• Funds under Management (FUM) at 31 December 2009 of $42.4 billion compared to $44.0 billion at 30 September
• Reduction of FUM in the quarter was principally due to AHL negative investment movement of $1.2 billion, reflecting difficult trading conditions for managed futures strategies particularly in December
• Private investor sales for the quarter of $1.1 billion combined with low redemptions to give a small net outflow of $0.1 billion
• Institutional redemptions of $1.4 billion in the course of the quarter resulted in an institutional net outflow of $1.0 billion
• Significant new institutional mandate for Man’s managed account business in January.
Peter Clarke, Chief Executive, said:
“The financial third quarter is seasonally a quiet period for sales. The negative performance of AHL in December and a net institutional outflow for the quarter resulted in a 4% reduction in our funds under management as at 31 December.
“Momentum continues to build across the business and activity levels with investors and distributors remain high. New assets raised in the third quarter include onshore regulated products in Brazil, the UK and Continental Europe.
“Our new managed account business is seeing continued high levels of interest from institutional investors and we have just been selected by a large pension fund as the preferred provider for a mandate that could potentially reach around $1 billion. The deal, subject to contract, will be for a minimum of three years with allocations commencing in the first quarter of 2010.
“With a promising outlook for hedge fund flows and significant recent progress in our managed account business, Man remains very well placed to grow assets.”
Conference call details
Peter Clarke (Chief Executive) and Kevin Hayes (Finance Director) will host a conference call for investors and analysts at 0800 UK time this morning.
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Playback
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Third quarter commentary
Private investor flows
Private investor sales were $1.1 billion, in keeping with the seasonally quieter financial third quarters experienced in recent years. Private investor demand remains stronger for onshore regulated product, and Man raised onshore assets worldwide during the quarter. Redemptions remained low to give a small net outflow of $0.1 billion.
Taking into account investment movement, FX and other effects, private investor FUM fell slightly from $29.3 billion at 30 September 2009 to $28.7 billion at 31 December.
Institutional flows
The third quarter saw an institutional net outflow of $1.0 billion. Few mandates were awarded in the run-up to the year end, giving modest sales for the period of $0.4 billion. Redemptions totalled $1.4 billion, reflecting a higher level of monthly redemptions during this quarter driven in part by profit taking in convertibles and distressed styles. Institutional quarterly redemptions paid on 1 January 2010 totalled $1.1 billion.
In total, institutional investor FUM at 31 December 2009 was $13.7 billion (30 September 2009: $14.7 billion).
Investment performance
Man’s multi-manager business delivered flat performance in the quarter, reflecting its diversified, low beta style mix. Trading conditions remained difficult for trend-following strategies such as AHL, with gains in stock indices and metals more than offset by sudden market reversals in currencies and bonds. These conditions meant that investment movement had no impact on institutional FUM in the quarter, and generated a negative movement of $1.2 billion in private investor FUM.
FX and other movements
The strengthening US dollar drove a negative FX movement of $0.3 billion in institutional FUM, and there was no currency impact on private investor FUM.
Other movements of a positive $1.0 billion in the period principally reflect the routine re-balancing of investment exposure in products as a result of positive performance, an effect which can reverse following periods of negative performance.
Financial position
Man’s financial position remains strong. As at 31 December 2009 the regulatory capital surplus remained in excess of $1.5 billion and available liquidity resources totalled around $3.8 billion.
