Key performance indicators

Our financial and non-financial KPIs illustrate and measure the direct relationship between the experience of our fund investors, our economic performance and delivery of shareholder value. They are set in agreement with the Board and used on a regular basis to evaluate progress against our key objectives. Our KPIs this year capture the adverse effects of extraordinary market conditions, negative fund performance and significant institutional redemptions.

  • Performance
  • Growth
  • Business sustainability

Performance

Outperformance vs. benchmark – private investor %

20072008 20092010Average for the last 3 years
Excess return (%) (8.76) 16.43 (0.42) (9.74) +3%

Measures our ability to deliver superior long-term performance for private investors. Returns for Man’s flagship IP220 product compared to a benchmark represented by 100% Stark 300 Trader Index and 60% HFRI Fund of Funds Composite Index. Man IP220 is composed of allocations to the AHL Diversified Programme and Man Multi-Manager. It has additional structural level features, such as a capital guarantee and leverage, the value of which are not reflected in this comparison.

Excess return over benchmark – Institutions %

20072008 20092010Average for the last 3 years
Excess return (%) (1.87) 2.66 2.13 (3.88) +1.5%

Measures our ability to deliver superior long-term performance for institutions. Returns for Man Four Seasons Strategies compared to the HFRI Fund of Funds Composite Index.

Growth

Growth in funds under management (FUM)

200720082009 2010CAGR over the last 3 years
FUM ($bn) 61.7 74.6 46.8 39.4 -14%

Measures our ability to create products and portfolio solutions which are constantly attractive to new and existing investors, worldwide. FUM decreased by 16% in the year. The principal drivers were net outflows in our institutional business and negative AHL investment performance.

Growth in gross revenue plus income from affiliates $m

200720082009 2010CAGR over the last 3 years 
Revenue ($m) 2,226 3,308 2,632 1,415 -14%

Measures our ability to supply attractive products with margins and customer service levels that support our strong partnerships with intermediaries and institutions. Gross revenue fell by 46% in the year, reflecting a 30% decline in gross management fee income in line with the fall in average FUM, and an 88% decline in gross performance fee income. Gross management fee margins were in line with the prior year.

Business sustainability

Growth in adjusted diluted earnings per share – continuing operations ¢

200720082009 2010CAGR over the last 3 years 
Diluted EPS (¢) 55.4 90.2 57.0 25.5  -23%

Measures the overall efficiency and sustainability of our business model, for the benefit of our shareholders. Adjusted diluted earnings per share declined by 55% in the year, reflecting the decrease in profits.

Post tax return on shareholders’ equity (ROE) %

200720082009 2010Average for the last 3 years
ROE (%) 32.2 41.6 13.5 10.1  +22%

Measures the efficiency with which we invest or return our capital. The decline in ROE is driven primarily by reduction in funds under management and lower performance fee income. The equity component includes a significant level of regulatory capital surplus, which earns a modest return.