In an interim results statement for the year to June 30, published this morning, the world’s largest listed hedge fund manager said it saw net inflows of $ 1 billion over the period. This marked a turnaround from a year ago, when the firm reported a $ 2.6 billion net outflow.
Man AHL, the firm’s range of computer-trading hedge funds, attracted most of the $ 1 billion of net inflows during the first half. Chief executive Manny Roman said: “Recent volatility post-Brexit has benefitted AHL but created a difficult environment again for our discretionary strategies.”
However, this was not enough to prevent its assets under management ending the half at down 3% at $ 76.4 billion – a fall Man Group attributed mainly to negative investment performance in its Japanese equities funds.
Roman, who it was announced last week would be leaving the firm later this summer to take over at the bond giant Pimco, described the first half as “challenging”.
In a statemenet accompanying the July 26 statement, he said: “Looking forward, the outlook, particularly cross border post Brexit, remains uncertain and accordingly the risk appetite of our clients has the potential to impact flows, albeit we have seen no meaningful change so far.”
He later told investors on a results call that the impact of Brexit on people was particularly important to Man Group, which has a large, international workforce. “Any changes to the rights of EU nationals would be of particular concern to us,” he said.
Lower gross performance fee revenue meant dragged Man Group’s adjusted profits before tax down 65% over the first half of the year to $ 98 million.
But Peter Lenardos, an analyst at RBC Capital Markets, said in a note that Man Group had shown resiliency and that neither net flows nor the group’s outlook statement indicated adverse impact from the uncertainties created by Brexit.
Roman will be succeeded as CEO by Man Group president Luke Ellis, who FN reported this week would continue with a strategy of acquisitions when he takes over on September 1.
According to its interim results, Man Group has a surplus regulatory capital of about $ 470 million, some of which Ellis said could also go towards buying back shares.
In his first interview since news of his promotion emerged, Ellis told FN: “If we acquire a business, it is because we think we can generate a good return for shareholders. If we buy shares, it is because we think this is the best way of generating returns for shareholders.”
Man Group’s businesses has diversified significantly under Roman, which the CEO said in the statement “enhanced our resilience as a firm and our ability to navigate the current economic environment”.