Man Group Clients Pull Funds, Shrinking Assets to $52 Billion
Man Group Plc (EMG), the world’s largest publicly traded hedge-fund manager, said clients pulled money from the firm in the first half, reducing assets under management by 8.8 percent to $52 billion.
Investors redeemed $11.5 billion from Man Group’s funds, offsetting new sales of $6.5 billion, the London-based company said in a statement today. Barclays Plc analyst Daniel Garrod estimated that assets would fall to $51.6 billion.
Man Group shares have plunged 38 percent from their 2013 high reached in May, putting renewed pressure on Chief Executive Officer Emmanuel Roman to stem client outflows and boost investment returns. AHL Diversified, the firm’s biggest hedge fund, which holds $16.3 billion of assets, posted losses in the second quarter as bonds and currencies fell amid signs the U.S. Federal Reserve may scale back asset purchases.
“Trading conditions remain tough and we do not see any improvement in the near-term outlook,” Roman said in the statement. “Investor appetite remained muted as renewed market volatility tempered investors’ willingness to put their money to work.”
AHL, which relies on computer algorithms to spot profitable trends in interest rates, bonds, stocks and currencies, has fallen 4.3 percent this year through July. After posting gains through April, the fund started losing money when Fed Chairman Ben S. Bernanke said the central bank may begin curtailing fixed-income purchases. AHL declined 2.1 percent in 2012 and 5.5 percent in 2011, according to data compiled by Bloomberg.
AHL was “hit badly” by Bernanke’s comments on so-called tapering, Roman said on a conference call today.
Man Group’s asset decline stands in contrast to the broader hedge-fund industry, which has increased funds under management by 20 percent to $2.41 trillion since the end of 2011, according to Chicago-based Hedge Fund Research Inc. Man Group has been hurt by the fact that it has few investors in the U.S., which has accounted for about two-thirds of the flows into hedge funds in recent years, according to UBS AG analyst Arnaud Giblat.
Roman, 49, has responded to declining assets by reducing costs, restructuring management and buying back Man Group’s debt. A slide in Man Group’s share price over the past three years prompted the company to remove former CEO Peter Clarke and replace him in February with Roman, who had been chief operating officer. Roman joined Man Group in 2010 as part of the company’s $1.6 billion acquisition of GLG Partners Inc., a London-based hedge fund and investment firm.
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