Hedge fund manager Man Group's total funds under management fell 8 per cent to $40.5bn (£25bn) in the year to end-September. Falling funds, however, mean falling management fees - these declined 3 per cent to $627m in the six months to end September, while performance fees slumped 44 per cent to $24m.
But that latter figure largely reflects 2009's poor fund performance and performance has improved lately. Indeed, Man's main AHL fund was up 6.6 per cent in the first half, while its guaranteed product flagship fund, IP220, was up 13.1 per cent. But there's still some way to go before performance fees really start picking up. And it's not inconceivable that performance could again falter. That's because the US Federal Reserve has launched a further $600bn round of quantitative easing (QE) - Man cited QE measures as a big reason behind last year's poor fund performance. The trouble is that QE distorts asset price trends; bad news for funds such as AHL that rely on exploiting trends. What's more, analysts reckon nearly half of AHL is exposed to QE-sensitive assets.
Numis Securities expects full-year pre-tax profits of $525m, giving EPS of 24.1c ($561m and 27.4c in 2010).
MAN GROUP (EMG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 275p | MARKET VALUE: | £5.1bn | |
| TOUCH: | 274-275p | 12-MONTH HIGH: | 374p | LOW: 200p |
| DIVIDEND YIELD: | 7.7% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 196c* | NET CASH: | $1.36bn | |
| Half-year to 30 Sep | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (c) | Net div per share (c) |
|---|---|---|---|---|
| 2009 | 692 | 302 | 14.1 | 19.2 |
| 2010 | 651 | 180 | 7.70 | 9.50 |
| % change | -6 | -40 | -45 | -51 |
*Includes intangible assets of $1.07bn, or 57c a share Ex-div:24 Nov Payment:14 Dec £1=$1.61 | ||||
