Sun, May 31, 2015
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. Opalesque Exclusive: New TMT hedge fund adopts the long-term approach[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Adam Parker founded Center Lake Capital LLC in New York in November 2014. Before that, he was portfolio manager at Point State Capital (the successor fund to Dr

  2. Investing - Hedge funds buy swathes of foreclosed subprimes, force up rents, float rent-bonds, Hedge funds buy Actavis, Valeant. ETFs join the party, The most loved biotechs of big hedge funds, Stocks to buy ... according to hedge funds, Atlantic City bond offering attracts hedge funds as buyers, Okumus Fund Management discloses huge new Ascent Capital Group stake[more]

    Hedge funds buy swathes of foreclosed subprimes, force up rents, float rent-bonds From Boingboing.com: When a giant hedge fund is bidding on all the foreclosed houses in a poor neighborhood, living humans don't stand a chance -- but that's OK, because rapacious investors make great landl

  3. Institutions - Institutional investors turn to real estate, planes, Assets at Boston’s five biggest family nonprofits rise to $3.5bn[more]

    Institutional investors turn to real estate, planes From Joins.com: The National Pension Service and domestic emerging market specialists who did not know where to invest in a low interest rate environment are turning to other investments like the blue-chip real estate market abroad.

  4. Regulatory - Hedge funds face tax as Iceland poised to end capital controls, Comment: Why alternatives need more transparency, not enforcement[more]

    Hedge funds face tax as Iceland poised to end capital controls From Bloomberg.com: Hedge funds and other investors who bought claims against Iceland’s failed banks face a tax that targets the lenders’ estates as the government prepares to unveil its plan for exiting capital controls in t

  5. Investing - Nelson Peltz’s Trian Fund Management reduces position in Legg Mason, Biotech investors up big amid bubble talk, Hedge funds increase exposure in healthcare[more]

    Nelson Peltz’s Trian Fund Management reduces position in Legg Mason From Octafinance.com: Trian Fund Management has filled a SC 13D/A form regarding Legg Mason, Inc. Per Nelson Peltz’s Trian Fund Management’s filing, the filler reported decreased stake in the company by -11.05% to 11,03

 

banner