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Man Group reports asset increase to $59.5bn and positive fund performance year to date

Thursday, March 01, 2012
Opalesque Industry Update - Man Group today reported results for the nine months to 31 December 2011 and funds under management at end February 2012. Here is a summary of the results:

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

Corporate website: www.man.com

- FG

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