Man Group plc announces its first quarter interim management statement.
- Funds under Management (FUM) at 30 June 2010 of $38.5 billion (31 March 2010: $39.4 billion)
- Private investor FUM of $27.1 billion (31 March 2010: $26.8 billion), reflecting positive AHL performance
- Institutional FUM of $11.4 billion (31 March 2010: $12.6 billion), reflecting a modest net outflow, FX and other effects
- Financial position remains strong, with a regulatory capital surplus of around $1.5 billion at 30 June 2010 and available liquidity resources of around $5.4 billion
- Proposed acquisition of GLG Partners, Inc (“GLG”) proceeding according to plan.
Peter Clarke, Chief Executive, said:
"The quarter to 30 June has seen a return to increased volatility and uncertainty in financial markets. Against the backdrop of falling equity markets, with world stocks down 11.6%* in the quarter, it is pleasing to see AHL generating a positive return of 0.9%** over the same period. However, given the continued market uncertainty, sales in the quarter have, as anticipated, remained subdued.
“Meeting increasing investor demand for onshore products remains a key component of our distribution franchise, and we continue to expand the range and depth of our private investor offering. Our recently expanded UCITS product range has now raised over $350m in Europe and we have new onshore initiatives in Brazil, South Korea and Singapore.
“Institutional demand remains focused on tailored portfolio solutions and managed account structures, providing transparency, control and flexibility for investors. This is demonstrated by our recent mandate wins for managed account investments which, as they begin to fund over the coming months, provide a strong indication of future sales inflows.
“The proposed acquisition of GLG provides us with a wide range of liquid investment strategies through which we can meet investor demand. The transaction remains on track for completion in September and integration planning continues to make good progress. Once completed, this transaction will provide a unique combination of strong global distribution and an extensive range of liquid trading strategies with an established track record of performance.
“With continuing performance and an exciting acquisition to expand our business, we are strongly positioned to deepen our product range across markets and accelerate asset raising."
* Represented by MSCI World Index price return hedged to USD.
** Represented by Man AHL Diversified plc. Managed futures manager AHL is Man’s largest single manager, with FUM of $21.2 billion at 30 June 2010. Man AHL Diversified plc is valued weekly, but for comparative purposes the last weekly valuation of the month has been used.
First quarter commentary
Private investor
Private investor sales were $0.5 billion against a backdrop of uncertain markets and investor sentiment. Redemptions mirrored recent quarterly levels at $1.1 billion, to give a net outflow of $0.6 billion. There continues to be a slow but steady build of assets into onshore products worldwide with, for example, around $350 million now invested in Man’s UCITS offerings. A continued period of positive AHL performance will support higher levels of sales.
AHL performance was modestly positive in the first quarter with Man AHL Diversified plc up 0.9%, compared to world stocks** down 11.6%. AHL performance is reflected in a positive investment movement for private investors of $0.3 billion.
The strengthening of the US dollar against the Euro and Australian dollar caused a negative FX movement in private investor FUM of $0.7 billion.
Other movements of a positive $1.3 billion principally reflect the routine re-balancing of investment exposure in guaranteed products early in the quarter, following positive AHL performance in March.
In total, private investor FUM rose slightly to $27.1 billion at 30 June 2010 from $26.8 billion at 31 March 2010.
Institutional
Institutional sales were $0.2 billion. The previously announced $1.5 billion of new managed account mandates will fund progressively, with less than 5% of these mandates currently reflected in sales and FUM. Redemptions were $0.6 billion, the lowest absolute quarterly level for three years. Looking forward, institutional quarterly redemptions paid on 1 July 2010 totalled $0.3 billion.
Against the backdrop of very challenging markets, Man Multi-Manager provided significant portfolio protection for investors over the quarter, ending the period with a marginally negative investment movement for institutional investors of $0.1 billion.
The strengthening of the US dollar against the Euro caused a negative currency movement in institutional FUM of $0.4 billion. Other movements of $0.3 billion reflect the removal of leverage associated with investor redemptions.
In total, institutional FUM fell to $11.4 billion at 30 June 2010 from $12.6 billion at 31 March 2010.
Financial position
Man’s financial position remains strong. As at 30 June 2010 the regulatory capital surplus was around $1.5 billion and available liquidity resources totalled around $5.4 billion.
GLG transaction update
Regulatory and antitrust review processes associated with Man’s proposed acquisition of GLG Partners, Inc (the “Acquisition”) are proceeding according to plan. Man submitted drafts of its circular and prospectus in connection with the Acquisition for review by the UK Listing Authority on 29 June 2010 and GLG filed its preliminary proxy statement with the US Securities and Exchange Commission (“SEC”) on the same day. GLG’s preliminary proxy statement, Man’s accompanying Schedule 13E-3 (which was also filed on 29 June 2010) and other documents filed with the SEC are available free of charge at the SEC’s website (www.sec.gov).
On 25 June 2010, early termination of the waiting period under the US Hart-Scott-Rodino Improvements Act of 1976 was granted thereby satisfying the related US antitrust clearance condition to the Acquisition. The Acquisition remains conditional upon the satisfaction or, if permitted, waiver of the other conditions referred to in the announcement of 17 May 2010. In collaboration with GLG, Man has submitted various regulatory filings required to proceed with the Acquisition which are currently being considered by the relevant authorities.
Post acquisition integration planning is under way, with key areas of focus being distribution plans for GLG products through the Man network, product structuring opportunities and the detailed actions necessary to achieve the potential annual cost savings of approximately $50 million previously identified.
As announced on 29 June 2010, Man expects that the general meeting to seek approval of the Acquisition will be held in mid-to-late August 2010. Man continues to expect that the Acquisition will close by the end of September 2010.
The dates referred to in this announcement in relation to the Acquisition are indicative only and will depend, among other things, upon the regulatory approval timetable.
Words and expressions which were defined in the announcement of 17 May 2010 have the same meanings in this announcement unless the context otherwise requires.
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