For a number of years, hedge fund manager Man Group's (EMG) performance has been linked to how its key AHL funds performed. However, these funds have been hit badly in recent years because risk on/risk off volatility has played havoc with the computer-driven investment model that AHL operates.
Nothing much changed last year to dispel the gloom. Group funds under management (FUM) slipped from $58.4bn (£38.6bn) to $57bn and have since fallen further to $55bn by the end of February. Crucially, AHL's FUM collapsed from $21bn to $14.4bn in 2012, and all four funds delivered negative returns on the year. On a weighted average basis, that left AHL 13.1 per cent below its high-water mark, the level at which it can start taking 20 per cent performance fees. However, GLG funds fared better, and currently almost two-thirds of performance fee-eligible funds are above their high-water mark.
Comparisons are made difficult by Man's decision to change the year-end, but headline losses reflected impairment charges of $979m on GLG and Man Multi-Manager operations. On an adjusted basis, pre-tax profits for the 12-month period came in at $278m compared with $262m in the previous nine-month period. Broker Numis Securities forecasts 2013 adjusted pre-tax profits of $175m and EPS of 6.7¢ and a reduced dividend of 6.67¢.
| MAN (EMG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 105p | MARKET VALUE: | £1.91bn | |
| TOUCH: | 105-106p | 12-MONTH HIGH: | 153p | LOW: 61p |
| DIVIDEND YIELD: | 13.8% | PE RATIO: | na | |
| NET ASSET VALUE: | 148¢** | NET CASH: | $1.1bn | |
| Year to 31 Mar | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2009 | 2.49 | 0.74 | 28.7 | 44.0 |
| 2010 | 1.35 | 0.54 | 25.1 | 44.0 |
| 2011 | 1.66 | 0.32 | 14.2 | 22.0 |
| Year to 31 Dec | ||||
| 2011*** | 1.25 | 0.19 | 7.7 | 16.5 |
| 2012 | 1.30 | -0.75 | -45.6 | 22.0 |
| % change* | -22 | - | - | - |
Ex-div: 24 Apr Payment: 17 May *Annualised **Includes intangible assets of $1.53bn, or 84¢ a share ***Nine-month period £1=$1.513 | ||||
