Last checked at 18 Oct 2012 07:00
18 October 2012
INTERIM MANAGEMENT STATEMENT for the quarter ended 30 September 2012
Key points
·; Funds under Management (FUM) at 30 September 2012 of $60.0 billion, up 14% since 30 June 2012 ($52.7 billion) with the FRM acquisition closing on 17 July, adding $8.3 billion to FUM
·; Net outflows in the quarter of $2.2 billion with the increase compared to Q2 ($1.4 billion) concentrated in lower margin product lines (Institutional FoF and GLG long only)
·; Positive investment movement of $0.5 billion in the quarter
- The majority of GLG alternative funds had positive performance in the quarter with the strongest performance coming from various of the credit and convertibles strategies
- Over three quarters of performance fee eligible GLG FUM at or within 5% of high water mark at end September
- AHL had positive investment movement of $0.3 billion; AHL was approximately 14% from peak on a weighted average basis at end September
·; FX and other movements of $0.7 billion in the quarter, driven by the strengthening of the Euro against the dollar. The impact of guaranteed product rebalancing was slightly positive in the quarter
·; Previously announced cost saving programmes remain on track
·; Financial position remains strong with around $500 million of surplus regulatory capital at 30 September 2012
Peter Clarke, Chief Executive of Man, said:
"Man's funds under management increased in the quarter, driven by the acquisition of FRM which completed in July. This transaction has created the largest non-US based hedge fund of funds business and I am pleased to say that integration has progressed quickly and efficiently with positive feedback from clients.
"The flow environment continues to be challenging and this was reflected in lower sales in the quarter. Redemptions were in line with the levels experienced in the second quarter which resulted in increased net outflows, albeit in lower margin product lines. Investor sentiment, and consequently the outlook for flows, continues to be subdued.
"Against this backdrop, our focus remains on delivering performance for our investors and improving efficiency. We continue to attract high quality talent from the industry to bolster existing investment teams and to launch new product lines. We remain on track to deliver the cost savings announced in H1."
Man's next scheduled announcement to the market will be its full year results on 28 February 2013.
Conference call
A conference call for investors and analysts will be held at 08:00 UK time this morning.
Audio Details
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THIRD QUARTER FUM COMMENTARY
Guaranteed products
Guaranteed product funds under management remained broadly flat during the period. Net outflows of $0.3 billion comprised sales of $0.1 billion and redemptions of $0.4 billion, in line with prior periods. The impact of rebalancing increased FUM by $0.1 billion in the quarter with re-gears of $0.3 billion in July and $0.3 billion in August being partially offset by a de-gear in September of $0.5 billion. The 1 October de-gear was $30 million.
Re-gear / (de-gear) | AHL performance in rebalance period | |
1 July 2012 | $0.3 bn | +3.24% |
1 August 2012 | $0.3 bn | +2.77% |
1 September 2012 | $(0.5) bn | -3.08% |
Open ended alternatives
Funds under management in open ended alternative strategies reduced by $0.5 billion in the period to $22.0 billion.
The $0.5 billion reduction in open ended AHL was driven by net outflows of $0.7 billion partially offset by positive investment movement and FX. While sales remained muted, redemptions reduced to $0.9 billion in the quarter; in particular, the pace of redemptions from Nomura Global Trend slowed down compared to the first half of the year. Man AHL Diversified plc, which is valued on a weekly basis, was down 0.6% for the period from 26 June to 24 September. Performance of funds valued on a calendar month basis was up around 2.7% for the quarter. As at 30 September 2012, AHL was 14.0% below peak on a weighted average basis.
Funds under management in GLG alternatives remained flat, with net outflows of $0.4 billion being offset by performance, FX and other. Positive flows into European long short, macro, Euro distressed and global convertibles strategies were offset by outflows across other strategies. Investment performance across the GLG alternatives range was net positive in Q3 with the strongest performance coming from various of the credit and convertibles strategies. 79% of performance fee eligible GLG FUM was at or within 5% of high water mark at end September 2012. GLG made a significant hire to expand its alternative fixed-income offering in September, with the addition of Sudi Mariappa, formerly of Pimco.
Institutional fund of funds and other
Funds under management in this category increased to $19.8 billion driven by the acquisition of FRM which completed on 17 July. Acquired funds under management were $8.3 billion.
Sales for the combined business continue to be driven by institutional managed account based mandates, whilst redemptions from primarily European investors out of legacy Man Multi-Manager fund of hedge funds were higher than the previous quarter. Redemptions from acquired FRM funds were $0.2 billion in the quarter and FUM levels for this business are currently ahead of expectations. Notified quarterly redemptions for October are $0.6 billion.
Long only
Long only funds under management reduced by $0.1 billion in the quarter with $0.3 billion of net outflows largely offset by FX movements. Redemptions totalling $0.8 billion have been notified for October.
FUNDS UNDER MANAGEMENT ANALYSIS
3 months to 30 September 2012
Guaranteed | Open ended | Institutional FoF and other | Alternatives total | Long only | Total | ||
$bn | Man $bn | GLG $bn | $bn | $bn | $bn | $bn | |
FUM at 30 June 2012 | 7.1 | 11.7 | 10.8 | 11.8 | 41.4 | 11.3 | 52.7 |
Acquisition | - | - | - | 8.3 | 8.3 | - | 8.3 |
Sales | 0.1 | 0.2 | 1.1 | 0.8 | 2.2 | 0.8 | 3.0 |
Redemptions | (0.4) | (0.9) | (1.5) | (1.3) | (4.1) | (1.1) | (5.2) |
Net inflows/(outflows) | (0.3) | (0.7) | (0.4) | (0.5) | (1.9) | (0.3) | (2.2) |
Investment movement | 0.1 | 0.2 | 0.2 | - | 0.5 | - | 0.5 |
FX | - | 0.1 | 0.1 | 0.2 | 0.4 | 0.2 | 0.6 |
Other | 0.1 | (0.1) | 0.1 | - | 0.1 | - | 0.1 |
Closing FUM | 7.0 | 11.2 | 10.8 | 19.8 | 48.8 | 11.2 | 60.0 |
FUM by manager
$bn | 30 September 2012 | 30 June 2012 | 31 March 2012 |
AHL | 16.3 | 16.7 | 19.5 |
GLG Alternatives | 15.1 | 15.1 | 16.1 |
- Equity | |||
- Europe | 2.9 | 2.9 | 3.1 |
- North America | 1.9 | 2.0 | 2.2 |
- UK | 0.7 | 0.8 | 1.0 |
- Other equity alternatives | 0.3 | 0.3 | 0.6 |
- Credit and Convertibles | |||
- Convertibles | 2.4 | 2.1 | 2.0 |
- Market Neutral | 0.8 | 0.8 | 0.8 |
- Ore Hill | 0.9 | 0.8 | 0.9 |
- Pemba | 2.4 | 2.4 | 2.6 |
- Emerging markets | 1.5 | 1.8 | 2.1 |
- Macro and special situations | 1.3 | 1.2 | 0.8 |
Long only | 11.2 | 11.3 | 12.5 |
- Japan | 5.6 | 6.0 | 6.8 |
- Other | 5.6 | 5.3 | 5.7 |
FRM | 17.4 | 9.6 | 10.9 |
Total | 60.0 | 52.7 | 59.0 |
Investment performance
Total return | Annualised return | |||
3 months to 30 Sept 2012 | 9 months to 30 Sept 2012 | 3 years to30 Sept 2012 | 5 years to30 Sept 2012 | |
AHL | ||||
Man AHL Diversified plc1 | -0.6% | -0.3% | 0.2% | 5.2% |
AHL Alpha plc2 | -0.4% | -0.1% | 1.5% | 4.4% |
Man AHL Diversity3 | 2.0% | -1.5% | n/a | n/a |
Man AHL Trend4 | 2.4% | -2.5% | n/a | n/a |
GLG ALTERNATIVES | ||||
Equity | ||||
Europe | ||||
GLG European Long Short Fund5 | 0.5%* | 5.9%* | 6.8%* | 5.0%* |
GLG European Equity Alternative UCITS Fund6 | 0.8% | 6.2% | n/a | n/a |
GLG European Alpha Alternative UCITS Fund7 | 2.5% | 1.0% | 2.3% | n/a |
North America | ||||
GLG North American Opportunity Fund8 | 0.8%* | 3.1%* | 2.6%* | 2.9%* |
GLG North American Equity Alternative UCITS fund9 | 0.2% | -0.1% | n/a | n/a |
UK | ||||
GLG Alpha Select Fund10 | -0.7%* | -3.8%* | -1.7%* | 5.9%* |
GLG Alpha Select UCITS Fund11 | -1.0% | -4.1% | n/a | n/a |
Other equity alternatives | ||||
GLG Global Opportunity Fund12 | 0.3%* | 1.9%* | 0.6%* | -0.5%* |
Credit and convertibles | ||||
Convertibles | ||||
GLG Global Convertible Fund13 | 3.5% | 8.2% | 3.0% | 1.6% |
GLG Global Convertible UCITS Fund14 | 3.2% | 9.8% | 4.2% | 1.0% |
Market Neutral | ||||
GLG Market Neutral Fund15 | 3.3%* | 13.3%* | 18.6%* | 6.4%* |
GLG European Distressed Fund16 | 2.0%* | 13.8%* | 19.7%* | n/a |
Ore Hill | ||||
GLG Ore Hill Fund17 | 5.6% | 11.8% | 17.1% | 2.0% |
Emerging markets | ||||
GLG Emerging Markets Fund18 | 3.1%* | 5.1%* | 2.7%* | 0.0%* |
GLG Emerging Markets UCITS Fund19 | 2.2% | 4.5% | n/a | n/a |
Macro and special situations | ||||
GLG Atlas Macro Fund20 | -1.0%* | -0.9%* | 8.7%* | n/a |
GLG Atlas Macro Alternative UCITS Fund21 | -1.0% | -0.1% | n/a | n/a |
GLG LONG ONLY | ||||
GLG Japan Core Alpha Equity Fund22 | -6.1% | -3.4% | -8.1% | -9.2% |
GLG Global Equity UCITS Fund23 | 4.5% | 9.0% | n/a | n/a |
Investment performance continued
Total return | Annualised return | |||
3 months to 30 Sept 2012 | 9 months to 30 Sept 2012 | 3 years to30 Sept 2012 | 5 years to30 Sept 2012 | |
FRM | ||||
AA Diversified24 | 0.8% | 0.5% | 1.6% | -1.6% |
FRM Diversified II25 | 1.1% | 1.2% | 3.0% | -1.3% |
Man Dynamic Selection26 | 0.9% | 2.0% | 0.4% | 0.7% |
Man GLG Multi-Strategy Fund27 | -0.1%* | 2.5%* | 4.1%* | -1.2%* |
MAN SYSTEMATIC STRATEGIES | ||||
TailProtect Limited Class B | -3.7% | -11.4% | n/a | n/a |
Indices | ||||
World stocks28 | 5.6% | 12.5% | 7.0% | -2.4% |
World bonds29 | 1.4% | 3.6% | 4.1% | 5.0% |
Corporate bonds30 | 3.8% | 10.1% | 12.6% | 10.8% |
Hedge fund indices | ||||
HFRI Fund Weighted Composite Index31 | 2.9% | 4.8% | 3.9% | 1.5% |
HFRI Fund of Funds Composite Index31 | 2.4% | 3.4% | 1.5% | -1.6% |
HFRX Global Hedge Fund Index | 1.4% | 2.7% | 0.2% | -3.0% |
Style indices | ||||
Barclay BTOP 50 Index32 | 0.0%* | -0.2%* | -0.2%* | 2.5%* |
HFRI Equity Hedge (Total) Index31 | 3.5% | 5.5% | 3.2% | -0.4% |
HFRX Equity Hedge Index | 2.2% | 3.4% | -2.6% | -5.4% |
HFRI Event Driven (Total) Index31 | 2.8% | 5.1% | 5.8% | 2.0% |
HFRX Event Driven Index | 1.9% | 4.9% | 1.2% | -2.0% |
HFRI Macro (Total) Index31 | 1.6% | 0.7% | 1.5% | 3.3% |
HFRX Macro/CTA Index | 0.9% | -0.9% | -3.0% | -1.1% |
HFRI Relative Value (Total) Index31 | 3.5% | 7.9% | 7.8% | 4.9% |
HFRX Relative Value Arbitrage Index | 0.7% | 2.8% | 4.1% | -1.5% |
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.
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.
7) Represented by GLG European Alpha Alternative IN EUR.
8) Represented by GLG North American Opportunity Fund - Class A Restricted to Unrestricted (29/06/2007) - USD.
9) Represented by GLG North American Equity Alternative IN USD.
10) Represented by GLG Alpha Select Fund - Class C - EUR.
11) Represented by GLG Alpha Select Alternative IN H EUR.
12) Represented by GLG Global Opportunity Fund - Class Z - USD.
13) Represented by GLG Global Convertible Fund - Class A - USD.
14) Represented by GLG Global Convertible UCITS Funds Class IM USD.
15) Represented by GLG Market Neutral Fund - Class Z Restricted to Unrestricted (31/08/2007) - USD.
16) Represented by GLG European Distressed Fund - Class A - USD.
17) Represented by Ore Hill International Fund II Ltd.
18) Represented by GLG Emerging Markets Fund - Class A Restricted to Unrestricted (31/08/2007) - USD.
19) Represented by GLG EM Diversified Alternative IN EUR.
20) Represented by GLG Atlas Macro Fund - Class A - USD.
21) Represented by GLG Atlas Macro Alternative IN H GBP.
22) Represented by GLG Japan CoreAlpha Equity Fund - Class C to Class I JPY (28/01/2010).
23) Represented by GLG Global Equity Fund Class I USD.
24) Represented by Absolute Alpha Fund PCC Ltd Diversified - USD.
25) To highlight the performance and risks associated with FRM Diversified II Fund SPC - Class A USD ('the fund') 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.
26) Represented by Man Dynamic Selection USD I.
27) Represented by Man GLG Multi-Strategy Fund - Class A - USD Shares.
28) Represented by MSCI World Net Total Return Index hedged to USD.
29) Represented by Citigroup World Government Bond Index hedged to USD (total return).
30) Represented by Citigroup High Grade Corp Bond TR.
31) HFRI index performance over the past 4 months is subject to change.
32) The historic Barcly BTOP 50 Index data is subject to change.
Please note that the dates in brackets represent the date of the join in the linked track records.
*Estimated.
Enquiries
Fiona Smart
Head of Investor Relations
+44 20 7144 2030
Fiona.smart@man.com
David Waller
Head of Communications
+44 20 7144 2121
david.waller@man.com
Maitland PR
George Trefgarne
+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 30 September 2012, Man managed $60.0 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 £1.7 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.
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