Last checked at 17 Apr 2020 07:00
Press Release
17 April 2020
RESILIENT IN UNPRECEDENTED CIRCUMSTANCES
TRADING STATEMENT FOR THE QUARTER ENDED 31 MARCH 2020
Key points
· Funds under management of $104.2 billion at 31 March 2020 (31 December 2019: $117.7 billion)
o Negative investment movement of $10.7 billion as COVID-19 impacted global markets
o Net inflows of $0.5 billion
o Negative FX and other movements of $3.3 billion
· Asset weighted outperformance versus peers1 across our strategies of +2.5%
· Robust and highly liquid balance sheet
· The 2019 final dividend and current share repurchase programme proceeding as planned
Luke Ellis, Chief Executive Officer of Man Group, said:
"The health and wellbeing of our colleagues and the performance of our clients' assets are our foremost priorities in what has been an unprecedented and testing period for everyone. I am pleased to report that all parts of the firm have pulled together and have done an exceptional job, particularly our technology teams whose outstanding efforts meant we have been able to keep operating as usual despite everyone working remotely.
"Given the extreme volatility in all markets, we are pleased to have outperformed peers on an asset weighted basis across the firm by 2.5% in the first quarter, and to see our absolute return strategies make gains for clients despite the large sell off seen. We saw net inflows in the quarter and continue to win mandates but we have seen a recent increase in redemptions as clients adjust their allocations in response to the market moves and heightened economic uncertainty.
"Our balance sheet and liquidity position remain robust, and we will proceed with our dividend as announced and continue with our share buyback as planned."
1 The asset weighted performance relative to peers for the period stated is calculated using the daily asset weighted average performance relative to peers for all strategies where we have identified and can access an appropriate peer composite. The performance of our strategies is measured net of management fees charged and, as applicable, performance fees charged. As at 31 March 2020, it covers 88% of the FUM of the Group and excludes infrastructure mandates, Global Private Markets and collateralised loan obligations.
Operational response to COVID-19
Our primary focus is the safety and well-being of our staff. In January we established a dedicated COVID-19 Response Team whose primary role was to implement our pandemic response plans. We implemented a range of protective measures as the advice from medical experts and governments evolved. We conducted extensive tests to ensure that our systems and processes could continue to operate with large numbers of staff working remotely. We also rolled out additional hardware and software tools to improve connectivity and productivity. We are now working from home, and continue to function smoothly despite the increased volatility and volumes seen in markets. This is a testament to the efforts of all our staff, and to our technology infrastructure teams in particular. We continue to monitor the situation as it evolves globally and will take further action as we deem appropriate and as informed by government and health organisations.
Balance sheet and liquidity position
We continue to have a robust balance sheet and liquidity position. As at 31 March 2020 we had $570 million of net financial assets1 including $253 million of cash. The reduction in our net financial assets1 since year end primarily reflects normal seasonal working capital movements. This balance sheet and liquidity position reflects actions we took in 2019. We repaid our financial indebtedness by calling our Tier 2 notes and entered into a new $500 million revolving credit facility which matures in 2024.
Given the overall strength of our balance sheet and liquidity position, we are proceeding with our 2019 final dividend and share repurchase programme (announced in October 2019) as planned.
1 Net financial assets is considered a proxy for the Group's capital, and is equal to the Group's cash and seed book less borrowings, contingent consideration payable and payables under repo arrangements.
FIRST QUARTER FUM COMMENTARY
In the three months to 31 March 2020, as the economic repercussions of COVID-19 impacted financial markets, with MSCI World Index decreasing by 21%. Our FUM decreased by 11% in the first quarter to $104.2 billion. This was driven by negative investment movement of $10.7 billion as our long-only strategies declined with equity markets and $2.7 billion of FX translation as the US dollar strengthened against a range of currencies since the year end. This was marginally offset by our absolute return strategies which had positive investment movement.
At 31 March 2020 $31.4 billion of performance fee eligible FUM was above, at or within 5% of high water mark, compared to $31.6 billion as at 31 December 2019.
FUM movements for the three months to 31 March 2020
$bn | FUM at 31 December 2019 | Net inflows/ (outflows) | Investment movement | FX & other | FUM at 31 March 2020 |
Alternative | 71.5 | 1.6 | (0.7) | (2.4) | 70.0 |
Absolute return | 30.5 | 0.4 | 0.1 | (0.7) | 30.3 |
Total return | 27.0 | 1.6 | (0.4) | (1.5) | 26.7 |
Multi-manager solutions | 14.0 | (0.4) | (0.4) | (0.2) | 13.0 |
Long-only | 46.2 | (1.1) | (10.0) | (0.9) | 34.2 |
Systematic | 27.5 | (0.8) | (6.1) | (0.2) | 20.4 |
Discretionary | 18.7 | (0.3) | (3.9) | (0.7) | 13.8 |
Total | 117.7 | 0.5 | (10.7) | (3.3) | 104.2 |
ALTERNATIVE
Absolute return
Absolute return FUM decreased to $30.3 billion in the first quarter. Net inflows of $0.4 billion were driven by subscriptions into Man AHL's multi-strategy vehicles. This was partially offset by net outflows from Man GLG's Equity long-short strategy. Positive investment movement of $0.1 billion benefited from positive performance by AHL Diversified (+8.6%) and AHL Alpha (+5.3%) and was partly offset by negative performance by AHL Dimension and GLG Global Credit Multi Strategy. Negative FX and other movements of $0.7 billion resulted from a stronger US dollar, in particular against the Australian dollar, which was partly offset by increases in leverage.
Total return
Total return FUM decreased to $26.7 billion in the first quarter. Net inflows of $1.6 billion were driven by AHL's TargetRisk strategy. Negative performance by AHL TargetRisk and Man Alternative Risk Premia contributed to the negative investment movement of $0.4 billion. This was partly offset by positive performance from GLG Global Emerging Markets Debt Total Return (+10.1%) which benefited from its bearish positioning. FX and other movements of negative $1.5 billion resulted from a stronger US dollar, in particular against sterling, and de-gearing of our risk premia strategies.
Multi-manager solutions
Multi-manager solutions FUM decreased to $13.0 billion in the first quarter. Net outflows were $0.4 billion and negative investment performance was $0.4 billion. Negative FX and other movements of $0.2 billion resulted from a stronger US dollar, in particular against the Australian dollar.
LONG-ONLY
As the impact of COVID-19 was felt across global financial markets our long-only strategies suffered both from net outflows and negative investment movements in the first quarter.
Systematic
Systematic long-only FUM decreased to $20.4 billion in the first quarter as the sharp market falls led to $6.1 billion of negative investment movement equivalent to a 22% decline. Net outflows of $0.8 billion were primarily driven by redemptions from Global core and European core strategies.
Discretionary
Discretionary long-only FUM decreased to $13.8 billion in the first quarter as the sharp markets falls led to $3.9 billion of negative investment movement equivalent to a 21% decline. The net outflows of $0.3 billion were primarily from Japan CoreAlpha. Negative FX and other movements of $0.7 billion resulted from a stronger US dollar, in particular against sterling.
FUM by product category
$bn | 31-Mar-19 | 30-Jun-19 | 30-Sep-19 | 31-Dec-19 | 31-Mar-20 |
Absolute return | 28.7 | 29.9 | 30.3 | 30.5 | 30.3 |
AHL Alpha | 5.0 | 5.5 | 6.0 | 6.0 | 6.5 |
Man Institutional Solutions1 | 3.5 | 3.9 | 4.2 | 4.4 | 5.8 |
AHL Dimension | 5.9 | 6.1 | 6.3 | 6.3 | 5.6 |
GLG Equity absolute return | 5.4 | 5.6 | 5.2 | 5.2 | 4.6 |
AHL Evolution | 3.6 | 3.8 | 3.8 | 4.1 | 3.8 |
AHL Diversified | 1.6 | 1.6 | 1.7 | 1.5 | 1.5 |
AHL other | 1.8 | 1.8 | 1.7 | 1.7 | 1.4 |
Numeric absolute return | 1.2 | 1.0 | 0.9 | 0.8 | 0.7 |
GLG Credit absolute return | 0.7 | 0.6 | 0.5 | 0.5 | 0.4 |
Total return | 25.0 | 25.5 | 25.9 | 27.0 | 26.7 |
Diversified risk premia | 13.6 | 14.2 | 15.5 | 17.4 | 16.5 |
CLOs and other GLG total return | 4.4 | 4.5 | 4.3 | 4.3 | 4.7 |
EM total return | 4.6 | 4.3 | 3.7 | 2.8 | 3.0 |
GPM | 2.4 | 2.5 | 2.4 | 2.5 | 2.5 |
Multi-manager solutions | 13.4 | 13.5 | 13.9 | 14.0 | 13.0 |
Infrastructure & direct access | 5.8 | 6.4 | 6.7 | 6.9 | 6.6 |
Segregated | 6.2 | 5.8 | 6.0 | 5.9 | 5.6 |
Diversified and thematic FoHF | 1.4 | 1.3 | 1.2 | 1.2 | 0.8 |
Systematic long only | 26.8 | 27.0 | 25.6 | 27.5 | 20.4 |
Global | 8.5 | 8.7 | 9.5 | 9.2 | 7.2 |
International | 7.7 | 8.0 | 7.7 | 9.1 | 6.6 |
Emerging markets | 7.1 | 6.9 | 6.1 | 6.8 | 5.2 |
US | 3.5 | 3.4 | 2.3 | 2.4 | 1.4 |
Discretionary long only | 18.3 | 18.4 | 17.0 | 18.7 | 13.8 |
Europe equity | 5.0 | 5.7 | 5.6 | 6.6 | 4.8 |
Japan equity | 7.5 | 7.0 | 6.3 | 6.6 | 4.2 |
Credit & convertibles | 2.2 | 2.4 | 2.3 | 2.6 | 2.3 |
EM Fixed income | 2.1 | 2.2 | 2.1 | 2.0 | 1.7 |
Other equity | 0.7 | 0.9 | 0.5 | 0.6 | 0.5 |
Multi Asset | 0.8 | 0.2 | 0.2 | 0.3 | 0.3 |
Guaranteed | 0.1 | 0.1 | 0.0 | 0.0 | 0.0 |
Total | 112.3 | 114.4 | 112.7 | 117.7 | 104.2 |
1 Man Institutional Solutions includes AHL Institutional Solutions, GLG and Numeric strategies
FUM by investment engine
$bn | 31-Mar-19 | 30-Jun-19 | 30-Sep-19 | 31-Dec-19 | 31-Mar-20 |
AHL | 28.0 | 29.9 | 31.6 | 33.7 | 35.1 |
Diversified risk premia | 6.8 | 7.2 | 8.0 | 9.8 | 10.7 |
Alpha | 5.0 | 5.5 | 6.0 | 6.0 | 6.5 |
Institutional Solutions1 | 3.2 | 3.8 | 4.1 | 4.3 | 5.6 |
Dimension | 5.9 | 6.1 | 6.3 | 6.3 | 5.6 |
Evolution | 3.6 | 3.8 | 3.8 | 4.1 | 3.8 |
Diversified (inc. Guaranteed) | 1.7 | 1.7 | 1.7 | 1.5 | 1.5 |
Other | 1.8 | 1.8 | 1.7 | 1.7 | 1.4 |
Numeric | 34.8 | 35.0 | 34.0 | 35.9 | 26.9 |
Alternatives | 8.0 | 8.0 | 8.4 | 8.4 | 6.5 |
Diversified risk premia | 6.8 | 7.0 | 7.5 | 7.6 | 5.8 |
Numeric absolute return | 1.2 | 1.0 | 0.9 | 0.8 | 0.7 |
Long only | 26.8 | 27.0 | 25.6 | 27.5 | 20.4 |
Global | 8.5 | 8.7 | 9.5 | 9.2 | 7.2 |
International | 7.7 | 8.0 | 7.7 | 9.1 | 6.6 |
Emerging markets | 7.1 | 6.9 | 6.1 | 6.8 | 5.2 |
US | 3.5 | 3.4 | 2.3 | 2.4 | 1.4 |
GLG | 33.7 | 33.5 | 30.8 | 31.6 | 26.7 |
Alternatives | 15.4 | 15.1 | 13.8 | 12.9 | 12.9 |
Equity absolute return2 | 5.7 | 5.7 | 5.3 | 5.3 | 4.8 |
CLOs and other GLG total return | 4.4 | 4.5 | 4.3 | 4.3 | 4.7 |
EM total return | 4.6 | 4.3 | 3.7 | 2.8 | 3.0 |
Credit absolute return2 | 0.7 | 0.6 | 0.5 | 0.5 | 0.4 |
Long only | 18.3 | 18.4 | 17.0 | 18.7 | 13.8 |
Europe equity | 5.0 | 5.7 | 5.6 | 6.6 | 4.8 |
Japan equity | 7.5 | 7.0 | 6.3 | 6.6 | 4.2 |
Credit & convertibles | 2.2 | 2.4 | 2.3 | 2.6 | 2.3 |
EM Fixed income | 2.1 | 2.2 | 2.1 | 2.0 | 1.7 |
Other equity | 0.7 | 0.9 | 0.5 | 0.6 | 0.5 |
Multi Asset | 0.8 | 0.2 | 0.2 | 0.3 | 0.3 |
FRM | 13.4 | 13.5 | 13.9 | 14.0 | 13.0 |
Infrastructure & direct access | 5.8 | 6.4 | 6.7 | 6.9 | 6.6 |
Segregated | 6.2 | 5.8 | 6.0 | 5.9 | 5.6 |
Diversified and thematic FoHF | 1.4 | 1.3 | 1.2 | 1.2 | 0.8 |
GPM | 2.4 | 2.5 | 2.4 | 2.5 | 2.5 |
Total | 112.3 | 114.4 | 112.7 | 117.7 | 104.2 |
1 AHL Institutional Solutions invests into a range of Man AHL strategies including Dimension, AHL Alpha and AHL Evolution
2 GLG Equity absolute return and GLG Credit absolute return include allocations from Multi-strategy included in Man Institutional Solutions in the FUM by product category table
Investment Performance
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| Total Return(net of fees) | Annualised Return(net of fees) | |||
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| 3 months to31 March 2020 | 12 months to31 March 2020 | 3 years to31 March 2020 | 5 years to 31 March 2020 | Since inception to 31 March 2020 |
Absolute return |
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AHL Dimension | 1 | -4.4% | 0.3% | 3.2% | 2.4% | 4.9% |
AHL Alpha | 2 | 5.3% | 12.3% | 6.7% | 2.2% | 10.9% |
AHL Evolution | 3 | 0.0% | 9.2% | 9.4% | 6.1% | 13.0% |
AHL Diversified | 4 | 8.6% | 18.1% | 7.2% | 0.1% | 11.2% |
Man Numeric Market Neutral Alternative | 5 | -4.3% | -5.7% | -7.0% | -2.8% | 2.4% |
GLG European Long Short | 6 | -2.5%* | -2.2%* | -1.0%* | -0.4%* | 6.2%* |
Man GLG Global Credit Multi Strategy | 7 | -8.3%* | -4.5%* | 2.1%* | 5.2%* | 11.4%* |
Total return |
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Man Alternative Risk Premia SP | 8 | -5.0% | -3.3% | 1.7% | n/a | 3.1% |
Man GLG Global EM Debt Total Return | 9 | 10.1% | 8.9% | 2.3% | n/a | 4.0% |
Man AHL TargetRisk | 10 | -4.9% | 9.0% | 10.6% | 7.7% | 9.3% |
Multi-manager solutions |
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FRM Diversified II | 11 | -8.0%* | -5.6%* | -1.4%* | -1.7%* | 3.5%* |
Systematic long only |
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Numeric Global Core | 12 | -22.7% | -14.4% | -1.8% | 1.7% | 6.0% |
Relative Return |
| -1.6% | -4.0% | -3.7% | -1.5% | 0.3% |
Numeric Europe Core (EUR) | 13 | -23.8% | -17.3% | -4.3% | -0.9% | 7.1% |
Relative Return |
| -1.2% | -3.8% | -1.1% | 0.8% | 2.2% |
Numeric Emerging Markets Core | 14 | -22.9% | -16.4% | -2.4% | 1.3% | 1.8% |
Relative Return |
| 0.7% | 1.3% | -0.8% | 1.6% | 1.9% |
Discretionary long only |
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Man GLG Japan Core Alpha Equity | 15 | -27.9% | -25.6% | -8.4% | -4.1% | 1.3% |
Relative Return |
| -10.4% | -16.1% | -8.3% | -4.4% | 0.7% |
Man GLG Continental European Growth | 16 | -9.8% | 6.9% | 5.9% | 11.3% | 8.9% |
Relative Return |
| 7.7% | 14.9% | 6.4% | 7.5% | 4.2% |
Man GLG Undervalued Assets | 17 | -34.5% | -29.6% | -6.0% | -0.4% | 2.0% |
Relative Return |
| -9.3% | -11.2% | -1.7% | -1.0% | 0.4% |
Indices |
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HFRX Global Hedge Fund Index | 18 | -6.9% | -1.4% | -0.5% | -0.6% |
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HFRI Fund of Funds Conservative Index | 18 | -4.9% | -2.0% | 1.0% | 0.9% |
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Barclay BTOP 50 Index | 19 | -2.3% | 2.5% | 0.1% | -2.3% |
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HFRI Equity Hedge (Total) Index | 18 | -12.9% | -8.0% | 0.1% | 1.3% |
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HFRX EH: Equity Market Neutral Index | 18 | -7.8% | -9.0% | -4.2% | -2.6% |
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Enquiries
Alex Dee
Head of Investor Relations
+44 20 7144 1370
Georgiana Brunner
Director of Communications
+44 20 7144 1000
media@man.com
Michael Turner
Finsbury
+44 20 7251 3801
mangroupUK@finsbury.com
About Man Group
Man Group is a global active investment management firm, which runs $104.2 billion* of client capital in liquid and private markets, managed by investment specialists based around the world. Headquartered in London, the firm has 15 international offices and operates across multiple jurisdictions. Our business has five specialist investment engines, which represent the range of our capabilities: Man AHL, Man Numeric, Man GLG, Man FRM and Man GPM.
These engines house numerous investment teams, working collaboratively within the framework of Man Group, with a high degree of investment autonomy. Each team benefits from the strength and resources of the firm's single operating platform, enabling their primary focus to be seeking to generate alpha for clients. The teams invest across a diverse range of strategies and asset classes with highly specialised approaches, with long only and alternative strategies run on a discretionary and quantitative basis in single and multi-manager formats. Our clients are at the heart of everything we do and we engage in close dialogue with our investors as strategic partners, to understand their particular needs and constraints. Man Group's investment teams are empowered and supported by our institutional infrastructure and technology, which aims to facilitate the efficient exposure to markets and effective collaboration across the organisation.
Through the Man Charitable Trust, Man Group is committed to promoting literacy and numeracy on a global scale, and to supporting charitable causes more broadly.
Man Group plc is listed on the London Stock Exchange under the ticker EMG.LN and is a constituent of the FTSE 250 Index. Further information can be found at www.man.com
For more information about Man Group's commitment to diversity and inclusion, please visit www.man.com/diversity
For more information about Man Group's approach to responsible investment, please visit www.man.com/responsible-investment
*As at 31 March 2020. All investment management and advisory services are offered through the investment "engines" of Man AHL, Man Numeric, Man GLG, Man FRM and Man Global Private Markets (GPM).
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 or to invest in any investment products mentioned herein.