Man Group Plc posted $3.1 billion of net inflows last year, beating analyst estimates and defying wider gloom in the hedge fund industry. Its shares rose.
(Bloomberg) — Man Group Plc posted $3.1 billion of net inflows last year, beating analyst estimates and defying wider gloom in the hedge fund industry. Its shares rose.
The world’s largest publicly traded hedge fund firm said clients added $400 million during the fourth quarter, a turnaround from the third quarter that saw outflows, according to a statement Tuesday. Analysts had estimated annual net inflows of $900 million, according to a company-compiled poll.
“There is a significant opportunity for active investment managers, particularly those with the ability to offer alpha irrespective of the direction of prevailing market trends and in a liquid, highly customisable format,” Chief Executive Officer Luke Ellis said in a statement. “This gives us great confidence in our ability to continue to grow in 2023 and beyond.”
Man Group, which runs hedge funds and long-only strategies that invest across asset classes, managed $143.3 billion at the end of the year, more than the consensus analyst estimate of $141.2 billion. An average hedge fund lost almost 7% last year and clients pulled more than $110 billion from the industry, according to data compiled by Bloomberg and eVestment.
Man Group rose in early London trading, up almost 9% at 8:10 a.m.
“There was a lot of churn in the industry,” Ellis said in a Bloomberg TV interview. “But I am pleased that Man Group has products clients want to invest in.”
Inflows at the firm were primarily driven by clients buying its alternatives investment products to shield themselves from market volatility as rising interest rates sparked sell off. The firm lost $4.3 billion through performance, mainly driven by its long-only funds that suffered during market swings.
All four main computer-driven hedge funds run by Man Group made money last year with AHL Diversified leading with a 13% return. Man Group shares have risen 14.3% this year.
Core profits before tax of $779 million was higher than a consensus analyst estimate of $714 million. The firm said it will repurchase a further $125 million worth of shares.
Man Group also announced in a separate statement Tuesday that Chairman John Cryan will be retiring from the board towards the end of this year. He’ll be succeeded by Anne Wade, who has been a non-executive director at Man Group since April 2020.
(Updates with share price move in the fifth paragraph, additional CEO comment in the sixth paragraph and board changes in the last paragraph.)
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