* Funds under management $59.5 bln at end-Feb
* Holds dividend at 7 cents, making 16.5 cents for 9 months
* Says "significant reduction" in the rate of net outflows
* Shares up 7.8 percent
* Pretax profit for 9 months to end-Dec $262 mln
By Laurence Fletcher
LONDON, March 1 Man Group, the
world's biggest listed hedge fund firm, cheered investors with
news of lower fund outflows in a more buoyant 2012 for financial
markets and said clients could begin to return after recent
The firm, whose shares have halved over the past year on
concerns over outflows and the performance of its funds, said
assets under management rose to an estimated $59.5 billion from
$58.4 billion at end-December, as rising markets helped boost
its fund performance.
At 1023 GMT Man's shares were up 7.8 percent at 141.12
CEO Peter Clarke said there had been a "significant" fall in
net client outflows this year, particularly in February.
"If sentiment is maintained and performance continues...
we'd expect it to translate into rising sales and net inflows,"
Clarke said on a call to journalists.
Clarke's prediction comes after a difficult few years for
Man, which has suffered net client outflows in every quarter
over the past three years, apart from the first two quarters of
In September, it reported its fastest rate of outflows since
early 2009 while in January it reported a slightly reduced pace
of withdrawals and announced further job cuts.
Analysts at Goldman Sachs said in a note on Thursday that
they estimated net outflows so far this year at $1.1 billion.
"The pace of asset raising is likely to remain slow, at
least in the first half of 2012, but this is already reflected
in estimates and deeply discounted in the rating in our view,"
said Singer Capital Markets analyst Sarah Ing.
Man also held its dividend, which has been the subject of
speculation given it is not currently covered by earnings, for
2011 and 2012 and said it would supplement future dividends with
The final dividend for the nine months to end-December is
held at 7 cents a share, while the same annualised dividend of
22 cents will be paid this year.
In future, Man said it will pay out all of its adjusted
management fee earnings each year in dividends. In addition,
performance fee earnings will be added to its capital surplus
and paid out over time via dividends and/or share buybacks.
"Through the financial crisis we've built capital reserves,"
said Clarke. "(In future) we'll be distributing performance
fees, not accumulating capital."
Man has been buoyed by an upturn in performance from its
flagship computer-driven fund AHL, which is up 2.5 percent so
far this year after losing 6.4 percent in 2011.
The $21 billion fund, which is named after 1980s founders
Michael Adam, David Harding and Martin Lueck and which tries to
make money following market trends, is now on average 10.9
percent below its so-called high-water mark, above which it
earns lucrative performance fees.
The firm also saw a strong performance so far this year from
funds run by its GLG unit, which it bought for $1.6 billion in
2010 in a deal that has been criticised by some commentators.
So far this year the onshore versions of its Alpha Select
fund is up 5.2 percent while Japan Core Alpha has gained 19.3
Man, which is shifting the timing of its financial year,
posted a pretax profit of $262 million for the nine months to
end-December, slightly above the $257 million it indicated in