In the three months to 31 March 2019, FUM at Man Group increased 4 per cent to USD112.3 billion driven by positive investment movement of USD4.5 billion partially offset by net outflows of USD0.7 billion comprising sales of USD7.9 billion and redemptions of USD8.6 billion.
Absolute return FUM meanwhile decreased by USD0.2 billion in the quarter. There were net outflows of USD0.7 billion, driven by redemptions from Man GLG’s long short strategies. This was partially offset by net inflows into AHL Institutional Solutions. Positive investment movement of USD0.5 billion was primarily driven from positive performance at Man AHL (Evolution +5.9 per cent, Dimension +2.2 per cent, Alpha +1.2 per cent and Diversified +1.1 per cent). As we have previously indicated the management fee margin in this category continues to decline due to the ongoing mix shift towards institutional assets which are at a lower margin. As at 31 March 2019, 68 per cent of Man AHL performance fee eligible FUM was at high watermark and 11 per cent was within 5 per cent of high watermark. As at 31 March 2019, 28 per cent of Man GLG performance fee eligible FUM was at high watermark and 37 per cent was within 5 per cent of high watermark.
Total return FUM increased by 11 per cent during the quarter. Net inflows of USD2.2 billion were seen across strategies, with diversified risk premia being the largest contributor. The investment movement of USD0.2 billion was driven by positive performance in the diversified risk premia strategy.
Multi-manager solutions FUM decreased to USD13.4 billion during the quarter. Net outflows of USD0.1 billion comprised redemptions from segregated portfolios, which were broadly offset by subscriptions into infrastructure mandates. Investment performance contributed positive USD0.2 billion and other movements of negative USD0.2 billion were driven by leverage changes. The management fee margin in this category continues to decline due to the continued mix shift towards managed account mandates and the decline in legacy fund of fund assets.
Systematic long only FUM increased by 9 per cent in the quarter. Net outflows of USD0.3 billion were primarily driven by redemptions from global core and european core strategies. This was partially offset by subscriptions into Man Numeric’s global low volatility strategy. There was positive investment performance across all of Man Numeric’s long only strategies, which added USD2.4 billion to FUM.
Discretionary long only FUM decreased by USD0.5 billion in the quarter. The net outflows of USD1.8 billion were from Global, Japanese and US equity strategies. The positive investment movement of USD1.2 billion was driven by Man GLG’s equity strategies, particularly Japanese and European strategies. FX gains of USD0.1 billion were due to the dollar weakening against Sterling.
Luke Ellis (pictured), Chief Executive Officer of Man Group, says: “We are pleased to report a USD3.8 billion increase in our funds under management in the first quarter to USD112.3 billion, driven by strong investment performance from our quant alternative strategies and positive market movements. The investment performance more than offset the previously indicated outflows in the quarter, which were concentrated in discretionary long only, including European retail investors reducing exposure to Japan and institutional clients reducing exposure to global equities. While we expect clients to continue adjusting their portfolio allocations during the second quarter, we are satisfied with the ongoing engagement with clients on new mandates and, in particular, by the continuing strong demand for our total return strategies.”
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