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Man Group plc

Man Group Plc $3.8 billion increase in our funds under management driven by strong investment performance

Man Group Plc (LON:EMG) , today announced trading statement for the quarter ended 31 March 2019

Key points

· Funds under management (FUM) of $112.3 billion at 31 March 2019 (31 December 2018: $108.5 billion)

o Positive investment movement of $4.5 billion in the quarter

o Net outflows of $0.7 billion in the quarter

· Completed around $65 million of the $100 million share repurchase programme announced in October 2018 equating to around 36 million shares at an average price of 140 pence per share

· Proposed change to corporate structure remains on track with necessary approvals now received from regulators and approvals from shareholders to be sought in May 2019

Luke Ellis, Chief Executive Officer of Man Group, said:

“We are pleased to report a $3.8 billion increase in our funds under management in the first quarter to $112.3 billion, driven by strong investment performance from our quant alternative strategies and positive market movements. The investment performance more than offset the previously indicated outflows in the quarter, which were concentrated in discretionary long only, including European retail investors reducing exposure to Japan and institutional clients reducing exposure to global equities. While we expect clients to continue adjusting their portfolio allocations during the second quarter, we see ongoing engagement with clients on new mandates and, in particular, continuing strong demand for our total return strategies.”

FIRST QUARTER FUM COMMENTARY

In the three months to 31 March 2019, FUM increased 4% to $112.3 billion driven by positive investment movement of $4.5 billion partially offset by net outflows of $0.7 billion comprising sales of $7.9 billion and redemptions of $8.6 billion.

FUM movements for the three months to 31 March 2019

$bn

FUM at 31 December

2018

Net inflows/ (outflows)

Investment movement

FX & other

FUM at 31 March

2019

Alternative

64.9

1.4

0.9

(0.1)

67.1

Absolute return

28.9

(0.7)

0.5

28.7

Total return

22.5

2.2

0.2

0.1

25.0

Multi-manager solutions

13.5

(0.1)

0.2

(0.2)

13.4

Long only

43.5

(2.1)

3.6

0.1

45.1

Systematic

24.7

(0.3)

2.4

26.8

Discretionary

18.8

(1.8)

1.2

0.1

18.3

Guaranteed

0.1

0.1

Total

108.5

(0.7)

4.5

112.3

 

ALTERNATIVE

Absolute return

Absolute return FUM decreased by $0.2 billion in the quarter. There were net outflows of $0.7 billion, driven by redemptions from Man GLG’s long short strategies. This was partially offset by net inflows into AHL Institutional Solutions. Positive investment movement of $0.5 billion was primarily driven from positive performance at Man AHL (Evolution +5.9%, Dimension +2.2%, Alpha +1.2% and Diversified +1.1%). As we have previously indicated the management fee margin in this category continues to decline due to the ongoing mix shift towards institutional assets which are at a lower margin. As at 31 March 2019, 68% of Man AHL performance fee eligible FUM was at high watermark and 11% was within 5% of high watermark. As at 31 March 2019, 28% of Man GLG performance fee eligible FUM was at high watermark and 37% was within 5% of high watermark.

Total return

Total return FUM increased by 11% during the quarter. Net inflows of $2.2 billion were seen across strategies, with diversified risk premia being the largest contributor. The investment movement of $0.2 billion was driven by positive performance in the diversified risk premia strategy.

Multi-manager solutions

Multi-manager solutions FUM decreased to $13.4 billion during the quarter. Net outflows of $0.1 billion comprised redemptions from segregated portfolios, which were broadly offset by subscriptions into infrastructure mandates. Investment performance contributed positive $0.2 billion and other movements of negative $0.2 billion were driven by leverage changes. The management fee margin in this category continues to decline due to the continued mix shift towards managed account mandates and the decline in legacy fund of fund assets.

LONG ONLY

Systematic

Systematic long only FUM increased by 9% in the quarter. Net outflows of $0.3 billion were primarily driven by redemptions from global core and european core strategies. This was partially offset by subscriptions into Man Numeric’s global low volatility strategy. There was positive investment performance across all of Man Numeric’s long only strategies, which added $2.4 billion to FUM.

Discretionary

Discretionary long only FUM decreased by $0.5 billion in the quarter. The net outflows of $1.8 billion were from Global, Japanese and US equity strategies. The positive investment movement of $1.2 billion was driven by Man GLG’s equity strategies, particularly Japanese and European strategies. FX gains of $0.1 billion were due to the dollar weakening against Sterling.

FUM by product category

$bn

31-Mar-18

30-Jun-18

30-Sep-18

31-Dec-18

31-Mar-19

Absolute return

29.3

29.7

29.9

28.9

28.7

AHL Dimension

5.3

5.3

5.5

5.7

5.9

GLG Equity absolute return

5.5

6.2

6.3

5.9

5.4

AHL Alpha

5.0

4.9

4.8

4.9

5.0

AHL Evolution

3.4

3.4

3.5

3.4

3.6

Man Institutional Solutions1

3.3

3.1

3.4

3.4

3.5

AHL other

1.6

1.8

1.8

1.8

1.8

AHL Diversified

2.0

1.8

1.7

1.7

1.6

Numeric absolute return

1.9

1.9

1.8

1.3

1.2

GLG Credit absolute return

1.3

1.3

1.1

0.8

0.7

Total return

18.5

20.1

20.7

22.5

25.0

Diversified risk premia

7.5

9.0

9.7

11.7

13.6

EM total return

4.5

4.4

4.6

4.4

4.6

CLOs and other GLG total return

4.4

4.4

4.1

3.9

4.4

GPM

2.1

2.3

2.3

2.5

2.4

Multi-manager solutions

16.2

15.9

14.0

13.5

13.4

Segregated

6.3

6.6

7.3

6.6

6.2

Infrastructure & direct access

7.7

7.2

4.8

5.2

5.8

Diversified and thematic FoHF

2.2

2.1

1.9

1.7

1.4

Systematic long only

26.9

26.3

27.9

24.7

26.8

Global

8.7

8.4

9.0

7.7

8.5

International

6.7

6.9

7.6

6.8

7.7

Emerging markets

7.6

7.0

7.0

6.7

7.1

US

3.9

4.0

4.3

3.5

3.5

Discretionary long only

21.6

21.6

21.5

18.8

18.3

Japan equity

9.5

9.0

9.1

7.6

7.5

Europe equity

4.2

4.8

4.9

4.3

5.0

Credit & convertibles

2.7

2.3

2.1

2.2

2.2

EM Fixed income

1.9

1.8

1.9

1.9

2.1

Multi Asset

1.1

1.1

0.9

0.8

0.8

Other equity

2.2

2.6

2.6

2.0

0.7

Guaranteed

0.2

0.1

0.1

0.1

0.1

Total

112.7

113.7

114.1

108.5

112.3

 

1 Man Institutional Solutions includes AHL Institutional Solutions and Multi-strategy. AHL Institutional Solutions invests into a range of AHL strategies including AHL Dimension, AHL Alpha and AHL Evolution  

 

FUM by investment engine

$bn

31-Mar-18

30-Jun-18

30-Sep-18

31-Dec-18

31-Mar-19

Man AHL

23.8

24.5

25.1

26.2

28.0

Diversified risk premia

3.6

4.6

4.7

5.6

6.8

Dimension

5.3

5.3

5.5

5.7

5.9

Alpha

5.0

4.9

4.8

4.9

5.0

Evolution

3.4

3.4

3.5

3.4

3.6

AHL Institutional Solutions1

2.7

2.6

3.0

3.0

3.2

Other

1.6

1.8

1.8

1.8

1.8

Diversified (inc. Guaranteed)

2.2

1.9

1.8

1.8

1.7

Man Numeric

32.7

32.6

34.7

32.1

34.8

Alternatives

5.8

6.3

6.8

7.4

8.0

Diversified risk premia

3.9

4.4

5.0

6.1

6.8

Numeric absolute return

1.9

1.9

1.8

1.3

1.2

Long only

26.9

26.3

27.9

24.7

26.8

Global

8.7

8.4

9.0

7.7

8.5

International

6.7

6.9

7.6

6.8

7.7

Emerging markets

7.6

7.0

7.0

6.7

7.1

US

3.9

4.0

4.3

3.5

3.5

Man GLG

37.9

38.4

38.0

34.2

33.7

Alternatives

16.3

16.8

16.5

15.4

15.4

Equity absolute return2

5.9

6.5

6.6

6.2

5.7

EM total return

4.5

4.4

4.6

4.4

4.6

CLOs and other GLG total return

4.4

4.4

4.1

3.9

4.4

Credit absolute return2

1.5

1.5

1.2

0.9

0.7

Long only

21.6

21.6

21.5

18.8

18.3

Japan equity

9.5

9.0

9.1

7.6

7.5

Europe equity

4.2

4.8

4.9

4.3

5.0

Credit & convertibles

2.7

2.3

2.1

2.2

2.2

EM Fixed income

1.9

1.8

1.9

1.9

2.1

Multi Asset

1.1

1.1

0.9

0.8

0.8

Other equity

2.2

2.6

2.6

2.0

0.7

Man FRM

16.2

15.9

14.0

13.5

13.4

Segregated

6.3

6.6

7.3

6.6

6.2

Infrastructure & direct access

7.7

7.2

4.8

5.2

5.8

Diversified and thematic FoHF

2.2

2.1

1.9

1.7

1.4

Man GPM

2.1

2.3

2.3

2.5

2.4

Total

112.7

113.7

114.1

108.5

112.3

 

1 AHL Institutional Solutions invests into a range of Man AHL strategies including Dimension, AHL Alpha and AHL Evolution

2 GLG Equity absolute return and GLG Credit absolute return include allocations from Multi-strategy included in Man Institutional Solutions in the FUM by product category table  

Investment Performance

Total Return
(net of fees)

Annualised Return
(net of fees)

3 months to
31 March 2019

12 months to
31 March 2019

3 years to
31 March 2019

5 years to
31 March 2019

Since inception to
31 March 2019

Absolute return

AHL Dimension

1

2.2%

9.8%

1.1%

5.9%

5.2%

AHL Alpha

2

1.2%

5.0%

0.0%

5.6%

10.8%

AHL Evolution

3

5.9%

8.9%

6.7%

9.8%

13.3%

AHL Diversified

4

1.1%

3.7%

-3.5%

4.7%

10.9%

Man Numeric Market Neutral Alternative

5

-1.8%

-11.6%

-3.5%

-1.2%

2.9%

GLG European Long Short

6

-1.7%*

-9.8%*

0.1%*

0.1%*

6.7%*

Man GLG Global Credit Multi Strategy

7

1.7%*

1.5%*

11.3%*

3.9%*

12.2%*

Total return

 

Man Alternative Risk Premia SP

8

1.9%

-1.8%

3.7%

n/a

5.0%

Man GLG Global EM Debt Total Return

9

-1.7%

0.3%

n/a

n/a

2.4%

Multi-manager solutions

 

FRM Diversified II

10

1.6%

-2.2%

1.2%

0.7%

3.9%

Indices

 

HFRX Global Hedge Fund Index

11

2.6%

-3.3%

1.9%

-0.3%

HFRI Fund of Funds Conservative Index

11

3.9%

2.5%

3.7%

2.2%

Barclay BTOP 50 Index

12

1.6%

-0.5%

-3.5%

0.7%

HFRI Equity Hedge (Total) Index

11

7.9%

-0.1%

6.8%

3.6%

HFRX EH: Equity Market Neutral Index

11

-0.6%

-4.4%

-1.5%

-0.1%

Systematic long only

 

Numeric Global Core

13

10.3%

-4.0%

9.1%

6.6%

9.9%

Relative Return

 

-2.2%

-8.0%

-1.6%

-0.2%

1.2%

Numeric Europe Core (EUR)

14

13.1%

1.8%

8.8%

7.2%

8.9%

Relative Return

 

0.2%

-3.7%

1.7%

2.0%

2.7%

Numeric Emerging Markets Core

15

7.6%

-14.3%

12.9%

6.2%

5.3%

Relative Return

 

-2.3%

-6.9%

2.2%

2.5%

2.1%

Discretionary long only

 

Man GLG Japan Core Alpha Equity

16

5.9%

-5.5%

9.1%

7.0%

3.7%

Relative Return

-1.8%

-0.5%

1.0%

-1.0%

2.2%

Man GLG Continental European Growth

17

10.3%

-3.1%

10.1%

13.1%

9.0%

Relative Return

 

2.3%

-5.6%

-0.9%

6.0%

3.6%

Man GLG Undervalued Assets

18

11.1%

2.4%

12.2%

8.0%

9.3%

Relative Return

 

1.7%

-3.9%

2.7%

1.9%

3.5%

 

*Estimated