Money managers under the microscope
Strong Man no more
A year ago in its final results Man Group – the world’s biggest listed hedge fund firm — was able to report assets under management of $78.5 billion and a 60 percent rise in profits.
The firm’s shares took a pounding this morning, although have since made up some ground, after the firm revealed assets are now down to $44 billion, while profits almost halved.
Like much of the hedge fund industry, the firm has suffered from poor performance and client redemptions.
And like many managed futures strategies, AHL’s fortunes have turned. The flagship strategy is down 2.2 percent in the year to May 19, although performance can be volatile.
(The turnaround in managed futures funds in general has been even more dramatic — after topping the charts in 2008, according to Credit Suisse/Tremont, they are now the second worst-performing strategy year-to-date.)
But Man’s problems don’t end there. Madoff-exposed RMF Four Seasons is down 15.6 percent in the year to March, while Glenwood lost 16.7 percent and multi-strategy Man-IP 2202 8.3 percent.
Weaker performance obviously makes selling products a tougher proposition, although AHL and Man-IP both still have decent long term track records.
Hedge fund firms face a world in which investors are far more nervous than before and eager to scrutinize products that aspire to offer positive returns in all markets. For hedge funds nursing losses, the task is now enormous.