Man Group plc - Annual Report 2007

The institutional investor sales team is focused on delivering products to the largest and most sophisticated professional investors. Our strategy is to continue to grow this sales force and broaden the product coverage. These strategies will result in our distribution network creating continued growth in funds under management and breadth of product offering, providing revenue growth and creating shareholder value.

Investor services standards of the highest level are essential to support our investors and our distributor relationships. Quality in investor services is instrumental in growing our distribution network and ensuring that our global launches have been successful. Through a number of technology enabled solutions we have enhanced the efficiency of distributor processes and the quality of client reporting. The institutional investor experience in particular relies on high standards of performance reporting and risk analysis. This dialogue with distributors and institutional investors provides us with regular feedback on products and strategies. This service platform provides us with a competitive advantage and will be a focus for continued investment.

Service is an essential part of our growth strategy. Its success is reflected in the quality of our funds under management as measured by both strong product sales and low redemption rates. Twin focus on growth from new investors, and stability in existing investors, creates increased funds under management and long-term, sustainable shareholder value.

Governance and risk management are essential components of both the investment management process for our investors and our approach to maintaining a high quality sustainable business for shareholders. Our corporate reputation is fundamental to our business, and maintaining our corporate integrity is the responsibility of everyone in the Group. Underlying our strategy is a strong focus on governance and requirements for high levels of ethical behaviour which runs through our businesses. The importance of our reputation is highlighted by the focus that governance and reputational risk is given within the Risk Management and Corporate Responsibility sections of this Report. Our recent global staff survey confirmed that staff recognise and respect the value of Man’s reputation and the importance of their behaviour in protecting it. In a highly regulated environment we view the maintenance of high standards of ethical conduct and best business practices as a competitive advantage in the market. We therefore work closely with global regulators to ensure that our sector operates effectively in the context of the overall financial market.

Risk management is an essential competency at the portfolio manager, business and Group level. Active risk management throughout the Group mitigates the risk arising from market, credit, liquidity and reputation risk. Our strong capital position, both in terms of equity capital and debt resources, ensures that we have financial security across differing cycles and market conditions.

Our strategy is to maintain a degree of excess capital and substantial liquidity resources to give us flexibility both to continue to fund growth, and to operate the business effectively under stress situations. We actively manage our equity base and carefully evaluate the opportunities to invest our excess capital against returning it to our shareholders. This financial flexibility ensures that we have access to the resources necessary for long-term growth.

Performance is the measure of the successful execution of our strategy. As an asset management business focused on alternatives, where the generation of performance is required to be incremental to the movement of the underlying market, we are constantly challenged to outperform. We are proud of our record of long-term performance for investors across our products. This track record has fuelled our strong growth in assets under management and provides the momentum for further growth.

Our focus on performance is not only for our product investors, but also for our shareholders. The Group’s financial results continue to show the successful implementation of our strategy. Man’s strong financial performance places it amongst the top performing FTSE 100 companies when measured by revenue growth, pre-tax margin, EPS growth, and return on equity. The Group’s dividend has grown at a compound average growth rate of 33% per annum and the share price has grown at a compound average growth of 22% per annum, over the last five years.

The proposed IPO of MF Global will allow us to unlock substantial value, which we have committed to return to our shareholders. It will also provide focus on our leading franchise in alternative investment management. Our overarching strategy is to continue to grow our business franchise for the benefit of our investors, and to leverage our competitive strengths to create substantial shareholder value.

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