* CEO Clarke says no need for a takeover
* Funds under management $59 bln vs $59.5 bln at end-Feb
* Net outflow of $1 bln in three months to March
* Small shareholders question Clarke's reappointment, pay at
* Shares down 6.2 pct, underperform FTSE 100
By Laurence Fletcher
LONDON, May 1 The chief executive of beleaguered
hedge fund manager Man Group said he had the support of
shareholders despite further withdrawals of clients' money and
poor returns from its flagship fund.
Peter Clarke has been under growing pressure as the
company's share price has fallen by almost 60 percent since
September, sparking market talk of a takeover or a change of
Clarke on Tuesday dismissed the need for a bid from a rival,
despite recent speculation by analysts at UBS that the company
was a "likely take-out candidate," and said he had shareholders'
"We do not feel we need a big brother in order to achieve
our strategic objectives," said Clarke, who took over as CEO
from industry 'godfather' Stanley Fink in 2007.
"I do not feel our shareholders do anything other than
support existing management, as witnessed by the proxy votes."
Man shares were down 6.2 percent at 97.1 pence at 1353 GMT,
underperforming the FTSE 100 blue-chip index, which was
up 0.4 percent.
In November, Reuters reported one top 15 shareholder saying
the fund manager was "ripe for a management reshuffle". Last
Friday the Financial Times reported that top 10 institutional
investors had given Clarke a "window" in which to lift the share
Clarke's comments come as Man said client withdrawals slowed
to a net $1 billion in the three months to March 31. Analysts at
Numis had expected a $1.5 billion net outflow. In comparison,
the firm saw $2.5 billion of net outflows in the final three
months of 2011.
Total assets under management fell to $59 billion from $59.5
billion at the end of February.
Clarke and the board nevertheless came in for criticism from
small shareholders at Tuesday's annual general meeting, held
opposite London's Westminster Abbey.
One shareholder described Man's share buybacks - conducted
at an average price of around 134 pence compared with the
current share price below 100 pence - as "a terrible use of the
He also questioned Clarke's pay package, which comprised
$2.9 million - including a $1 million cash bonus - plus just
over $4 million in long-term incentive plans, in the light of
declining funds under management and net income.
"All six of (the key performance indicators) are trending
horribly in the wrong direction," he said. "Sir, does it really
seem like a ($)7 million sort of year to you?"
Another investor, questioning Clarke's reappointment, drew
applause from some shareholders.
In response, chairman Jon Aisbitt said that ahead of the AGM
nearly 99 percent of the proxy votes cast were for Clarke's
"We think our very experienced senior management team are
the best people to address those challenges and we solidly
support them," Aisbitt said. He added that 85 percent of
institutional shareholders had voted in favour of the
Man's outflows were largely at its $21 billion 'black box'
hedge fund AHL, named after 1980s founders Michael Adam, David
Harding and Martin Lueck, which is down 2.2 percent so far in
2012 after falling 6.4 percent last year.
In contrast, the hedge fund industry as a whole is seeing
modest inflows, helped by buoyant markets. Data from GlobeOp
shows investors' demands to pull money out of hedge funds fell
Funds at Man's manager-driven GLG unit - which it bought for
$1.6 billion in 2010 - made gains this year. Its European
Long-Short hedge fund, run by star manager Pierre Lagrange, was
up 8 percent in the first three months of the year.
"We do not see enough here to trigger re-rating or share
price recovery," said analysts at Citi in a note. "AHL
performance and rebalancing continues to be the key issue."
Man has been weighed down by the sluggish performance of
AHL, which tries to make money following trends in futures
markets and which suffered last year as its programmes focusing
on short-term market movements were hit by volatility.
Last year, around 70 percent of group revenue was generated
by AHL funds or funds that allocate to AHL.
Man said on Tuesday that at the end of March, AHL was on
average 14 percent away from its so-called high-water mark,
above which it can earn lucrative performance fees. Citi
analysts estimate that after losses in April it is now around 17
percent away from that mark.
Outflows from AHL were largely from Nomura Global Trend - an
open-ended version of AHL - which Man launched in Japan only
last year, raising $2 billion by last May.
"Sales will remain subdued until we see positive performance
enduring there," Clarke said on a call to journalists.