Thu, Mar 23, 2017
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. Hedge fund liquidations in 2016 surpass 2009 levels, new launches decline[more]

    Benedicte Gravrand, Opalesque Geneva: Even as the hedge fund industry's total assets exceeded the $3tln milestone last year, hedge fund liquidations increased. So much so that 2016 had the highest number of liquidations since 2008, claims the latest HFR Market Microstructure Report, re

  2. Hedge funds find no joy in macro as returns lag Trump rally[more]

    From Gulfnews.com: In 2017, macro hedge funds were expected to shine. So far? Not so much. It's been a far from impressive first two months for funds that trade around macroeconomic events. Discretionary funds rose just 0.3 per cent through February, according to Hedge Fund Research Inc., while the

  3. Strategies - Billionaire investor Marc Lasry shares how he's playing markets right now, Classic models are failing FX hedge funds desperate for return[more]

    Billionaire investor Marc Lasry shares how he's playing markets right now From CNBC.com: Buy on the prospect of deregulation. Sell on the enactment of deregulation. That's the strategy that billionaire investor Marc Lasry is implementing, according to an interview with CNBC in Las Vegas

  4. Opalesque Exclusive: Aberdeen makes the case for the lower mid-market[more]

    Bailey McCann, Opalesque New York: Aberdeen Asset Management has released a new paper focused on lower mid-market private equity. According to the paper, this segment of the private equity market is gaining popularity with private equity investors that are looking for multiple expansion and less

  5. Hedge funds await outcome of French elections, feel pinch on lower oil prices & weak dollar[more]

    Komfie Manalo, Opalesque Asia: Hedge funds felt the pinch of lower oil prices and weak U.S. dollar as the Lyxor Hedge Fund Index was marginally down as of the week ending 14 March, Lyxor Asset Management said in its Weekly Briefing. The Lyxor He