* Q4 net inflows match Q3; pretax a beat on cost-cuts, fees
* To buy back $115 mln in shares; final dividend 5.3 c/share
* Outlook still challenging despite modest recovery -CEO
* Shares surge 9 percent to be among top FTSE 250 gainers
By Simon Jessop
LONDON, Feb 27 Hedge fund firm Man Group
announced a share buyback and bumped up its dividend on
Thursday, sending its stock price soaring, after it drew more
new investment in the last quarter of 2013 that help it beat
full-year profit forecasts.
The results cap a year of upheaval at one of the world's
biggest hedge fund managers that saw it cut staff, replace a
host of managers including the chief executive, and merge some
strategies to boost the fund and company performance and stop
clients taking their money elsewhere.
The company said it took in $700 million in fresh cash in
the three months to Dec. 31, matching a performance in the
previous quarter that had broken two straight years of outflows.
Man announced a final dividend of 5.3 cents a share, taking
the 2013 total to 7.9 cents, as well as a $115 million share
buyback, and while it cautioned on a "challenging" outlook,
investors piled in to send its shares up 11.1 percent by 0941
"It's positive on the share repurchase and dividend with
good flows in Q4, although the outlook is still uncertain," RBC
Capital Markets analyst Peter Lenardos said.
That uncertainty had been reflected by analyst ratings
heading into the numbers, with 17 out of 21 views either "hold",
"sell" or "strong sell", although more recent analyst revisions
had been positive, Thomson Reuters data showed.
Man reported a mixed 2014 performance up to Feb. 21, with
several of its flagship computer-driven AHL strategies down,
although its stock-picking GLG unit was doing better, with the
European Equity Alternative strategy up 2.5 percent.
As at the end of January, nearly three-quarters of its
performance fee-eligible GLG funds were above the high water
mark - the level above which it can earn lucrative performance
fees - and 20 percent were within 5 percent of performance fee
Early demand to buy into Man shares was substantial, with
traded volumes nearly twice the three-month daily average after
less than half an hour of trade.
The second-half pick-up helped to slow the decline in
full-year funds under management, down 5 percent to $54.1
billion, and lifted pretax profit 8 percent to $297 million,
easily beating a consensus estimate of $228 million.
The delivery of some cost savings ahead of schedule and
higher-than-expected second-half performance fees at GLG of $103
million had helped underpin the profit beat, analysts at Goldman
Sachs said in a note.
Those two factors had meant second-half pretax profit was
"materially stronger than we expected", at $158 million against
a forecast $73 million, they added.
Commenting on the results, Chief Executive Manny Roman said
in a statement: "Investment performance in 2013 was reasonable
on a relative basis and flows showed modest recovery towards the
end of the year after a weaker first half."