* Assets under management $63.5 bln at end-Oct
* Says redemptions lower in Oct than in Sept
* Announces $150 mln share buyback plan, shares up 2.6 pct
* Pretax profit $154 mln, above earlier estimate of $145 mln
By Laurence Fletcher
LONDON, Nov 3 Man Group Plc , the world's
largest listed hedge fund manager, saw clients pull out cash at
a slower pace in October than September, raising hopes it may be
able to staunch withdrawals in spite of the euro zone's
deepening debt crisis.
Man said assets under management -- on which fund firms earn
fees -- fell by $1 billion to $63.5 billion in October, driven
by poor performance of its flagship AHL fund. It declined to say
exactly how much money investors had pulled out.
In September, Man shocked investors with news that clients
pulled out money at the fastest pace since early 2009,
principally from its GLG unit, sending its shares plunging 25
percent in a single day.
"The retail investor... who wanted to get out is now out,"
Chief Executive Peter Clarke said on a call with journalists.
"When investor sentiment settles we'll be extremely well placed
to pick up capital... There's an enormous amount of money on the
sidelines ready to be (committed)."
At 0923 GMT Man shares, which have almost halved since the
GLG deal closed a little over a year ago, were up 5.2 percent at
148.6 pence, while the FTSE 100 was up 0.3 percent.
Clarke, who replaced hedge fund industry 'godfather' Stanley
Fink as CEO in 2007, said in a statement that he expected
investor appetite to remain "subdued whilst markets remain
volatile and uncertain".
Last month Luke Ellis, Man's head of multi-manager, said
investors are likely to pull money out of hedge funds in the
"(In October) certainly equity markets had a more solid feel
to them, which helped some GLG strategies. (Retail investors)
felt a bit more solid," Clarke added on the press call.
September's shock outflows revived debate over the merits of
its $1.6 billion 2010 takeover of manager-driven GLG and its fit
with Man's long-established computer-driven AHL fund.
However, despite October's slowdown in outflows, some
analysts were unconvinced.
Peel Hunt analyst Mark Williamson, who rated Man as one of
his top picks in the fund management sector at the start of the
year, told clients in a note that he had "lost all conviction"
in the stock.
"Let's not split hairs, the recommendation has been a dog
and I am truly sorry," he said. "At present I consider that the
investment risks are just too high and therefore would not touch
Barclays analyst Daniel Garrod said recent share price
underperformance offers a buying opportunity but added: "We
estimate that GLG is currently loss-making and AHL contributes
almost all of the group's profits."
Man, which has $1 billion of regulatory capital surplus,
also announced a share buyback of up to $150 million by the end
of the year, in an effort to placate frustrated investors and
put a floor under its sagging market value.
Clarke said the group would announce full plans for the rest
of its regulatory capital in March.
Meanwhile AHL, the $24.4 billion fund named after 1980s
founders Michael Adam, David Harding and Martin Lueck, is now on
average around 11 percent away from its so-called high-water
mark, the level above which it earns lucrative performance fees.
Man also said pretax profit for the six months through
September was $154 million, above its earlier estimate of $145
It also announced a final dividend of 7 cents per share to
give a total dividend, pro-rated for the nine month period, of
16.5 cents per share.