Man Regulatory News (EMG)

1 March 2012

RESULTS FOR THE NINE MONTHS TO 31 DECEMBER 2011

Financial summary

Statutory profit before tax from continuing operations of $193 million (12 months ended 31 March 2011: $324 million), in line with estimates reported in 18 January trading statement

Key points - operating

·; Funds under management (FUM) at end February estimated at $59.5 billion(31 December 2011: $58.4 billion), reflecting positive investment performance partially offset bynet outflows and guaranteed product de-gears

·; At 27 February 2012, AHL was 10.9% below high water mark on a weighted average basis

·; Man AHL Diversified plc is up 2.5% in the year to 27 February 2012

·; At 24 February 2012, two thirds of GLG funds were above or within 5% of performance fee highs

·; Calendar year to 24 February performance for key GLG UCITS strategies: European Equity Alternative +6.0%, North American Equity Alternative +4.0%, Alpha Select +5.2%,Global Convertibles +8.4%, Emerging Markets +6.9%, Atlas Macro -0.4%,Japan Core Alpha +19.3%, Global Equity +11.3%.

Dividend and capital

·; Revised dividend policy

o Management fees: 100% of adjusted management fee earnings per share to be paid out in each financial year by way of ordinary dividend

o Performance fees: net performance fee earnings will be added to available capital surpluses and distributed to shareholders over time by way of higher dividend payments and/or share repurchases

·; The Board intends to apply this policy in 2012 to pay a total dividend for the year of 22 cents per share

·; The Board confirms that it will recommend a final dividend of 7.0 cents per share for the nine months to 31 December 2011, giving a total dividend for the period of 16.5 cents per share

·; After a capital buffer, Man currently has surplus regulatory capital of over $550 million.

Peter Clarke, Chief Executive of Man, said: "Our final results for the nine months to 31 December 2011 are in line with the January trading statement. More recently, we have seen a positive start to the year in the first two months of 2012. Assets under management have increased to around $59.5 billion at the end of February, principally as a result of performance, with strong returns at GLG and a smaller positive contribution from AHL.

"Investor sentiment has improved compared to the last quarter of 2011 and lower redemptions have driven a significant reduction in the rate of net outflows. But sentiment remains fragile and it is likely to take a longer period of stability in markets and continued performance before this translates into increased sales and net inflows.

"We have taken action to reduce costs while continuing to focus on meeting the needs of our investors, as we manage the growing demand for open-ended products as a proportion of total funds under management. Our financial strength, broad product range and comprehensive investor access mean that shareholders will benefit from any sustained momentum in market sentiment."

Dividend

The Board confirms that it will recommend a final dividend of 7.0 cents per share for the nine months to 31 December 2011, giving a total dividend for the period of 16.5 cents per share. This dividend will be paid at the rate of 4.38 pence per share.

Man has a long history of returning capital to shareholders, by way of both dividends and share repurchases. Distributions in the future will continue to reflect this track record and will be assessed against the firm's current and future earnings, its financial position and the Board's view of the long-term prospects for the business.

In the future, the Group's policy will be to pay out at least 100% of adjusted management fee earnings per share in each financial year by way of ordinary dividend. In addition, the Group expects to generate significant surplus capital over time, primarily from net performance fee earnings. Available surpluses, after taking into account our required capital, potential strategic opportunities and a prudent buffer, will be distributed to shareholders over time, by way of higher dividend payments and/or share repurchases. Whilst the Board continues to consider dividends as the primary method of returning capital to shareholders, it will continue to execute share repurchases when advantageous.

Given Man's financial strength and the Board's confidence in the long-term prospects for the business, the Board intends to apply this policy in 2012 to pay a total dividend for the year of 22 cents per share, of which 9.5 cents per share will be paid as an interim dividend on 4 September 2012. After a capital buffer, Man currently has surplus regulatory capital of over $550 million.

Going forward Man will revert to half-yearly dividend announcements retrospectively at the time of interim or final results for the period in question, rather than in advance as for 2012.

Video interviews and audio webcast

Interviews with Peter Clarke (results and strategy), Kevin Hayes (financials) Emmanuel Roman (investment performance) and Luke Ellis (markets) in video, audio and text are available on www.man.com and www.cantos.com.

There will be a presentation by the management team at 9am (UK time) and there will be a live audio webcast available on www.man.com and www.cantos.com which will also be available on demand from later in the day. The dial-in and replay telephone numbers are as follows:

LiveUK Toll Number: 020 3140 0722UK Toll-Free Number: 0800 368 1916US Toll Number: +1 718 705 7514US Toll-Free Number: +1 855 716 1594

ReplayUK Toll: 020 3140 0698UK Toll-Free Number: 0800 368 1890US Toll-Free Number: +1 877 846 3918Playback Pin Code: 382963#

Enquiries

Miriam McKay

Head of Investor Relations and Financial Communications

+44 20 7144 3809

miriam.mckay@man.com

David Waller

Head of Media Relations

+44 20 7144 2121

david.waller@man.com

Maitland PR

George Trefgarne / Peter Ogden

+44 20 7379 5151

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 December 2011, Man managed $58.4 billon.

The original business was founded in 1783. Today, Man is listed on the London Stock Exchange and is a member of the FTSE 100 Index with a market capitalisation of around £2.4 billion.

Man is a signatory to the United Nations Principles for Responsible Investment (PRI) and 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 sponsoring the Man Booker literary prizes and the Man Asian Literary Prize. 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.

FUNDS UNDER MANAGEMENT ANALYSIS

3 months to 31 December 2011

9 months to 31 December 2011

FUM by manager

Investment performance

Investment performance continued

Source: Man database, Bloomberg and MSCI. 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. This is not a complete list of investment products. Funds have been chosen to give a representative view across product range and strategy.

1) Man AHL Diversified plc is valued weekly, but for comparative purposes the last weekly valuation of the month has been used.

2) AHL Alpha plc is valued weekly, but for comparative purposes the last weekly valuation of the month has been used.

3) 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.

4) 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.

5) Represented by GLG European Long Short Fund - Class D Restricted to Unrestricted (29/06/2007) - EUR.

6) Represented by GLG European Equity Alternative IN EUR. Please note that the inception date of GLG European Equity Alternative IN EUR is 26 July 2011.

7) Represented by GLG European Alpha Alternative IN EUR.

8) Represented by GLG European Opportunity Fund - Class D Restricted to Unrestricted (31/08/2007) - EUR.

9) Represented by MLIS European Opportunity Class B EUR ACC.

10) Represented by GLG North American Opportunity Fund - Class A Restricted to Unrestricted (29/06/2007) - USD.

11) Represented by GLG North American Equity Alternative IN USD. Please note that the inception date of GLG North American Equity Alternative IN USD is 24 January 2011.

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 Funds - Class A - USD.

17) Represented by GLG Market Neutral Fund - Class Z Restricted to Unrestricted (31/08/2007) - USD.

18) Represented by GLG European Distressed Fund - Class A - USD.

19) Represented by Ore Hill International Fund II Ltd.

20) Represented by GLG Emerging Markets Fund - Class A Restricted to Unrestricted (31/08/2007) - USD.

21) Represented by GLG EM Diversified Alternative IN EUR.

22) Represented by GLG Atlas Macro Fund - Class A - USD.

23) Represented by GLG Atlas Macro Alternative IN H GBP.

24) Represented by GLG Japan CoreAlpha Equity Fund - Class C to Class AAX (28/01/2010) - JPY.

25) Represented by GLG Global Equity Fund Class I T USD.

26) 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.

27) Represented by Man Absolute Return Strategies USD I.

28) Represented by Man Dynamic Selection USD I.

29) Represented by GLG Multi-Strategy Fund - Class A - USD Shares.

30) Represented by MSCI World Net Total Return Index hedged to USD.

31) Represented by Citigroup World Government Bond Index hedged to USD (total return).

32) Represented by Citigroup High Grade Corp Bond TR.

33) HFRI index performance over the past 4 months is subject to change.

Please note that the dates in brackets represent the date of the join in the linked track records.

HIGHLIGHTS FROM MAN'S REPORT & ACCOUNTS FOR THE NINE MONTHS TO31 DECEMBER 2011

CHIEF EXECUTIVE'S REVIEW

We ended the year with lower funds under management (FUM) of $58.4 billion. Lower management and performance fees combined to reduce diluted earnings per share for the nine months to 31 December 2011 to 7.6 cents. Man remains soundly profitable, strongly capitalised and well positioned strategically.

In 2012, our focus on investment performance, meeting client needs and efficiency will move us towards our long term goal to be the leading alternative investment manager globally. Liquid alternative investments remain a growing sector of the asset management industry. Our careful positioning, long established performance track record and capital strength position us to participate in this growth as investor sentiment improves.

2011 results

The nine months to 31 December 2011 were a challenging trading period for Man. Record sales early in the period contributed to gross sales for the nine months of $16.7 billion. These were spread across strategies, investor types and geographies and reflect the breadth and depth of our enlarged business. Inflows were strongest in open-ended products, reflecting increased investor focus on liquidity, regulation and ease of access. Extreme market volatility over the summer severely tested investor risk appetite across the asset management industry and caused redemptions to spike in September before they normalised in the final quarter. We ended the period with funds under management of $58.4 billion, down from $69.1 billion at the end of March 2011.

These challenging conditions impacted many markets, with the HFRX global hedge fund index ending the year down 8.9%. AHL, our systematic, trend-following managed futures manager, gave up about half of its 2010 gains in 2011 to finish the year down 6.8%, with short duration price trends and significant sharp reversals proving difficult to navigate. Performance at GLG varied significantly across investment styles. The European long short strategy outperformed industry benchmarks to finish the year up 7.0%. There was good relative performance from European distressed, equity market neutral, credit and macro styles, but emerging markets and equity styles driven primarily by stock selection recorded double digit negative performance. Man Multi-Manager also had a challenging year, but demonstrated that diversification across styles, disciplined strategy selection and defensive risk positioning could provide downside protection.

Adjusted profit before tax for the nine month period was $262 million, compared to $599 million for the twelve months to March 2011. Negative AHL performance and the resulting de-gear were key drivers of a substantial reduction in guaranteed product funds under management - the highest margin part of our product range. This adverse change in product mix, together with reduced performance fees, resulted in lower earnings.

While we remain well positioned for profitable growth as markets and investor demand improve, we have stepped up our focus on efficiency to reflect changes in our product and margin mix. In 2011, our biggest operational efficiency project was to outsource services such as valuations, fund accounting and registrar functions. This enabled our investors to benefit from the scale and expertise of a third party provider and will generate cost savings of $20 million in 2012. We also looked at our funding requirements and bought back some of our outstanding debt to generate a further $20 million of interest expense savings in

2012. With a further $75 million of savings announced in January 2012, $50 million of which will be delivered in 2012 and $25 million in 2013, we have measures in place to reduce our 2012 cost base by a total of $90 million. Man remains well capitalised and cash positive. The Board has proposed a final dividend for the three month period to 31 December 2011 of 7.0 cents per share, to give a maintained total dividend, pro-rated for the nine month period, of 16.5 cents per share. Given our financial strength and confidence in the long term prospects for our business, we intend to pay a total dividend of 22 cents per share in 2012.

2011 operating progress

In our previous Annual Report, we said that our key priority for this reporting period was to capitalise on the substantial business transformation we undertook with the acquisition of GLG. We made significant progress over the last nine months in shaping our enlarged business for future growth.

A full spectrum of investment styles with cross cycle appeal

With the integration of GLG now complete, we are actively marketing a comprehensive suite of systematic and discretionary liquid alternative investment strategies to existing and potential new investors. Our 2011 sales featured $2.5 billion from sources new to the enlarged firm including a $1 billion GLG managed currency overlay in Japan, $600 million in guaranteed products including the new Man-IP 220 GLG, $800 million of allocations into GLG from new territories such as Australia and a $145 million UCITS multi strategy product drawing on the trading capabilities of all our internal styles.

We acted to fill gaps in the market for new systematic strategies by bringing together quantitative expertise from AHL, GLG and Man Multi-Manager to form Man Systematic Strategies (MSS). Over the course of the year MSS successfully launched its first systematic equity fund, delivered positive returns of 25.6% from its volatility based TailProtect product and is bringing to market systematic offerings in fixed income and commodities. MSS finished the year with assets of around $1 billion and considerable interest in TailProtect in particular, which has translated into early 2012 allocations.

Our ability to perform for investors is a function of the talent and commitment of everybody at Man. We continued our programme of investing in our investment management capabilities through 2011.

AHL expanded the number of instruments traded with beneficial effects on returns; recalibrated predictors; refined portfolio construction techniques; and formalised a sector team structure which aligned research more closely to price behaviour in specific markets. AHL's Hong Kong operation, expanded in May 2011 to create standalone trading capability, now covers 49 Asian markets and traded around $4 billion a

day in 2011. In the past two years, the Asia desk has reduced Asian trading costs by more than 20%.

The integration of GLG provides a robust and versatile investment management platform with significant potential to expand existing strategies and add new styles. Ore Hill was brought onto the GLG platform in New York to strengthen our credit capabilities and enhance Ore Hill's operational effectiveness. A new Asian team is building out our Asian discretionary investment capabilities to meet investor demand for exposure to Asian assets.

In Man Multi-Manager, more detailed position level analysis through an increased proportion of allocations to managed accounts has fed through into a more proactive approach to managing investor portfolios. Assets have steadied, and we now have $8.1 billion under management in managed accounts. The GLG multi-strategy portfolio which dynamically invests across the firm's in-house styles finished the year over 400 basis points ahead of the industry's investable benchmark.

I was particularly pleased in the period with the way we used our expanded knowledge of the markets and trading dynamics to protect the firm and its investors from challenging counterparty issues. These arose in futures clearing markets and more broadly, as Eurozone exposures threatened to undermine finance counterparties in Europe and beyond.

The firm now benefits from a senior management team participating more directly in the markets we invest in, the money we run for clients and in developments across asset management, with the composition of our Executive Committee reflecting this. I am grateful not only to my Executive Committee colleagues but to everyone at Man who has contributed to the progress we have made this year.

Accessing deep markets by addressing investor preferences

In 2011, we saw private investors, in particular in Europe, accessing the liquidity offered by our open-ended regulated products to build up cash holdings at a time of significant volatility. The resulting reduction in open-ended FUM says more about short term market dynamics than the popularity of these formats, which remain firmly part of investor preference for onshore, regulated investment vehicles. We will continue to participate in these markets and expect an increasing proportion of our private investor assets to be in this form.

Our biggest launch last year was Nomura Global Trend, an AHL fund offering daily liquidity and exposure to high yielding currencies, with the potential to pay a monthly dividend, features which are especially appealing to the Japanese private investor sector. We were the first manager to offer a managed futures product with these popular features to the $760 billion Japanese onshore mutual fund market.

We continued to develop our institutional capabilities in markets as geographically diverse as Australia, where we saw our first institutional allocations to GLG, and the United States. We have continued to make progress in the United States, where we have created a tailored suite of US institution friendly products and

have a range of strategies rated favourably by tier one consulting firms. We surpassed the billion dollar annual asset raising mark in the United States for the first time in 2011.

2012 priorities

Building on our progress in 2011, we are focused on three priorities - investment performance, meeting client needs and efficiency. Very simply, this begins with investment performance.

Investment performance

At AHL, we are bringing renewed focus to broad themes such as speed of trading and, through our sector teams, to the specific markets where we have seen weaker relative performance. We will step up our collaboration with the Oxford Man Institute of Quantitative Finance on specific projects.

At GLG, we continued to refine our focus on capturing the upside from markets and managing the risks to capital from volatility and uncertainty, as we work hard to build products back to high water marks. A number of styles, notably equity long short, emerging markets and market neutral, have started 2012 very strongly.

In Man Multi-Manager, we will continue our 2011 work to create conviction-led returns from controlled risk taking, leveraging our managed account infrastructure and analytics. The Man Multi-Manager team is also responsible for managing our guaranteed product range, where the level of funds under management in AHL combination products is highly variable with AHL performance.

Our strong capital position and versatile investment management platforms enable us to contemplate additional investment opportunities on a targeted basis. However, we anticipate that our growth will be largely organic, as we capitalise on our investment management talent and infrastructure to build assets and demonstrate performance.

Meeting client needs

Looking at our 2012 product pipeline, we continue to see opportunities in both private investor and institutional markets.

We expect private investor demand to continue to be focused on ease of access through onshore products, reflecting a trend we have participated in over several years. The liquid nature of our chosen investment styles make them well suited for onshore formats, and we have $8.5 billion of our funds under management in UCITS formats across 35 strategies.

The transition in our product mix from guaranteed formats to open-ended products will be reflected in our revenue base as well as in increased frequency in our redemptions and subscriptions. Creating onshore products within the constraints of sometimes embryonic regulatory frameworks and competing for assets in broader markets is a slower, more patient build process than we see in some of our other channels. However, having the scale and resources to participate in the growth of these markets remains a very significant competitive advantage. On the institutional side, we will access demand through managed account platforms, detailed reporting, regulated structures and over thirty years of in depth knowledge and experience working with pension funds, insurance companies and sovereign wealth funds globally.

While the projected mix between institutional and private investor assets is always hard to assess, our structuring capabilities and local knowledge position us to participate in all sources of allocation.

Through uncertain markets, maintaining existing assets is as important for us as delivering new flows. Reporting on a clear and timely basis, operational excellence, informed regular dialogue with investors and being prepared for product rollovers and able to facilitate switches are all key to retaining assets.

Efficiency

While we have maintained our focus on investing for growth against a tough market backdrop, we continue to pursue efficiency gains to reflect changes in our product and margin mix. Sources of efficiency which we have already worked on include increasing screen-based reporting to clients, reducing transaction costs in the execution of our trading and expanding GLG's derivatives trading platform for use by AHL.

Our greatest asset is our people, and we continue to balance the need to attract, motivate and retain top talent with the imperative to distribute returns equitably between employees and shareholders. Our remuneration arrangements are closely linked to performance, with the result that cash bonus spend

for the nine month period reduced by 28%, in line with earnings. Our compensation cost to revenue ratio for the period was 33% and we aim to keep this ratio within a range of 30-40% - well in line with industry averages.

In 2012, we are intensifying our focus on working more effectively, without compromising investment performance or client service. In total in 2012, we will deliver $70 million of operational savings, with a further $20 million to be saved from a reduction in financing costs and another $25 million of savings identified for 2013. After 18 months of integrated operations, we have identified opportunities to consolidate infrastructure, buildings and teams, rationalise product lines and reduce headcount. With the majority of the savings coming from operations functions rather than investment management or distribution, I am confident that we will be able to grow funds under management from our reduced cost base, and improve our earnings growth.

Outlook

Our discretionary investment managers have made a strong start to 2012, demonstrating the power of the combined business to counterbalance periods of weaker performance at AHL. At 27 February 2012, AHL was 10.9% below high water mark on a weighted average basis, and at 24 February 2012 two thirds of GLG funds were above or within 5% of performance fee highs.

While the product pipeline remains healthy and investor interest is rebuilding, in particular for some of the stronger performers from last year, I am expecting that the pace of asset raising will remain slow in the first half of 2012 - in the absence of substantial performance catalysts. Redemption levels will remain prone to swings in investor sentiment.

Funds under management at the end of February 2012 are estimated to be $59.5 billion, reflecting positive investment performance but slightly negative asset flows so far this year.

My conversations with our largest fund investors and distributors reinforce the more general industry commentary that appetite for liquid alternative investments continues to build, and that established industry participants will be the largest gainers from this trend.

Although 2012 has the potential to be another challenging year for markets, recent performance suggests that market participants are pragmatic about the global economic outlook. At Man, we remain focused on maintaining the firm's unique positioning and managing the transition in our product and margin mix. The fundamental strength of our business will enable us to adapt and grow as market sentiment improves.

FINANCE DIRECTOR'S REVIEW

Change of financial year end

Man has changed to a December year end to align its reporting cycle with that generally adopted in the asset management industry.

This report covers the nine months from 1 April to 31 December 2011. We are required, for comparative purposes, to include the prior reported year ended 31 March 2011. The GLG acquisition was completed in October 2010. Therefore the results for the year ended 31 March 2011 include 5.5 months of GLG's results, whereas the current period includes GLG for the full nine months. The two periods are therefore not directly comparable and we have explained changes that occurred during the year in absolute terms rather than in relation to prior year.

Funds under management (FUM)

FUM at the start of the period was $69.1 billion and during the period declined to $58.4 billion as a result of net outflows ($1.5 billion), negative investment performance ($4.0 billion), a reduction in leverage as the guaranteed products degeared ($3.8 billion) and negative foreign currency movement and acquired FUM ($1.4 billion). We acquired the remaining equity interest in Ore Hill and this $300 million of FUM is included from the date of acquisition on 3 May 2011.

Guaranteed products

Guaranteed FUM, our highest margin product grouping, reduced by $5.1 billion in the nine months to December 2011 which had a significantly negative effect on revenues.

There were four launches of guaranteed products in the period which raised in aggregate $625 million, including the new Man IP220 GLG, the first guaranteed product to combine AHL and GLG.

Redemptions during the period were $1.5 billion, approximately 12% of average FUM. $500 million of guaranteed products matured during the period, $150 million of which was reinvested into subsequent guaranteed product launches. In calendar year 2012 there is $320 million of maturing guaranteed products and the weighted average life to maturity of the guaranteed product range is 7 years.

Negative investment performance for the guaranteed products was $500 million. For the investor, the performance for Man-IP 220 for the nine months to 31 December 2011 was -0.3%, including the change in value of the securities supporting the guarantee, which is not included in FUM.

As a result of redemptions and the negative investment performance, trading capital reduced and there was a $3.8 billion de-gear in the products. There is a risk that a continued period of negative performance in AHL could reduce trading capital and cause a further de-gear of the product, thereby reducing FUM and revenue.

Open-ended alternative products

Open-ended alternative FUM decreased by $1.8 billion in the nine months to 31 December 2011 with a $2.6 billion decrease in GLG alternatives FUM being partially offset by a $0.8 billion increase in AHL open-ended FUM.

Sales of AHL were $4.4 billion, including $2.5 billion raised in the quarter to 30 June 2011 in the new Japanese onshore open-ended AHL product: Nomura Global Trend. GLG alternative sales were $6.1 billion, including $1.0 billion of a currency overlay product for Nikko in Japan.

Quarterly redemption rates for open-ended alternatives were 29% in the second quarter of the calendar year and rose to around 50% in the third and fourth quarters as European retail investors in particular sought liquidity from the large proportion of our funds offering short notice periods. The composition of FUM by dealing date shows that 50% of FUM has daily and weekly dealing dates. These dealing dates are consistent with the liquidity of the underlying investment strategy and in certain products are required by regulation.

AHL had positive $100 million of investment performance in the open-ended products, with flat performance in the second quarter of the calendar year followed by strong positive performance in the third quarter and negative performance in the fourth quarter.

GLG open-ended alternatives had overall negative $1.3 billion of investment performance. Negative performance in emerging markets, alpha select and European opportunities styles was partially offset by positive performance in European long short, market neutral and credit strategies.

Foreign exchange movements, primarily in relation to the Euro, reduced reported open-ended alternatives FUM by $1.1 billion.

Institutional products

Institutional FUM reduced by $0.5 billion in the period. Sales of $2.8 billion included $1.6 billion of funding from the USS and BVK mandates. Institutional redemptions reduced during the period resulting in a net positive flow for the nine months.

Institutional investment performance was negative $800 million as market reversals impacted performance across a range of styles.

Long only products

Long only FUM, our lowest margin product grouping, reduced by $3.3 billion in the nine months to 31 December 2011 which included net outflows of $1.8 billion reflecting redemptions from institutional clients.

Long only strategies had broadly flat performance in the second and fourth quarters but had a very challenging third quarter due to the sharp falls in the equity markets in August resulting in a negative investment performance of $1.5 billion in the period.

Summary income statement

Gross management fees and margins

Average FUM for the period was $67.6 billion compared to $52.4 billion for the prior year (including FUM from GLG from the date of acquisition). The average gross management fee margin was down 50 bp from the prior year reflecting the inclusion of GLG for the full period and a product mix shift caused by the reduced proportion of guaranteed products compared to open-ended products. This reduction in our highest margin guaranteed product FUM has caused a drop in revenue on an annualised basis of around $105 million.

Gross management fees by product type

Gross management fee margins by product were stable compared to the prior year, with the exception of AHL open-ended alternatives where gross management fees declined due to a product mix shift from sales of institutionally priced products, for example Nomura Global Trend.

The annualised run rate of gross management fees based on the composition of FUM at 31 December 2011 is approximately $1,350 million, which is lower than the annualised gross management fees for the nine month period reflecting lower FUM and reduced guaranteed product FUM.

Performance fees

At 31 December 2011, approximately 60% of FUM was eligible to earn performance fees (the majority of AHL, 80% of GLG alternatives and 15% of GLG long only). Performance fees are calculated as a percentage of the net appreciation in the fund value over the lock in period above a high water mark or referenced minimum return. Just over half of AHL performance fees lock in weekly and just under half monthly. GLG records performance fees in June and December each year.

Gross performance fees for the period were $94 million, $38 million from AHL and $56 million from GLG. Gross performance fees were $203 million for the 12 months to 31 March 2011 split approximately equally between AHL and GLG. The decrease in gross performance fees in the period reflects negative investment performance which resulted in products being away from performance fee earning benchmarks. At 31 December 2011 60% of the GLG assets were within 5% of earning performance fees and AHL was approximately 12% on a weighted average basis from the previous performance fee high water mark.

Distribution costs

Distribution costs comprised $83 million of placement fees and $154 million of investor servicing payments.

Placement fees are paid for product launches or sales (typically 1-4% of new sales depending on product type) and are capitalised and amortised over 2-5 years. The capitalised placement fees at 31 December 2011 were $157 million with a weighted average remaining amortisation period of 2.2 years. If an investor redeems their investment in a fund product the corresponding unamortised placement fee is written off.

Investor servicing fees are paid to intermediaries and employees for ongoing investor servicing and are around 0.5% of average alternative FUM. This rate depends on the volume of sales, the mix between retail and institutional channels and the mix of open-ended and guaranteed products.

Effective from 1 January 2011, the internal institutional sales force moved from discretionary bonus compensation to a commission based bonus regime. The effect of this was to increase distribution costs and reduce compensation costs by $10 million in the current period.

Asset servicing

As previously announced, asset servicing has been transitioned to third party providers during the period. The internal costs associated with these processes have now been reduced resulting in a run rate saving of approximately $20 million from 31 December 2011.

Compensation costs

Compensation comprises fixed base salaries, benefits and variable bonus compensation (cash and amortisation of deferred compensation arrangements). Compensation costs in total, excluding adjusting items, were $415 million or 33% of revenue, compared to 34% for the previous year (excluding adjusting items and a GLG purchase price accounting credit of $54 million).

Fixed compensation and benefits were $191 million for the period compared to $212 million for the 12 months to 31 March 2011. The prior year included fixed compensation for GLG from 14 October 2010, the date of the acquisition. During the period the remaining compensation cost synergies from the GLG acquisition were achieved.

The total compensation to revenue ratio is expected to be in a range of between 30% and 40% of total revenues. This ratio is likely to be at the higher end in periods when there is a higher proportion of GLG gross performance fees, as the compensation accrual on gross performance fees is around 50%.

Other costs

Other costs were $262 million, excluding adjusting items, for the nine month period compared to $265 million for the prior year (excluding adjusting items). On an annualised basis the increase in costs is due to the inclusion of a full year of GLG costs, net of acquisition synergies, and the previously indicated increase in rent and depreciation expense connected with the new London headquarters building.

Cost savings

We have announced cost reductions of $75 million. Combining these savings with the $20 million reduction in costs noted under asset servicing there will be $95 million of total savings, $70 million of which will be realised in 2012 and $25 million in 2013. Approximately $66 million will be saved from other costs, $19 million from fixed compensation and $10 million from variable compensation.

The base line at 31 December 2011 from which the announced savings will be measured is $240 million for fixed compensation costs and $360 million for other costs. The costs to implement these savings are estimated to be $15 million.

Net finance costs

Net finance costs were $56 million for the period. This included $20 million related to the premium paid on the repurchase of debt during the period. The annualised interest saving on the debt repurchased is $20 million and including the impact of the reduced level of cash on which we earn interest, net finance expense is anticipated to be around $42 million for the calendar year ending 31 December 2012.

Net management fees and net performance fees

Net management fees decreased in the period as a result of the decrease in gross management fees, noted above, partly offset by reduced variable compensation. In addition the sale of the equity interest in BlueCrest in March 2011 resulted in minimal associate income being recorded in this period.

The decrease in net performance fees reflects reduced gross performance fees and relatively lower variable compensation in the year ended 31 March 2011 due to the inclusion of a GLG purchase price adjustment for performance based compensation of $45 million.

Adjusted profit before taxes

The adjusted profit before tax is $262 million, compared to $599 million in the prior year. The adjusting items in the period, detailed in Note 7 of the Group financial statements primarily relate to the non-cash periodic amortisation charge for the GLG investment management contract intangibles ($47 million), and restructuring charges.

Net income and taxes

Net income after tax was $159 million (12 months to 31 March 2011: $211 million). The average tax rate is 17.6%, compared to last year's rate of 15.7%, which has increased due to losses for which no tax relief has been recognised and reduced relief on share-based compensation costs. Net income applicable to ordinary shareholders, which is used in the earnings per share calculations, was $141 million compared to $187 million in the prior year, reflecting the inclusion of the post-tax coupon on the fixed rate Perpetual Subordinated Capital Securities.

Balance sheet

The Group's balance sheet remains strong and liquid. At 31 December 2011, shareholders' equity was $4.1 billion and net tangible assets were $1.4 billion. Cash and cash equivalents decreased as a result of dividends, debt repurchases and the purchase of Lehman receivables from GLG funds, partially offset by reduced loans to fund products.

The carrying value of the franchise value (goodwill) and other acquired intangibles, primarily relating to GLG ($1.7 billion), was re-evaluated during the period based on a discounted cash flow valuation. The excess of this valuation over the carrying value of the GLG franchise value and intangibles is around $95 million. The valuation approach uses cash flow projections based on a stressed version of Man's approved budget for the year to 31 December 2012 with a further two years of projections (2013 and 2014) plus a terminal value. The valuation is sensitive to the assumptions regarding net sales and investment performance in future periods as detailed in Note 9 of the Group financial statements. None of the recently announced $75 million cost savings have been included in this evaluation.

Liquidity

The business' operating activities are cash generative with operating cash flows of $677 million. Net liquid assets were $1.3 billion at 31 December 2011. During the period, €218 million ($291 million) of the €600 million ($777 million) 2015 Senior Fixed Rate Notes and $58 million of the $229 million 2013 Senior Fixed Rate Notes were repurchased. The committed syndicated revolving loan facility was renewed during the period at $1.56 billion, with a final maturity date of 22 July 2016. This facility was undrawn at the period end. The committed facility and drawn debt do not have financial covenants or ratings triggers. At 31 December 2011 all borrowings had a maturity greater than two years except for the $172 million of 2013 Senior Fixed Rate Notes.

Regulatory capital

Man is fully compliant with the FSA's capital standards and has maintained significant excess regulatory capital during the period. At 31 December 2011 excess regulatory capital over the regulatory capital requirements was $587 million, after a capital buffer but before the proposed final dividend.

GROUP FINANCIAL STATEMENTS

In preparing the financial information in this statement the Group has applied policies which are in accordance with the International Financial Reporting Standards as adopted by the European Union at 31 December 2011. Details of the Group's accounting policies can be found in the Group 2011 Annual Report. The financial information included in this statement does not constitute the Group's statutory accounts within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the nine months ended 31 December 2011, upon which the auditors have issued an unqualified report, will shortly be delivered to the Registrar of Companies.

The annual report will be posted to shareholders on 14 March 2012. The Company's Annual General Meeting will be held on Tuesday 1 May 2012 at 11 am at Queen Elizabeth II Conference Centre, Broad Sanctuary, Westminster, London SW1P 3EE.

Group Income Statement

1. Revenue

Management fees for the nine month period were $1,160 million, compared to $1,452 million for the prior year. Gross management fees have decreased in comparison to the prior year due to the reduction in our highest margin guaranteed product FUM.

Performance fees for the period were $94 million (12 months to 31 March 2011: $203 million), $38 million from AHL and $56 million from GLG.

2. Distribution costs

Distribution costs paid to intermediaries and Man's sales executives are directly related to their marketing activity and the investors serviced by them. The distribution expense is therefore variable to sales, FUM, and the associated management fee income to sustain management fee margins.

Distribution costs of $237 million (12 months to 31 March 2011: $318 million) comprise product placement fees of $83 million (12 months to 31 March 2011: $151 million) and investor servicing fees of $154 million (12 months to 31 March 2011: $167 million).

Man's internal sales force is compensated on the basis of commissions for originating assets and servicing investors and intermediaries. Distribution costs this period included $10 million of internal sales commission costs, in particular for the institutional teams, which were previously included in compensation as these teams received discretionary compensation.

3. Asset services

Asset services include valuations, fund accounting, and registrar functions performed by third parties under contract to Man, on behalf of the funds. The cost of these services is based on activity or FUM, therefore variable with activity levels and FUM.

Previously many of these services had been performed internally. During the period we completed an initiative to transition these services to third party providers and thereby reduce our internal resources. Asset services costs for the period were $24 million (12 months to 31 March 2011: $16 million).

4. Compensation

Compensation is our largest cost and an important component of our ability to retain and attract talent at Man. In the short term the variable component of compensation adjusts with performance. In the medium term the active management of headcount can reduce fixed based compensation, if required.

Compensation costs in total were $415 million, before adjusting items, or 33% of revenue compared to 34% for the previous year (excluding adjusting items and a GLG purchase price accounting credit in the prior period of $54 million).

Fixed compensation and benefits was $191 million compared to $212 million in the prior 12 months period ended 31 March 2011. Fixed compensation comprises: salaries - fixed; pension costs; and a share of the social security costs. The prior period included fixed compensation from GLG from 14 October 2010, the date of the acquisition. During the period the remaining compensation cost synergies from the GLG acquisition were achieved.

The unamortised deferred compensation at period end was $91 million (12 months to 31 March 2011: $177 million) which had a weighted average remaining vesting period of 1.6 years (31 March 2011: 2.0 years). The decrease is due primarily to the share-based and fund product based amortisation charges, net of a small amount of new additions in the period.

In the prior period GLG acquisition costs primarily relate to redundancy costs associated with achieving the acquisition cost synergies and were treated as adjusting items (refer Note 7).

In the prior period, pension costs include $12 million related to amounts paid to beneficiaries in the defined benefit plan who elected to exit the plan.

5. Other costs

The level of expenses, including occupancy, communication, end user technology and travel and entertainment is linked to headcount. Within a range of FUM balances we can achieve scalability. As FUM decreases beyond that range we have to take action to rebase our expenses in order to maintain our management fee margins.

Other costs, before adjusting items, were $262 million in the period, compared to $265 million in the prior period. The increase on an annualised basis in other costs compared to the prior period primarily relates to occupancy costs and depreciation in connection with the new London headquarters and the inclusion of GLG costs for the full period, partially offset by the cost synergies related to the acquisition.

Restructuring costs primarily relate to onerous lease contracts on property in New York, where the plan is to consolidate our three existing offices. In the prior period, the restructuring costs and GLG acquisition costs primarily related to professional fees. Restructuring and GLG acquisition costs are treated as adjusting items to statutory profit (Note 7).

6. Finance expense and finance income

Finance expense includes interest expense on borrowings and fees of $83 million (12 months to 31 March 2011: $86 million). Finance income is $27 million (12 months to 31 March 2011: $40 million). The relative increase in finance expense from the prior period is primarily due to a $20 million charge relating to the debt buyback during the period.

7. Adjusted profit before tax -continuing operations

Statutory profit before tax from continuing operations is adjusted for material items to give a fuller understanding of the underlying profitability of the business.

8. Earnings per ordinary share (EPS)

The calculation of basic EPS is based on: a basic post-tax net income, after payments to holders of the Perpetual Subordinated Capital Securities ($18 million after tax, $24 million for the prior period), of $141 million compared to $187 million in the prior period; and ordinary shares of 1,826,586,175 (12 months to 31 March 2011: 1,749,928,034), being the weighted average number of ordinary shares in issue during the period after excluding the shares owned by the Man employee trusts. For diluted EPS, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares.

The details of movements in the number of shares used in the basic and fully dilutive earnings per share calculation are provided below.

*  The difference between profit after tax and basic and diluted post-tax net income is the adding backof the expense in the period relating to the fixed rate Perpetual Subordinated Capital Securities, totalling $18 million post-tax at 26% (12 months to 31 March 2011: $24 million).

Group Statement of Financial Position

The Statement of Financial Position represents the assets and liabilities of Man as at the period end. The most significant assets of Man are the franchise value (goodwill) invested in our business through acquisitions and the cash balances which represent part of our liquidity pool. These assets, together with other operating assets are supported by our shareholder equity base and issued debt.

9. Franchise value (goodwill) and acquired intangibles

(i) Acquisition of business relates to Ore Hill in the current period and to the GLG acquisition in the prior period.

(ii) Includes investment management contracts (IMCs), brand names and distribution channels.

(iii) The allocation of GLG goodwill to cash generating units was completed during the period. The comparative figures reflect this.

Allocation of goodwill to cash generating units

The franchise value and other intangible assets acquired on the acquisition of GLG has been allocated to the cash generating units (CGUs) that are expected to benefit from the synergies of the business combination. 77% of the acquired goodwill and all other intangible assets have been allocated to the GLG CGU (goodwill: $1,077 million; other intangibles $672 million) with the remaining 23% of the goodwill allocated to the AHL CGU (goodwill: $326 million), which primarily represents the revenue synergies related to the AHL component of new AHL GLG IP220 structured products that were anticipated to be launched post acquisition. The AHL GLG IP220 structured products launched in calendar year 2011 raised $1.05 billion of funds under management, including leverage (of which the AHL component was $650 million).

GLG cash generating unit recoverable amount

The recoverable amount of each CGU is the benefit to be derived from the asset, either through future use ("value in use") or by disposal ("fair value less costs to sell") of the asset, whichever is the higher. In the case of the GLG CGU a value in use calculation gives the higher valuation, as a fair value approach would exclude some of the revenue synergies available to Man through its ability to distribute GLG products using its well established distribution channels, which is unlikely to be fully available to other market participants.

The value in use approach uses cash flow projections based on a stressed version of the Group's approved budget for the year to 31 December 2012 with a further two years of projections (2013 and 2014) plus a terminal value. The following valuation analysis is based on best practice guidance whereby a terminal value is calculated at the end of a short discrete budget period (in this case three years), and assumes no growth in asset flows after the three year budget period.

The value in use approach involves making judgemental assumptions. Management were assisted by independent valuation experts in carrying out this valuation.

As the GLG acquisition was completed just over a year ago in October 2010 and given recent market conditions, it would be reasonable to expect the net present value of modelled cash flows to be similar to the carrying value, all other things being equal. The strategic rationale for the acquisition and expectations of revenue synergies are still valid. In particular, all the portfolio manager teams are still in place and the key institutional relationships have been maintained. The anticipated cost synergies have been achieved and the anticipated revenue synergies are on track with the new sales achieved since acquisition in line with the original expectations, albeit redemptions have been somewhat higher than anticipated.

Given the relative size of the carrying value of the franchise value for this CGU and the volatility of redemptions and investment performance, management has subjected this valuation to extensive testing. The key assumptions used in the cash flow model relate to investment performance (which can give rise to performance fee income when products are above high water marks) and to net flows (sales and redemptions). Gross investment performance, sales and redemptions are the primary components which impact the growth/decline in funds under management, on which management fee income is based.

In the above table for the model assumptions, the net performance return equivalent is approximately 8% for alternatives and 5% for long only. The actual historical gross returns are approximated from published net returns.

In terms of investment performance, the GLG alternatives composite return since inception is around 16% (gross) and GLG long only composite return since inception of around 7% (gross). The three year track record, which Man uses as a benchmark in its quarterly trading updates to the market, and demonstrates performance post the financial crisis in 2008, is around 14% (gross) for the GLG alternatives composite return and around 11% (gross) for the GLG long only composite return. Man also typically discloses a five year annualised performance track record, which is around 5% (gross) for the GLG alternatives composite return and around -3% (gross) for the GLG long only composite return. The base case performance assumptions used in the impairment model appear to sit comfortably in the range of these historical benchmarks.

Post the financial crisis in 2008, market studies indicated that the alternative investment industry would continue to grow and the actual experience over the last three years has validated these studies. Therefore, in the absence of specific market predictions, historical data is a reasonable guide to future performance.

Despite the difficult market conditions in the second half of calendar 2011, gross sales relating to the GLG CGU were $11.3 billion. The expected significant revenue synergies to be generated from acquiring and integrating the GLG business with Man, and evidence in 2011 that these revenue synergies are being achieved, support the gross sales assumption of $11.5 billion in 2012 and growing at 10% for the two following years. The redemption rate assumption of 35% is in line with both the three and five year average redemption rates, which includes the particularly high redemption levels in 2008 and 2011. Redemptions in 2011 were high (50%) but given the market conditions in this period it is concluded that this was likely to be an exceptional year. Reflecting the high redemptions rates in 2011, the redemption rate assumption has been set at 45% in 2012 and then reducing to 35% in 2013 and 2014, reflecting the longer term historical averages.

The terminal value is calculated at the end of 2014. This is based on the closing funds under management as at 31 December 2014 and assumes nil net sales (sales less redemptions) in all future years. It is assumed that a constant amount of performance fee income is earned post 2014 (nil growth), so that funds under management, and therefore management fee income, only grow through the achievement of the investment performance assumption. This results in an overall terminal growth rate for total net cash flows of 2.1%.

A bifurcated discount rate has been applied to the modelled cash flows to reflect the different risk profile of net performance fee income and net management fee income. The post-tax discount rates applied to the after tax earnings are 11% for net management fee income and 17% for net performance fee income, reflecting the risk associated with each of these net income streams. On a pre-tax basis these discount rates are 12.5% and 20.9% respectively.

Results and sensitivity

The result of the value in use calculation suggests there is headroom of around $95 million over the carrying value of the franchise value and other intangibles balance and therefore no impairment is considered appropriate. However, any reasonably significant adverse change to the key assumptions in the tables above is likely to result in an impairment charge in a future period. In determining meaningful downside sensitivities, a possible scenario, albeit one that is not expected, would be a repeat of the difficult market conditions experienced in 2011. The table below shows three increasingly adverse scenarios, whereby the base case key assumptions are changed to stressed assumptions, which mirror the actual experience in 2011. These stressed assumptions are applied to 2012 only in the first sensitivity; 2012 and 2013 in the second sensitivity; and in 2012, 2013 and 2014 in the third sensitivity.

The stressed assumptions are: sales as per the base case - see above; redemption rate of 50%; and gross investment performance of negative 10% for alternative products and negative 14% for long only products. The table shows the effect of these scenarios and the associated modelled impairment charge that would result.

The results of these sensitivities make no allowance for actions that management would take if such market conditions persisted.

If the post-tax discount rate for net management fee income was increased to 11.5% there would still be headroom of around $16 million but an increase to 12% would result in an impairment of around $53 million. Increasing both discount rates by 1% to 18% and 12% for net performance fee income and net management fee income respectively, would result in a modelled impairment of around $60 million.

Man Multi-Manager (MMM) cash generating unit

The value of the MMM CGU has been reviewed at 31 December 2011 by assessing the fair value of the business based on sum of the parts market earnings multiples applied to the post-tax net earnings for calendar year 2011. It is concluded that no impairment charge is required.

The year ended 31 December 2011 has been chosen as the most appropriate period on which to base the valuation as it represents the restructured business under the leadership of Luke Ellis, who was appointed in September 2010, and is less subjective than choosing a future period.

The most significant assumptions in this valuation are: the allocation of costs relating to the centralised shared infrastructure for operations, product structuring, distribution and other support functions; and the earnings multiple applied to net management fee income. Centralised costs are allocated across internal business units using an activity based costing approach. The average earnings multiples applied by analysts to Man's business and companies similar to MMM are around 11.5 times for management fees and 6 times for performance fees. Applying these multiples to MMM's post-tax earnings of $48 million for the calendar year 2011 would result in a recoverable amount for MMM of $545 million with headroom of around $180 million at 31 December 2011. It could be argued that it would be appropriate to use a lower multiple for MMM compared to that for the total Man Group as the quality of earnings for MMM may be considered to be lower than for AHL. Reducing the earnings multiple for net management fee income by 20% to around 9.2 times would result in a recoverable amount of $435 million with headroom of approximately $70 million. In addition, increasing the allocation of centralised costs by 10% would reduce this headroom to approximately nil.

10. Investments in fund products and other investments

1This excludes the Pension Asset of $92 million (31 March 2011: $91 million).

Loans to fund products

Loans to fund products are short term advances primarily to Man structured products. The loans are repayable on demand. The average balance during the period was $449 million (12 months to 31 March 2011: $493 million). Loans to fund products have decreased compared to the prior period as the structured product FUM has decreased together with the associated leverage.

Other Investments in fund products

Man uses capital to invest in our fund products as part of our on-going business to build our product breadth and to trial investment research developments before we market the products to investors. These investments are generally held for less than one year.

Investment in fund products also includes $40 million (31 March 2011: $50 million) of Man and GLG fund products held against outstanding deferred compensation arrangements.

Total net losses on investments in fund products reported in the Income Statement were $6 million (12 months to 31 March 2011: net gains of $32 million).

Other investments

Man has entered into a series of transactions to acquire, at the net asset values at the date of the transactions, all the residual exposure to the Lehman estates from funds (Lehman claims) managed by its wholly owned subsidiary GLG Partners LP. These transactions mainly relate to GLG's European Long Short and North American Opportunity strategies.

The total consideration for the transactions was $355 million, payable in cash. In return, Man will be entitled to benefit from, or bear the risk of, any change to the net asset value of the Lehman claims, with the funds sharing 50% of the upside in excess of a threshold where potential client money recoveries are significantly higher than currently expected. Man will be entitled to the proceeds of each claim as and when it is distributed by the relevant Lehman estate, although the precise timing of receipts is difficult to determine given the complexity of the Lehman insolvency. In September 2011, $22 million of the claims were realised at their carrying value.

The complex nature of underlying claims means there is no observable market for the Lehman exposures. The purchase price was based on the aggregate of the carrying value of the Lehman exposures as recognised by the funds. The fair values of the funds' net assets are calculated monthly, and reviewed by the funds' Independent Pricing Committees. The fund directors approved the transaction following independent financial and legal analysis. Man has elected to account for the Lehman exposures as available-for-sale financial assets, which are held at fair value.

The fair value of the Lehman claims is based on a probability adjusted discounted cash flow scenario-based model. As discussed above, there is significant uncertainty over the timing of the distribution of receipts. Management have estimated the timing of receipts from each claim but the degree of uncertainty involved is a primary reason for these assets being classified as Level 3 financial assets. Given the complex nature of the claims, it is not practical to give a meaningful quantification of the assumptions related to the timing of recovery of the assets. Downward revisions in expected recoveries are likely to be recorded in the Income Statement as impairments, as they are likely to result from legal proceedings impacting on recovery rates and timings of distributions. Upward revisions will be recorded in other comprehensive income until the administration process is materially complete, at which time any accumulated unrealised gains will be recycled through the Income Statement.

Cash flows from operating activities are 426% of statutory post-tax income. The primary difference between post-tax income and cash flows from operating activities relates to: the non-cash amortisation of intangible assets, comprising GLG investment management contracts ($47 million), and placement fees ($75 million); other non-cash adjustments, including depreciation ($21 million) and share-based payments expense ($70 million); as well as a reduction in loans to fund products ($217 million), which are considered to be part of working capital.

In the prior period, cash flows from operating activities are 193% of statutory post-tax income. The primary difference between post-tax income and cash flows from operating activities relates to non-cash items for the impairment charge for the Man Multi-Manager and Ore Hill businesses and the amortisation of intangibles, offset by the gain on sale of BlueCrest.

Cash flows from investing activities primarily relate to the purchase of the Lehman claims (Note 10) and the fit out of Riverbank House.

In the prior period, cash flows from investing activities primarily relate to the net cash paid to acquire GLG, partly offset by the consideration received for the disposal of the equity holding in BlueCrest.

Cash flows from financing activities primarily relate to the payment of dividends ($394 million), the purchase of shares for cancellation ($143 million), the purchase of shares for deferred compensation arrangements ($56 million), and the purchases of senior debt ($349 million).

In the prior period, cash flows from financing activities primarily relate to the payment of dividends to ordinary shareholders ($613 million), the repayment of the convertible note and senior debt acquired as part of the GLG acquisition ($583 million), and the purchase of own shares by the ESOP Trust ($108 million).

11. Cash, liquidity and borrowings

Cash and cash equivalents of $1,639 million (31 March 2011: $2,359 million) represent our funded liquidity resources to support our on-going operations and our stress liquidity requirements. The cash is invested in accordance with strict limits consistent with the Board's risk appetite, which consider both the security and availability of the liquidity.

The business is cash generative at an operating level and it has the ability to generate significant equity and cash through performance fees, particularly from AHL. Man's strategy is to have a diversified borrowing base combining both funded and unfunded committed facilities and sourced from financial institutions and capital markets.

Man's liquidity resources, aggregated to $3.2 billion at period end (31 March 2011: $4.8 billion) and comprised; net free cash balances (cash and cash equivalents less funded debt and the Perpetual Subordinated Capital Securities) of $273 million (31 March 2011: $581 million); total debt of $1.4 billion (31 March 2011: $1.8 billion), held as cash balances; and an undrawn committed syndicated loan facility of $1.56 billion (31 March 2011: $2.4 billion).

Man's available liquidity position can be summarised as follows:

During the period, €218 million ($291 million) of the €600 million ($777 million) 2015 Senior Fixed Rate Notes and $58 million of the $229 million 2013 Senior Fixed Rate Notes were repurchased.

Group Statement of Changes in Equity