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Chief Executive’s Strategic
and Operating Review |
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Stanley Fink
Chief Executive
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Overview
The Man Group has enjoyed a very successful year both in
terms of continued strong profits growth and business development. We have seen
continued strong demand for our products in both our businesses, achieved all
our financial targets, and positioned both our businesses for strong growth with
two strategic acquisitions, RMF and GNI.
Significant progress has been made towards achieving our long-standing key financial
and strategic objectives:
Delivering significant growth in underlying earnings per
share (as defined in the Financial Highlights
).
Driven by strong growth in funds under management, net management fee income (before
goodwill amortisation) is up over 54% to £181.1 million. Together with our
Brokerage business, this has resulted in diluted underlying earnings per share
increasing by 33% to 60.7p. |
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Man’s track record in its Asset Management
business stretches back two decades. The strength of this track record is critical
in an industry whose central goal is to provide diversification away from traditional
equity and bond investments. |
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Maintaining high levels of return on
capital.
The acquisition of RMF has had the effect of almost doubling the Group’s
capital base in the current period. Post-tax return on equity in the current period
was nevertheless a very satisfactory 26.9% (2002: 30.7%).
Doubling
the level of funds under management within three years from its level of $6.7
billion at 31 March 2001.
Excluding RMF, in the two years to 31 March 2003, funds under management have
more than doubled to $15.0 billion. RMF’s funds under management were $11.1
billion at 31 March, having increased 28% from $8.7 billion in the 10 months since
acquisition.
Strategically we have further strengthened both our businesses in the year. The
acquisition of RMF has brought us real scale in the institutional market and access
to a solutions-based approach to portfolio construction for this class of investor.
RMF has been integrated within Asset Management so as to broaden and deepen the
skills in the combined business and utilise Man’s established distribution
capabilities to maximum advantage. We are already seeing the early signs of the
potential of this combination, with an institutional investor in RMF entering
into a joint-venture distribution of private client product for its own customers.
In the US we are making progress and now have a private client fund of funds product
available for distribution. We expect to broaden the range of our US private client
offering over the coming year by introducing structured products tailored for
this market. We will continue to invest in people, systems and infrastructure
to provide scale to Asset Management to cater for continued strong growth. In
Brokerage we are well advanced with integrating the GNI activities acquired in
November. GNI brings strength in equity derivatives and further enhances the market
position of Brokerage. Brokerage is well placed strategically in its main futures
and options markets and is using its customer relationships and market presence
to develop an increasing range of product capabilities. |
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