Reuters - Hot Stocks

Man Group gets H1 performance fee boost, shares rise

* Pretax profit up 89 pct to $ 280 mln; dividend beats

* Heavy outflows from Japanese strategy, others better

* Shares up 4.7 pct

By Simon Jessop

LONDON, July 29 (Reuters) – British hedge fund manager Man Group posted forecast-beating first-half results on Wednesday, boosted by performance fee gains and a rise in profits that sent its shares higher.

After a quarter in which markets were roiled by political troubles in Greece and a sharp drop in the Chinese stock market, hitting performance of its AHL investment strategies, the firm said its other units, including GLG, had done well.

Adjusted pretax profit in the six months to the end of June was $ 280 million, up 89 percent from the prior year’s $ 148 million, boosted by investment gains, including at recent U.S. acquisition Numeric.

Analysts at Credit Suisse said management fees during the period were in line with their forecasts, but performance fees were 9 percent ahead of estimates at $ 172 million, up from $ 122 million in the year earlier period.

The strong performance helped underpin a forecast-beating rise in the firm’s interim dividend to 5.4 cents a share, above a consensus estimate for 5 cents a share.

While the company cautioned on the outlook given market volatility, analysts were upbeat on the results and shares in the firm were up 4.7 percent by 0752 GMT.

Strong performance across the group’s GLG, Numeric and fund of funds unit FRM meant “investors have a number of reasons to expect an acceleration in sales in the second half”, analysts at Goldman Sachs wrote in a note to clients.

Man said the value of its investments had risen by $ 3.8 billion over the period, up from the $ 700 million secured in the same period a year earlier, although adverse currency moves had cost it $ 1.4 billion, against a gain of $ 100 million a year ago.

Despite some heavy outflows from a high-performing Japanese equities strategy, flows into AHL and Numeric had held up, even if broader market sentiment had been tempered by the recent volatility, the company said.

“Flows for the half were skewed by $ 3.4 billion of net outflows from our Japan CoreAlpha strategy as some investors redeemed following a long period of strong absolute and relative performance,” said Chief Executive Manny Roman.

“We saw solid flows into our quant strategies including one large institutional mandate into AHL, however elsewhere investor appetite remained muted as renewed market volatility tempered investors’ willingness to put their money to work. (Reporting by Simon Jessop; Editing by Mark Potter)


Reuters: Hot Stocks

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