund15		1.1%			6.1%		3.0%			10.3%
GLG Global Convertible UCITS Fund16		2.1%			9.5%		4.4%			11.7%
Market neutral
GLG Market Neutral Fund17		2.2%			9.2%		7.6%			26.6%
GLG European Distressed Fund18		3.2%			11.2%		7.1%			n/a
Emerging markets
GLG Global Emerging Markets Macro Fund19		-0.5%			n/a		n/a			n/a
GLG Global Emerging Markets Macro UCITS Fund20		-0.9%			n/a		n/a			n/a
Macro and Special Situations
GLG Atlas Macro Fund21		-8.1%			-15.7%		-3.8%			2.4%
GLG Atlas Macro Alternative UCITS Fund22		-8.2%			-13.2%		-3.7%			n/a
Multi-strategy
GLG Multi-Strategy Fund23		-0.5%			1.6%		1.1%			7.4%
GLG LONG ONLY
GLG Japan Core Alpha Equity Fund24		-5.9%			24.9%		14.0%			13.2%
GLG Global Equity UCITS Fund25		-1.6%			17.2%		8.0%			15.5%

Investment performance (cont'd)

	Total Return			Annualised Return
	3 months to 31 Mar 2014	12 months to 31 Mar 2014		3 years to 31 Mar 2014		5 years to 31 Mar 2014
FRM
AA Diversified26	0.2%	0.9%		0.7%		3.4%
FRM Diversified II27	0.5%	3.4%		1.9%		5.1%
FRM Dynamic Selection28	0.7%	2.0%		0.0%		2.3%
Indices
World Stocks29	1.0%	18.5%		11.2%		17.1%
World Bonds30	2.1%	1.4%		4.3%		3.4%
Corporate Bonds31	5.7%	0.7%		9.1%		11.1%
Hedge fund indices
HFRI Fund of Funds Composite Index32	0.4%	5.8%		2.3%		4.9%
HFRI Fund Weighted Composite Index32	1.1%	6.4%		3.0%		7.9%
HFRX Global Hedge Fund Index	1.1%	4.6%		0.5%		3.8%
Style indices
Barclay BTOP 50 Index33	-1.4%	-2.5%		-1.6%		-0.8%
HFRI Equity Hedge (Total) Index32	1.5%	10.6%		3.8%		9.5%
HFRI EH: Equity Market Neutral Index32	1.3%	5.7%		2.3%		2.7%
HFRI Macro (Total) Index32	-0.5%	-2.2%		-1.6%		1.5%
HFRI Relative Value (Total) Index32	2.2%	6.2%		5.8%		10.4%
Source: Man database, Bloomberg, MSCI and Source. 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 AHL Diversified plc from 26 March 1996 to 29 October 2012, and by Man AHL Diversified (Guernsey) USD Shares - Class A from 30 October 2012 to date. The representative product was changed at the end of October 2012 due to legal and/or regulatory restrictions on Man AHL Diversified plc preventing the product from accessing the Programme's revised target allocations. Both funds are valued weekly; however, for comparative purposes, statistics have been calculated using the best quality price that is available at each calendar month end, using estimates where a final price is unavailable. Where a price, either estimate or final is unavailable on a calendar month end, the price on the closest date prior to the calendar month end has been used.
2) Represented by AHL Alpha plc from 17 October 1995 to 30 September 2012, and by AHL Strategies PCC Limited: Class Y AHL Alpha USD Shares from 1 October 2012 to 30 September 2013. The representative product was changed at the end of September 2012 due to the provisioning of fund liquidation costs in October 2012 for AHL Alpha plc, which resulted in tracking error compared with other Alpha Programme funds. Both funds are valued weekly; however, for comparative purposes, statistics have been calculated using the best quality price that is available at each calendar month end, using estimates where a final price is unavailable. Where a price, either estimate or final is unavailable on a calendar month end, the price on the closest date prior to the calendar month end has been used. Both of the track records have been adjusted to reflect the fee structure of AHL Alpha (Cayman) Limited - USD Shares. From 30 September 2013, the actual performance of AHL Alpha (Cayman) Limited - USD Shares is displayed.
3) Represented by AHL (Cayman) SPC - Class A1 Evolution USD Shares.
4) Represented by AHL Strategies PCC Limited: Class B AHL Dimension USD Shares.
5) Represented by TailProtect Limited Class B.
6) Represented by the official performance of Man GLG Europe Plus Source ETF net of a 0.75% p.a. management fee and no performance fee. Provided by Source.
7) Represented by GLG European Long Short Fund - Class D Unrestricted - EUR.
8) Represented by GLG European Equity Alternative IN EUR.
9) Represented by GLG European Alpha Alternative IN EUR.
10) Represented by GLG North American Opportunity Fund - Class A Unrestricted - USD.
11) Represented by GLG North American Equity Alternative IN USD.
12) Represented by GLG Alpha Select Fund - Class C - EUR.
13) Represented by GLG Alpha Select Alternative IN H EUR.
14) Represented by GLG Global Opportunity Fund - Class Z - USD.
15) Represented by GLG Global Convertible Fund - Class A - USD.
16) Represented by GLG Global Convertible UCITS Fund - Class IL T USD to Class IM USD (08/06/2009).
17) Represented by GLG Market Neutral Fund - Class Z Unrestricted - USD.
18) Represented by GLG European Distressed Fund - Class A - USD.
19) Represented by GLG Global Emerging Markets Macro Fund - Class A Unrestricted - USD. This fund launched 28 February 2014.
20) Represented by GLG Global Emerging Markets Macro Alternative IN USD. This fund launched 12 March 2014.
21) Represented by GLG Atlas Macro Fund - Class A - USD.
22) Represented by GLG Atlas Macro Alternative IN USD.
23) Represented by the gross return of Man GLG Multi-Strategy Fund - Class A - USD Shares until 31 December 2012. From 1 January 2013 the actual gross performance of Man GLG Multi-Strategy Fund - Class G - USD Shares is displayed. 24) Represented by GLG Japan CoreAlpha Equity Fund - Class C to Class I JPY (28/01/2010).
25) Represented by GLG Global Equity Fund - Class I T USD to Class I USD (13/05/2011).
26) Represented by Absolute Alpha Fund PCC Ltd Diversified - USD.
27) Represented by FRM Diversified II Fund SPC - Class A USD.
28) Represented by FRM Dynamic Selection USD I.
29) Represented by MSCI World Net Total Return Index hedged to USD.
30) Represented by Citigroup World Government Bond Index hedged to USD (total return).
31) Represented by Citigroup High Grade Corp Bond TR.
32) HFRI index performance over the past 4 months is subject to change.
33) The historic BarclayHedge data is subject to change.

Enquiries

Fiona Smart

Head of Investor Relations

[phone]

[e-mail]

Rosanna Konarzewski

Head of Communications

[phone]

[e-mail]

RLM Finsbury

James Bradley

Ryan O'Keeffe

[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. As at 31 March 2014, Man managed $55.0 billion.

The original business was founded in 1783. Today, Man is listed on the London Stock Exchange and is a member of the FTSE 250 Index with a market capitalisation of around £1.8 billion.

Man is a signatory to the United Nations Principles for Responsible Investment (PRI). Man also supports many awards, charities and initiatives around the world, including sponsoring the Man Booker literary prizes. Further information can be found at www.man.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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