By Saijel Kishan and Kevin Crowley – Jul 8, 2010
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Man Group Plc, the firm that’s buying hedge-fund rival GLG Partners Inc., said assets under management declined 2.3 percent in the fiscal first quarter as market volatility weighed on sales.
Assets dropped to $38.5 billion in the three months ended June 30 from $39.4 billion on March 31, the London-based firm said in a statement today. That exceeded the $38.3 billion median estimate of three analysts surveyed by Bloomberg. Net outflows totaled $1 billion in the period, compared with $1.4 billion a year earlier, Man Group said.
“Given the continued market uncertainty, sales in the quarter have, as anticipated, remained subdued,” Chief Executive Officer Peter Clarke said in the statement.
The world’s largest publicly traded hedge-fund manager agreed in May to buy New York-based GLG for $1.6 billion to broaden its range of funds. The acquisition will create a firm with about $63 billion in assets, easing dependence on Man AHL Diversified Plc, an investment program that accounts for more than half of Man’s holdings.
“It was a weak quarter, but that’s what was expected,” said Keith Baird, a London-based analyst at Oriel Securities Ltd. with a “hold” recommendation on the shares. “There’s limited downside in the stock, but there are question marks over where sales growth comes from in the future. That depends on the performance of AHL.”
Man Group shares advanced 3.8 pence, or 1.8 percent, to 220.9 pence as of 10:36 a.m. in London, valuing the company at about 3.8 billion pounds.
Man AHL Diversified Futures Ltd., which uses computer programs to identify trades in more than 150 futures markets around the world, gained 3 percent this year through June 28 after slumping 16 percent last year for its first loss, according to data compiled by Bloomberg. The fund rose 1.2 percent in the last quarter, while the MSCI World Index of stocks in 24 developed nations slumped 13 percent.
Institutional clients’ funds under management were $11.4 billion as of June 30, compared with $12.6 billion on March 31, Man said today.