INTERIM MANAGEMENT STATEMENT for the quarter ended 30 September 2012
Key points
Funds under Management (FUM) at 30 September 2012 of $60.0 billion, up 14% since
30 June 2012 ($52.7 billion) with the FRM acquisition closing on 17 July, adding $8.3 billion to FUM
Net outflows in the quarter of $2.2 billion with the increase compared to Q2 ($1.4 billion) concentrated in lower margin product lines (Institutional FoF and GLG long only)
Positive investment movement of $0.5 billion in the quarter
The majority of GLG alternative funds had positive performance in the quarter with the strongest performance coming from various of the credit and convertibles strategies
Over three quarters of performance fee eligible GLG FUM at or within 5% of high water mark at end September
AHL had positive investment movement of $0.3 billion; AHL was approximately 14% from peak on a weighted average basis at end September
FX and other movements of $0.7 billion in the quarter, driven by the strengthening of the Euro against the dollar. The impact of guaranteed product rebalancing was slightly positive in the quarter
Previously announced cost saving programmes remain on track
Financial position remains strong with around $500 million of surplus regulatory capital at 30 September 2012
Peter Clarke, Chief Executive of Man, said:
“Man’s funds under management increased in the quarter, driven by the acquisition of FRM which completed in July. This transaction has created the largest non-US based hedge fund of funds business and I am pleased to say that integration has progressed quickly and efficiently with positive feedback from clients.
“The flow environment continues to be challenging and this was reflected in lower sales in the quarter. Redemptions were in line with the levels experienced in the second quarter which resulted in increased net outflows, albeit in lower margin product lines. Investor sentiment, and consequently the outlook for flows, continues to be subdued.
“Against this backdrop, our focus remains on delivering performance for our investors and improving efficiency. We continue to attract high quality talent from the industry to bolster existing investment teams and to launch new product lines. We remain on track to deliver the cost savings announced in H1.”
SBM TAKE – Since calling a Trading Buy at 72p on the 28 Jun, during which we have collected a very useful 6p divi, this trade has now delivered 37.5% return – illustrating very vividly the power of dividends in ehancing returns.
Results this morning are largely in line with analyst forecasts and the near $0.5bn of surplus cash remains reassuring. Some houses have a break up target of 58p, others of 100p. We think they both woefully understimate the true value of Man which trades at one of the lowest ratios of EV to AUM’s. We stick with our Tradng Buy and expect a re-test of the 100p in the forthcoming sessions.