Chief Executive's Review

Outlook

The hedge fund industry as a whole has regained momentum and there is genuine potential for a new wave of asset growth. Base case industry estimates of $2.6 trillion in industry assets by the end of 2013 look ambitious, but achievable. There are two key drivers. Firstly, the prospect of significant institutional allocations, with confidence and trust returning, in tandem with greater appreciation of the role different hedge fund strategies can play in addressing longstanding structural challenges such as liability mismatches. Secondly, a more general shift in the mass affluent markets to a similar understanding of the benefits of hedge fund techniques – namely more active management of downside risk and more varied ways of capturing upside potential – which then translates into an appetite for intuitive and accessible formats.

We start the year with an asset base at a much lower level than prior years and with modest expectations on performance fees, given the 2009 AHL drawdown. However, we have entered a period of significant opportunity in our industry and I believe that Man's business continues to benefit from a strong competitive position, founded on performance over the mid to long-term, powerful global distribution and structuring capability, financial strength and effective business management. Our proposed acquisition of GLG will further strengthen our competitive position and Man will continue to build upon these foundations, with a strong expectation over the coming years that we will grow assets and market share.