Man Group sees net inflow from private investors
LONDON (Reuters) - Man Group (EMG.L), the world's biggest listed hedge fund firm, reported a rise in sales to private investors and said it expects to return to overall net client inflows in its second half, boosting its shares.
In a statement on Thursday, the firm said it attracted net private investor inflows in its first quarter of $1.9 billion (1.1 billion pounds) into its funds, which aim to deliver positive investment returns whether markets rise or fall. This partly offset net outflows of $3.3 billion from institutions such as pension funds.
"This is a significant positive for the company, especially as gross asset gathering has remained strong even during the worst quarters of the credit crunch," analysts at Bank of America/Merrill Lynch said in a research note.
"Man (stock) is far too cheap for a company where (there) is clear evidence that it retains the ability to generate profitable organic growth," the note said.
Shares, which fell on Wednesday to their lowest in more than a month, were up 1.3 percent at 242.5 pence at 1313 GMT, slightly outpacing gains in the FTSE 100 .FTSE and having touched 250p earlier in the session.
Private investors have generally been quicker than institutions to pull their money from the $1.3 trillion hedge fund industry, and slower to return.
NET INFLOWS
At last month's GAIM hedge fund conference in Monaco speakers said the immediate outlook for flows was tough, although institutional investors could re-enter this year.
Over the past year Man Group's assets have fallen sharply due to poor performance and through outflows. Man said its funds under management had dipped to $43.3 billion at the end of its first quarter on June 30, down from $44 billion at the end of May, as currency gains failed to match the outflows.
The company will return to net client inflows at some point during the six months to March 2010, Chief Executive Peter Clarke told Reuters on the sidelines of the company's annual general meeting. "The momentum of both parts of the business suggests that is when it will be," Clarke said.
Hedge fund firms make money by charging a fee on the assets they run and also on the extra returns they achieve.
Man said in its statement that early redemption figures for the three months to September marked "a significant reduction in the quarterly ... rate," saying it had paid out a gross $1.8 billion in institutional outflows so far.
Most outflows are booked and paid at the beginning of the quarter, it said, implying any further inflows will reduce the net outflows figure to below $1.8 billion.
Clarke told Reuters he expects institutional redemptions to continue to slow.
Gross redemptions from private investors were "considerably lower" than in the previous two quarters, the firm said. Continued...
