Hedge Funds

British hedge fund Man Group's performance fees plunge as assets slip

LONDON (Reuters) - British hedge fund manager Man Group said on Friday its assets under management slipped 0.5 percent to $108.5 billion (81.79 billion pounds) last year on market weakness and currency losses, sending its performance fees plunging 81 percent.

Man Group added $10.8 billion in new client money in the financial year ended Dec. 31 but was hit by investment losses of $7.7 billion and currency and other losses of $3.7 billion.

“2018 was a more difficult year for (the) asset management industry, characterised by periods of higher volatility which impacted performance across asset classes and investment styles,” CEO Luke Ellis said in a statement.

Shares were down 3 percent at 0850 GMT. Analysts expected a fall after weaker performance fee generation and investment losses.

KBW analysts said in a note on Friday that adjusted profit before tax and underlying earnings per share were “both hurt by the weaker performance fee generation.”

Adjusted profits before tax fell to $251 million from $384 million in 2017. The group’s adjusted performance fee profit before tax dropped to $34 million from $181 million in 2017.

Bucking the downward trend, Man adjusted management fee profit before tax rose to $217 million from $203 million in 2017.

Most of Man’s strategies lost money in 2018, with many of the losses in its GLG discretionary trading and its computer-driven Numeric Alternatives stemming from double-digit falls in Europe and emerging markets-focused funds.

Man’s computer-driven trading division AHL eked out modest gains of 2.9 percent and 0.7 percent in its Dimension and Alpha strategies respectively.

Reporting by Maiya Keidan; Editing by Susan Fenton and Edmund Blair