Tue, Sep 16, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Man Group's management step changes transformation as tough environment persists

Thursday, October 25, 2012
Beverly Chandler, Opalesque London: Man Group’s October presentation for investors reveals that the company continues to struggle to realign its business as the “tough performance environment persists.”

It summarises its latest position as:

  • Funds under management down 10% to $52.7 billion
  • Adjusted PBT of $121 million (H1 2011: $231 million)
  • Statutory loss before tax of $164 million (H1 2011: profit of $70 million)
  • $233 million impairment of Multi-Manager ($142 million) and GLG ($91 million) goodwill
  • Interim dividend of 9.5 cents per share, as announced in May
  • Proposal to create new holding company to access distributable reserves

“Today’s presentations…mark a step change in our business transformation” the company says, giving examples of management decisions that they had made which have come out well, and those that haven’t. Planning assumptions that went well included assuming demand for regulated alternatives; a declining demand for guaranteed funds and the need to shape the business to match evolving investor demands.

Things that haven’t gone so well include expecting AHL performance to perform in line with its track record, instead the firm says: “Politically driven markets have negatively impacted absolute returns for trend followers”. Another expectation was that Man’s guaranteed product inventory would erode gradually, in line with its maturity profile whereas, in fact, the firm says negative AHL performance and c$6 billion of related de-gear since 2011 has significantly accelerated this process.

In a range of actions the firm is to align costs to reshaped business; integrate FRM; optimise AHL performance, which is running at 0.3% to June 2012; organically build-out GLG; market strong performance and thematic products and build their talent base.

Man compares the volatility of its flagship AHL funds, both Alpha and Diversified with its CTA peers, including David Harding (the ‘H’ of AHL)’s Winton Capital’s Diversified Trading Program. AHL Alpha’s annualised volatility over the past two years has been 10.5% while Winton’s Diversified Trading Program has had annualised volatility over the past two years of 8.0%.

Man’s AHL Diversified has had annualised volatility over the past two years of 14.0% while Aspect Capital’s Aspect Diversified Program has had annualised volatility over the past two years of 13.2%. BlueCrest Capital Management’ BlueTrend Fund Limited has had annualised volatility over the past two years of 12.7%.

The firm is also expecting to save $100m by 2013 by reducing the layers of management and complexity of group functions; eliminating unprofitable products and structures and being ‘disciplined’ on general day to day expenses and practices.

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - Big hedge funds show interest in Alibaba, Maglan joins other hedge funds in rush to Argentinian assets[more]

    Big hedge funds show interest in Alibaba From Hereisthecity.com: …Three other major hedge fund investors who have shown interest in the IPO are Dan Loeb of Third Point, David Tepper of Appaloosa Management and Dan Benton of Andor Capital Management. All three were among the roughly 800 p

  2. Investors looking at other sources for hedge fund-like returns[more]

    Komfie Manalo, Opalesque Asia: Investors who are always on the lookout for higher gains are looking at alternative sources of income, particularly exchange-traded fund industry that generates hedge fund-like returns, according to

  3. …And Finally – Immature[more]

    From Newsoftheweird.com: Princeton University professor John Mulvey, 67 (who teaches financial engineering applications), was charged in July with stealing 21 yard signs around the town of Princeton -- signs for a computer repair business owned by a man with whom he was feuding. Nathan McCoy,

  4. Investors move capital out of Scotland ahead of referendum[more]

    Benedicte Gravrand, Opalesque Geneva: Ahead of Scotland’s independence referendum on September 18, asset managers, investors and pension savers are moving billions of pounds out of the country,

  5. Indices - Greenwich Global Hedge Fund Index up 1.57% in August (+4.22% YTD), Eurekahedge Hedge Fund Index rebounds in August gaining 1.36% (4.22%), Lyxor Hedge Fund Index was up 0.9% in August (YTD +1.7%)[more]

    Greenwich Global Hedge Fund Index up 1.57% in August (+4.22% YTD) The Greenwich Global Hedge Fund Index ended the month of August up +1.57%. Equity markets were up in August with the MSCI World Index up +2.00%. This was primarily driven by the performance of the S&P 500 which was up +4.