Man Group has reported funds under management (FUM) at 30 June 2013 of USD52.0bn (31 December 2012: USD57.0bn), reflecting sales of USD6.5bn, redemptions of -USD11.5bn, investment movement of USD2.5bn, FX translation effects of -USD2.4bn and other movements of -USD0.1bn.
The group saw mixed performance in the six months to 30 June 2013, with AHL Diversified Programme down 3.2 per cent; GLG Multi-Strategy up 5.1 per cent; FRM Diversified II strategy up 3.1 per cent; and Japan CoreAlpha strategy up 41.4 per cent.
Adjusted profit before tax (PBT) totalled USD134m, comprising adjusted net management fee PBT of USD64m and net performance fee PBT of USD70m.
Statutory profit before tax for the six months ended 30 June 2013 totalled USD122m, an adjusted EBITDA of USD237m, with a margin of 41 per cent.
Cost saving programmes remain on track with further efficiencies identified bringing total cost savings to USD270m in aggregate to be delivered by the end of 2015.
Surplus regulatory capital at 30 June 2013 totalled USD990m (up to USD550m pro-forma for remaining debt buybacks, restructuring charges and interim dividend), subject to ICAAP review by the FCA.
Manny Roman (pictured), chief executive officer of Man, says: “While the first quarter of the year benefited from a more stable environment in financial markets, the second quarter was characterised by renewed volatility.
“Against this background, Man’s investment performance was varied: good in discretionary and challenging in trend following. In terms of flows, investor appetite remained muted as renewed market volatility tempered investors’ willingness to put their money to work. A sustained improvement in investment performance, particularly from AHL, remains the key prerequisite for an improvement in net flows.
“Management remains focused on running the business efficiently. The operating cost savings announced in 2012 have now been executed and during the process further savings have been identified, including some relating to the lower level of the guaranteed book. At the same time, we have continued to invest in people and products, for example building the fixed income and macro platform at GLG and developing successful, high-performing quantitative products, such as Evolution.
“Looking forward, trading conditions remain tough and we do not see any improvement in the near-term outlook. However our focus on investment performance, together with the actions we have taken to diversify the group’s investment management activities, enhance distribution, de-risk our balance sheet and reduce our infrastructure costs mean we are better placed to cope with such circumstances. We intend to continue with this approach but it will take time.”
As announced in March 2012, Man’s dividend policy going forward is to pay at least 100 per cent of adjusted management fee earnings per share in each financial year by way of ordinary dividend. In addition, the group expects to generate significant surplus capital over time, primarily from net performance fee earnings. Available surpluses, after taking into account required capital, potential strategic opportunities and a prudent buffer, will be distributed to shareholders over time, by way of higher dividend payments and/or share repurchases. Whilst the board continues to consider dividends as the primary method of returning capital to shareholders, it will continue to execute share repurchases when advantageous.
In line with this policy the board has declared an interim dividend for the year to 31 December 2013 of 2.6 cents per share, being the adjusted management fee earnings per share for the six months to 30 June 2013. The interim dividend will be paid at the rate of 1.72 pence per share.