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U.K. hedge fund Man Group posts 5% rise in H1 AUM

Wednesday, July 31, 2019
Opalesque Industry Update - British hedge fund manager Man Group on Wednesday reported a 5% increase to its assets under management in the first half of 2019. Its funds under management (FUM)1 up 5% to $114.4 billion (31 December 2018: $108.5 billion).

Positive investment movement of $6.8 billion (H1 2018: negative $1.7 billion); Net outflows of $1.1 billion (H1 2018: net inflows $8.3 billion); Positive FX translation and other movements of $0.2 billion (H1 2018: negative $2.0 billion).

Adjusted profit before tax (PBT)1 up 3% to $157 million (H1 2018: $153 million): Adjusted management fee PBT1 of $83 million (H1 2018: $120 million) incorporating non-operating impacts of $21 million from the FX hedge and the adoption of IFRS 16, as well as no associate income following the sale of our stake in Nephila in 2018 and adjusted performance fee PBT1 of $74 million (H1 2018: $33 million).

Adjusted earnings per share (EPS)1 up 6% to 8.6 cents (H1 2018: 8.1 cents) reflecting: Higher performance fees and seed investment gains; Positive impact of a lower share count following share buybacks, and decline in the net management fee margin from 71 to 68 basis points reflecting strong growth in lower margin strategies.

Statutory PBT of $110 million (H1 2018: $90 million); Statutory EPS of 5.8 cents (H1 2018: 4.6 cents) with the increase reflecting the adjusted EPS growth drivers above and lower adjusting items.

Asset weighted underperformance versus peers1 of 1.1% for the six months to 30 June 2019 (outperformance of 1.0% for the year ended 31 December 2018).

Interim dividend of 4.7 cents per share (H1 2018: 6.4 cents per share).

Corporate reorganisation successfully completed in May providing more flexibility in financing the business; $150 million Tier 2 notes will be redeemed in full on 16 September 2019.

Luke Ellis, Chief Executive Officer of Man Group, said: "Absolute performance was strong in the first half of 2019, particularly in our quant alternative strategies, which drove a $5.9 billion increase in FUM and growth in profits. Relative performance and flows were more mixed with outperformance and inflows into our quant alternative strategies and underperformance and outflows from our valuation biased strategies, with clients continuing to reduce their equity exposure coming into the third quarter."

"We enter the second half of 2019 with good performance fee earning potential with 90% of Man AHL strategies at high water mark and the diversified nature of our business means that we remain well positioned to navigate the current economic environment. We continue to focus on delivering superior risk adjusted performance for our clients and, in doing so, creating long-term value for our shareholders," he added.

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