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Money managers under the microscope

Man Group still waiting for the wave

September 30, 2009

Shares in Man Group, the world’s biggest listed hedge fund firm, are up strongly today after it finally reported a rise in assets.

rtxabt1Like many hedge fund firms, Man has suffered during the industry’s downturn, with assets falling from $70.3 bln a year ago to $43.8 bln currently.

However, the current figure marks a small gain, helped by currency movements and, importantly, a slowdown in outflows.

The outlook could be bright – institutional outflows for the third quarter look set to be low. And in July CEO Peter Clarke predicted the group would return to overall net inflows in the six months to March 2010.

However, difficulties remain.

Net sales to private investors, important to Man because margins tend to be higher, slowed in Q2 from Q1.

UBS analyst Carolyn Dorrett attributes this to the poor performance we’ve seen from AHL, Man’s flagship strategy and accounting for nearly half its assets.rtr26z3l

AHL has suffered because the prolonged market trends it likes to follow – rather like a surfer rides a wave – haven’t really been there this year.

With the hedge fund industry recovering and performance back to its pre-crisis levels, Man will be hoping those trends reappear, and quickly.

(See also Man finds a friend and Strong Man no more)

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