Funds Hub

Money managers under the microscope

Man and AHL

Rightly or wrongly, the short-term performance of Man Group’s largest fund, AHL, has been closely watched by Man investors as an indicator of the firm’s fortunes.

However, according to a Numis note this week, the fact that AHL is so close to its high-water mark (the point above which a fund can earn performance fees) at the moment gives it extra weight.

“…In the short term AHL will continue to be the principal driver of the P&L in our view,” write analysts David McCann and James Hamilton. “…We believe it still accounts for a disproportionately large (>50 pct) part of the P&L.

“Moreover, given that AHL is now close to HWM (we estimate 1 pct away), the performance fee dynamic means the P&L for the next 12-18 months will look a bit like an at-the-money call option just before expiry — i.e. a small movement in the underlying will have a disproportionately large impact on the performance fee line.

Man and Lion

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Man Group shares were down this morning after last night’s news that AHL dropped 1.76 pct last week, taking losses since Nov 1 to nearly 4 percent. Broker Oriel estimates this leaves AHL 8 percent off its high-water mark.

“November’s performance will disappoint those who expected AHL to string together a good run of investment returns. The company have blamed central bank interventions since the credit crisis for AHL’s poor returns,” Oriel said.

Results revive Man

Some good news for Man Group this morning as its shares soared 6.5 percent on this morning’s full-year results.

Asset levels were actually down since the end of March (from $39.4 bln to $39 bln), but such have been the outflows from Man’s funds that these figures imply a stabilisation of assets and, according to Credit Suisse, zero net outflows.

Long-haired Lagrange brings star culture to Man

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In our investor profile of GLG’s Pierre Lagrange, we highlight two very different sides of London’s hedge fund industry and a potential culture clash in Man Group’s surprise takeover of GLG this month. RTXRM45

REUTERS/Stefan Wermuth

In many ways, Lagrange symbolises the informal, star manager culture that GLG has based its growth on (although also suffered from after Greg Coffey’s departure and Philippe Jabre’s FSA fine).

Morning line-up

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Hedge fund stories from the past 24 hours from Reuters and elsewhere:

rtxcg5sWill ETFs replace hedge funds?…. No – Seeking Alpha

Hintze the Prince’s philanthropist – Bloomberg

Hedgies to top stocks, bonds in 2010 – Reuters

Calpers probes hedge fund advisors – LA Times

Managed futures on the rack – Reuters

Man Group still waiting for the wave

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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.

Man finds a friend

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There has been plenty of bad news surrounding Man Group in recent months.

rtxabsvAssets at end-June were $43.3 bln, compared with $79.5 bln a year before. Flagship managed futures strategy AHL, which not so long ago was boasting some superb-looking performance figures in spite of the credit crisis, is down 5.1 percent over the past year after a poor first half of 2009.

And Man Group’s shares have underperformed the market by 44 percent over the past year, though they have outperformed during 2009.

What a difference a year makes

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Last year’s record poor year for the hedge fund industry was a boom period for managed futures.

rtxc6vaMonths of falling equity prices, plus a first half of rising oil prices followed by a second half of falling oil prices provided some great trends for these computer-driven funds to follow.

Strong Man no more

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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.

rtr1wceuHow times have changed.

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.

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