Q1 2017 Trading Statement

RNS Number : 7923C

Man Group plc

20 April 2017

 

Press Release

20 April 2017

TRADING STATEMENT for the quarter ended 31 March 2017

Key points

·     Funds under management (FUM) of $88.7 billion at 31 March 2017 (31 December 2016: $80.9 billion)

·     Net inflows in the quarter of $3.0 billion, driven by strong inflows into discretionary long only and fund of fund alternatives

·     Positive investment movement of $2.2 billion in the quarter

·     Positive FX movements of $0.8 billion in the quarter, primarily driven by the weakening of the US Dollar against the Japanese Yen, Australian Dollar, and Euro

·     The acquisition of Aalto was completed on 1 January 2017, which added $1.8 billion of FUM

Luke Ellis, Chief Executive Officer of Man Group, said:

"The first quarter of 2017 has been a strong period for Man Group, with funds under management increasing by 10% to $88.7 billion and growth in each of our investment engines. We came into the year with a good pipeline of interest from clients, and that has resulted in net inflows of $3.0 billion in the first three months. Investment performance increased FUM by $2.2 billion for the quarter and the completion of the Aalto acquisition added a further $1.8 billion.

Looking forward, the global environment has the potential to create alpha opportunities and we see continuing near-term interest from clients. However, it is important to recognise that this is only one quarter and, as we have said before, flows are likely to vary on a quarterly basis given the institutional nature of our business."

 

FIRST QUARTER FUM COMMENTARY

       FUM movements by product type

$bn	FUM at 31 Dec 2016	Sales	Redemptions	Net inflows / (outflows)	Investment movement	FX	Other	FUM at 31 March 2017
Alternatives	46.3	4.1	(2.2)	1.9	0.4	0.5	1.8	50.9
Quant (AHL / Numeric)	19.6	1.3	(0.5)	0.8	0.1	0.2	(0.2)	20.5
Discretionary (GLG)	13.9	0.8	(1.0)	(0.2)	0.2	0.1	-	14.0
Fund of funds (FRM)	12.8	1.9	(0.7)	1.2	0.1	0.2	0.2	14.5
Global Private Markets	-	0.1	-	0.1	-	-	1.8	1.9
Long only	34.2	3.9	(2.8)	1.1	1.9	0.3	-	37.5
Quant (Numeric)	21.4	1.2	(1.5)	(0.3)	1.6	-	-	22.7
Discretionary (GLG)	12.8	2.7	(1.3)	1.4	0.3	0.3	-	14.8
Guaranteed	0.4	-	-	-	(0.1)	-	-	0.3
Total	80.9	8.0	(5.0)	3.0	2.2	0.8	1.8	88.7

ALTERNATIVES

Quant

Quant alternatives (AHL/Numeric) FUM increased by 5% during the quarter driven by net inflows, positive investment performance and FX movements. The net inflows of $0.8 billion included $0.3 billion into Numeric Market Neutral, $0.2 billion into Institutional Solutions, and $0.2 billion into Alpha.  Investment movement was marginally positive as the performance for Evolution (up 2.8%) and the Numeric alternative strategies was partially offset by negative performance for Diversified (down -1.8%), Alpha (down -0.9%) and Dimension (down -0.2%)¹. Positive FX movements of $0.2 billion were a result of the US Dollar weakening against the Japanese Yen, Australian Dollar and Euro. As at 31 March 2017, 38% of AHL performance fee eligible open ended FUM was at high watermark and 26% was within 5% of high watermark. The weighted average distance from peak for all AHL performance fee eligible FUM was -6.8%.

Discretionary

Discretionary alternatives (GLG) FUM increased slightly during the quarter, with net outflows being offset by positive investment movement. The net outflows of $0.2 billion were mainly from the GLG Multi Strategy and Equity Long Short strategies. The positive investment movement of $0.2 billion in the quarter was due to positive performance across GLG's range of alternative strategies. As at 31 March 2017, 43% of GLG performance fee eligible FUM was at high watermark and 44% was within 5% of high watermark, of which around 60% crystallises on a semi-annual basis.

 ¹Past performance is not an indication of future performance. Returns shown are net of fees.

Fund of funds

Fund of fund alternatives (FRM) FUM increased by $1.7 billion during the quarter as a result of net inflows, positive investment movement, FX, and other movements. Net flows mainly related to $1.4 billion into a segregated portfolio for a single client, partially offset by net outflows from traditional fund of fund strategies. Previously awarded infrastructure managed account mandates of $1.9 billion are yet to be funded, which are expected to come in during 2017. Investment movement was marginally positive for the quarter. Positive FX movements increased FUM by $0.2 billion due to the weakening of the US Dollar in the period against the Japanese Yen and Australian Dollar. The positive other movements related to investment exposure adjustments. 

Global Private Markets

The acquisition of Aalto completed on 1 January 2017, which added $1.8 billion to funds under management. Net inflows of $0.1 billion for the quarter were broadly split between the real estate debt and direct real estate strategies.

LONG ONLY

Quant

Quant long only (Numeric) FUM increased by $1.3 billion during the quarter as a result of positive investment movement, partially offset by net outflows. The net outflows were mainly from the US Large Cap and Global Core strategies, partially offset by net inflows into the Emerging Market strategies. The asset weighted outperformance relative to a blend of applicable benchmarks (net of fees) across Numeric's product range was approximately 0.5%² for the quarter.

Discretionary

Discretionary long only (GLG) FUM increased by $2.0 billion due to net inflows, positive investment movement and positive FX movement in the period. Net inflows of $1.4 billion were primarily in relation to the Emerging Market Debt strategies. The positive investment movement of $0.3 billion was across the range of GLG long only strategies. Positive FX movements increased FUM by $0.3 billion, primarily due to the weakening of the US Dollar against the Japanese Yen.

GUARANTEED PRODUCTS

Guaranteed product FUM decreased to $0.3 billion during the quarter as a result of negative investment movement. There were no guaranteed product launches during the period, and limited redemptions and maturities.

² Numeric's asset weighted alpha is calculated using the asset weighted average of the performance relative to the benchmark for all strategy composites available net of the highest rate of management fees charged and, as applicable, performance fees that can be charged.

FUM by manager

$bn	31 Mar 2016	30 Jun 2016	30 Sep 2016	31 Dec 2016	31 Mar 2017
AHL	19.2	18.8	19.0	18.3	18.8
AHL Dimension	4.6	4.5	4.9	5.2	5.2
AHL Alpha	4.5	4.0	4.0	4.1	4.2
AHL Diversified (inc. Guaranteed)	4.6	4.0	3.7	3.4	3.3
AHL Evolution	2.9	2.9	2.8	2.8	3.0
Other specialist styles	1.7	1.8	1.9	1.8	1.9
Institutional solutions	-	0.8	1.0	1.0	1.2
Europe and Asia Plus	0.9	0.8	0.7	-	-
Numeric	19.4	19.7	22.3	23.1	24.7
Global	10.6	10.2	11.0	12.2	13.0
Emerging markets	2.6	2.8	4.3	4.2	5.3
US	4.9	5.2	5.4	5.0	4.5
Alternatives	1.3	1.5	1.6	1.7	1.9
GLG	27.9	26.0	26.6	26.7	28.8
Alternatives	15.4	14.9	14.6	13.9	14.0
Europe equity	4.0	3.8	3.6	3.1	3.0
North America equity	1.1	1.1	1.0	1.2	1.3
Other equity	0.6	0.6	0.6	0.5	0.6
Convertibles	3.6	3.5	3.5	3.3	3.5
Market Neutral	0.5	0.5	0.5	0.5	0.5
CLOs and debt	5.0	4.6	4.5	4.6	4.4
Multi-strategy	0.6	0.8	0.9	0.7	0.7
Long only	12.5	11.1	12.0	12.8	14.8
Japan equity	7.0	5.9	6.5	7.1	7.3
Europe equity*	0.9	0.8	0.9	0.9	1.3
UK equity	0.7	0.8	0.8	0.7	0.7
Other equity*	2.3	2.0	2.0	1.9	1.8
Fixed income	1.6	1.6	1.8	2.2	3.7
FRM	12.1	11.9	12.8	12.8	14.5
Infrastructure and direct access	3.9	4.1	5.0	5.3	5.5
Segregated	2.8	3.0	2.9	3.0	4.5
Diversified FoHF	4.2	3.9	3.8	3.6	3.4
Thematic FoHF	0.9	0.8	1.0	0.9	1.0
Guaranteed	0.3	0.1	0.1	-	0.1
Man Global Private Markets	-	-	-	-	1.9
Total	78.6	76.4	80.7	80.9	88.7

*Balanced and Stock Market Managed were reclassified from Europe equity to Other equity for presentation purposes at 30 June 2016

Investment Performance

		Total Return (net of fees)		Annualised Return (net of fees)
		3 months to 31 Mar 2017	12 months to 31 Mar 2017	3 years to     31 Mar 2017	5 years to     31 Mar 2017	Since inception to 31 Mar 2017
AHL
AHL Dimension	1	-0.2%	-5.7%	6.8%	5.3%	5.3%
AHL Alpha	2	-0.9%	-7.5%	6.6%	3.6%	11.5%
AHL Evolution	3	2.8%	1.4%	9.9%	13.4%	13.9%
AHL Diversified	4	-1.8%	-13.9%	6.5%	2.7%	11.8%
GLG
European Equity
GLG European Long Short	5	0.1%*	1.1%*	0.3%*	1.1%*	7.6%*
Man GLG European Mid-Cap Equity Alternative	6	1.6%	6.2%	n/a	n/a	6.7%
Credit
Man GLG Select Opportunities	7	5.3%*	20.5%*	n/a	n/a	5.9%*
Man GLG Global Convertible UCITS	8	2.4%	8.3%	2.4%	4.6%	5.8%
GLG Market Neutral	9	5.2%*	23.3%*	2.8%*	5.7%*	12.9%*
Man GLG European Distressed	10	5.0%*	7.8%*	0.0%*	4.4%*	11.6%*
Multi-strategy
Man Multi-Strategy	11	3.4%*	4.5%*	2.6%*	2.3%*	4.3%*
Long Only
Man GLG Japan Core Alpha Equity	12	-0.6%	25.6%	10.7%	15.2%	4.1%
Man GLG Undervalued Assets	13	8.4%	19.4%	7.5%	n/a	9.7%
Man GLG Continental European Growth	14	5.0%	20.2%	18.6%	19.5%	9.4%
Man GLG Global EM Debt Total Return	15	3.0%	n/a	n/a	n/a	n/a
FRM
FRM Diversified II	16	2.5%	2.0%	0.6%	1.9%	4.2%
Indices
HFRX Global Hedge Fund Index	17	1.7%	6.2%	-0.4%	1.3%	n/a
HFRI Fund of Funds Conservative Index	17	1.4%	5.5%	1.8%	3.2%	n/a
Barclay BTOP 50 Index	18	-1.8%	-8.2%	1.9%	0.8%	n/a
HFRI EH: Equity Market Neutral Index	17	1.4%	3.2%	3.3%	3.7%	n/a
NUMERIC
Alternative
Numeric World Market Neutral		0.3%	9.1%	3.8%	5.7%	1.5%
Long only
Numeric Global Core		7.0%	17.1%	7.5%	n/a	12.3%
MSCI World®#		6.4%	14.8%	5.5%	n/a	8.8%
Relative Return		0.6%	2.3%	2.0%	n/a	3.5%
Numeric Large Cap Core		4.6%	15.1%	9.5%	14.3%	8.9%
S&P 500®#		6.1%	17.2%	10.4%	13.3%	7.9%
Relative Return		-1.5%	-2.1%	-0.9%	1.0%	1.0%
Numeric Emerging Markets Core		14.4%	29.3%	6.7%	n/a	5.2%
MSCI Emerging Markets®#		11.5%	17.2%	1.2%	n/a	1.0%
Relative Return		2.9%	12.1%	5.5%	n/a	4.2%

 

1)	Represented by AHL Strategies PCC Limited: Class B AHL Dimension USD Shares from 3 July 2006 to 31 May 2014, and by AHL Dimension (Cayman) Ltd - F USD Shares Class from 1 June 2014 until 28 February 2015 when AHL Dimension (Cayman) Ltd - A USD Shares Class is used. Representative fees of 1.5% Management Fee and 20% Performance Fee have been applied.
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 Evolution Limited adjusted for the fee structure (2% p.a. management fee and 20% performance fee) from September 2005 to 31 October 2006; and by AHL Strategies PCC: Class G AHL Evolution USD from 1 November 2006 to 30 November 2011; and by the performance track record of AHL Investment Strategies SPC: Class E AHL Evolution USD Notes from 1 December 2011 to 30 November 2012. From 1 December 2012, the track record of AHL (Cayman) SPC: Class A1 Evolution USD Shares has been shown. All returns shown are net of fees.
4)	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.
5)	Represented by GLG European Long Short Fund - Class D Restricted - EUR until 29 June 2007. From 1 July 2007 the performance of GLG European Long Short Fund - Class D Unrestricted is displayed.
6)	Represented by Man GLG European Mid-Cap Equity Alternative IN H USD.
7)	Represented by Man GLG Select Opportunities Class FN USD Unrestricted.
8)	Represented by Man GLG Global Convertible UCITS Fund - Class IL T USD until 7 June 2009. From 8 June 2009 the performance of Man GLG Global Convertible UCITS Fund - Class IM USD is displayed.
9)	Represented by GLG Market Neutral Fund - Class Z Restricted - USD until 31 August 2007. From the 1 September 2007 GLG Market Neutral Fund - Class Z Unrestricted - USD is displayed.
10)	Represented by Man GLG European Distressed Fund - Class A - USD.
11)	Represented by the gross return of Man GLG Multi-Strategy Fund - Class A - USD Shares until 31 December 2012. From 1 January 2013 the performance of Man Multi-Strategy Fund - Class G - USD Shares is displayed.
12)	Represented by Man GLG Japan CoreAlpha Fund - Class C converted to JPY until 28 January 2010. From 1 February 2010 Man GLG Japan CoreAlpha Equity Fund - Class I JPY is displayed.
13)	Represented by Man GLG Undervalued Assets Fund - C Accumulation Shares.
14)	Represented by Man GLG Continental European Growth Fund Class C Accumulation Shares.
15)	Represented by Man GLG Global Emerging Markets Debt Total Return Class I USD.
16)	Represented by FRM Diversified II Fund SPC - Class A USD ('the fund') but prior to Jan 2004, FRM has created the FRM Diversified II pro forma using the following methodology: i) for the period Jan 1998 to Dec 2003, by using the returns of Absolute Alpha Fund PCC Limited - Diversified Series Share Cell ('AA Diversified - USD') adjusted for fees and/or currency, where applicable. For the period Jan 2004 to Feb 2004, the returns of the fund's master portfolio have been used, adjusted for fees and/or currency, where applicable. Post Feb 2004, the fund's actual performance has been used, which may differ from the calculated performance of the track record. There have been occasions where the 12-months' performance to date of FRM Diversified II has differed materially from that of AA Diversified. Strategy and holdings data relates to the composition of the master portfolio.
17)	HFRI and HFRX index performance over the past 4 months is subject to change.
18)	The historic Barclay BTOP 50 Index data is subject to change.
	*Estimated
	#The reference index listed by Numeric is intended to best represent the strategy's universe. Investors may choose to compare returns for their accounts to different reference indices, resulting in differences in relative return information. Comparison to an index is for informational purposes only, as the holdings of an account managed by Numeric will differ from the securities which comprise the index and may have greater volatility than the holdings of an index.
	Past or projected performance is no indication of future results. Financial indices are used for illustrative purposes only and are provided for the purpose of making a comparison to general market data as a point of reference and should not be construed as a true comparison to the strategy. The information herein is being provided solely in connection with this press release and is not intended to be, nor should it be construed or used as, investment, tax or legal advice, any recommendation or opinion regarding the appropriateness or suitability of any investment or strategy, or an offer to sell, or a solicitation of an offer to buy, an interest in any security, including an interest in any fund or pool described herein.

 

Enquiries

Andrea Waters

Head of Investor Relations

[phone]

[e-mail]

Rosanna Konarzewski

Global Head of Communications & Marketing

[phone]

[e-mail]

Finsbury

Michael Turner

[phone]

[e-mail]

About Man Group

Man Group is an active investment management firm focused on delivering performance and client solutions through its five investment management businesses: Man AHL; Man Numeric; Man GLG; Man FRM and Man Global Private Markets. Man Group's investment management businesses provide long only, alternative and private markets products on a single and multi-manager basis, leveraging the firm's robust infrastructure to provide a diverse range of strategies across investment approaches, styles and asset classes.

The original business was founded in 1783. Today, Man Group plc is listed on the London Stock Exchange under the ticker EMG.L and is a constituent of the FTSE 250 Index. As at 31 March 2017, Man Group's funds under management were $88.7 billion.

Man Group 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.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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