Man has a unique and sustainable business model, focused on creating and preserving wealth for our private and institutional investors. Our investment management capabilities are based on systematic, quantitatively orientated single manager and fund-of-funds expertise.
We have a strong team of financing and product structuring experts, who adapt our products and solutions to the needs of investors and regulators worldwide. Our unique distribution network gives us broad and balanced geographic reach. Our business is permeated by a strong commitment to the highest standards of corporate governance, risk management, capital and liquidity management.
The investment products we sell are powered by independent fund entities for whom Man acts as the investment manager.
The fund entities' investment performance, assets and liabilities are therefore separate from Man and are not consolidated into Man's financial statements. The fund entities pay us management fees and performance fees.
A key measure of the size and scale of our business is therefore the aggregate asset exposure that we manage for the fund entities, referred to in this Annual Report as Funds Under Management (FUM). We earn management fees, at a fixed percentage based on FUM, for managing the funds' gross asset exposure.
We earn performance fees based on a percentage of the investment performance earned above a benchmark return or the highest previous asset valuation, a high water mark. The investment performance of the funds we manage is therefore a key statistic as performance sustains the investor's continued allocation to the product and retains for us management and performance fee income.
Man has $26.8 billion of private investor funds under management. We target the mass affluent investor segment, where new onshore regulated products are making diversified, risk adjusted hedge fund returns available to an expanding global market.
We achieve a gross management fee margin of over 4% of FUM in our private investor business, reflecting the premium attached to private investor products with strong performance and long track records.
Man has $12.6 billion of institutional funds under management from around 250 institutional clients – predominantly pension funds, insurance companies, banks, asset managers, sovereign wealth funds and endowments.
We achieve gross management fee margins of around 1% in our institutional business.
