Man Group Plc (EMG), the world’s largest publicly traded hedge-fund firm, rose the most in 10 months after announcing a $115 million stock buyback and saying clients added money to its funds for a second straight quarter.
The shares climbed as much as 11 percent in London trading. The company’s funds had $700 million of client inflows in the fourth quarter, as $5.5 billion of sales outpaced $4.8 billion of redemptions, London-based Man Group said in its full-year results statement today.
Man Group also said it’s on track to cut costs by $270 million by the end of next year. Redemptions slowed in 2013 as hedge funds managed by its GLG Partners unit posted positive returns, though AHL Diversified, the biggest Man Group hedge fund, lost money for the third straight year and shrank to $11.9 billion in assets as of Dec. 31.
“Despite challenging conditions for our business, we continued to make progress against our strategic objectives,” Chief Executive Officer Emmanuel Roman said in the statement.
Assets under management rose 3 percent to $54.1 billion for the three months ended in December, boosted by the net inflows and investment gains at GLG. JPMorgan Chase & Co. analyst Rae Maile estimated assets would rise to $53.9 billion in the quarter ended Dec. 31, while Peter Lenardos of RBC Capital Markets predicted an increase to $54.3 billion.
The shares rose 7.5 pence, or 9 percent, to 91.65 pence, as of 8:20 a.m. in London, valuing the company at 1.7 billion pounds ($2.8 billion). The stock has still fallen more than 10 percent over the past 12 months.
Profit Swing
Man Group’s pretax profit was $56 million last year, compared with a loss of $748 million in 2012. The company had more than $1 billion of charges in 2012, including a $746 million impairment to write down the value of GLG.
Adjusted earnings per share rose 21 percent last year to 14.1 cents, beating the 12.5 percent estimate from Numis Securities Ltd. analyst David McCann.
AHL’s performance has weighed on the company’s stock price and prompted Lenardos to say it needs another acquisition to diversify the business. AHL, which relies on computer algorithms to spot profitable trends in interest rates, bonds, stocks and currencies, has fallen 2.1 percent this year through Feb. 24 after declining 2.8 percent in 2013, according to data compiled by Bloomberg.
As of Jan. 31, 28 percent of AHL’s assets were above their high-water mark, which is the level at which hedge funds can charge clients the most lucrative performance fees, Man Group said in the statement.
Shrinking Assets
AHL’s three years of losses have come as central banks buy bonds and other financial assets to stimulate the economy. Such interventions can alter the expected movements of securities prices and break up trends, according to fund managers.
Before last year’s third quarter, Man Group had suffered through two years of outflows. The company’s assets have fallen by about 23 percent from $68.6 billion since the end of 2010, and its stock pricehas plunged by almost 70 percent. Roman, 50, has responded by cutting costs, restructuring management and buying back Man Group’s debt. He joined the company in 2010 as part of Man Group’s $1.6 billion purchase of GLG.
Source : http://www.bloomberg.com/news/2014-02-27/man-group-s-assets-rise-3-in-fourth-quarter-after-glg-gains.html
Man Group Plc (EMG), the world’s largest publicly traded hedge-fund firm, rose the most in 10 months after announcing a $115 million stock buyback and saying clients added money to its funds for a second straight quarter.
The shares climbed as much as 11 percent in London trading. The company’s funds had $700 million of client inflows in the fourth quarter, as $5.5 billion of sales outpaced $4.8 billion of redemptions, London-based Man Group said in its full-year results statement today.
Man Group also said it’s on track to cut costs by $270 million by the end of next year. Redemptions slowed in 2013 as hedge funds managed by its GLG Partners unit posted positive returns, though AHL Diversified, the biggest Man Group hedge fund, lost money for the third straight year and shrank to $11.9 billion in assets as of Dec. 31.
“Despite challenging conditions for our business, we continued to make progress against our strategic objectives,” Chief Executive Officer Emmanuel Roman said in the statement.
Assets under management rose 3 percent to $54.1 billion for the three months ended in December, boosted by the net inflows and investment gains at GLG. JPMorgan Chase & Co. analyst Rae Maile estimated assets would rise to $53.9 billion in the quarter ended Dec. 31, while Peter Lenardos of RBC Capital Markets predicted an increase to $54.3 billion.
The shares rose 7.5 pence, or 9 percent, to 91.65 pence, as of 8:20 a.m. in London, valuing the company at 1.7 billion pounds ($2.8 billion). The stock has still fallen more than 10 percent over the past 12 months.
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