Man Group suffered an 11 per cent drop in funds under management during the first quarter of 2020, though its absolute return hedge fund strategies generate positive returns during March’s market mayhem.
The London-headquartered publicly-listed global hedge fund group saw its funds under management slide to USD104.2 billion during the three-month period ended 31 March, down from USD117.7 billon on 31 December 2019.
The group, often considered a bellwether for the UK’s broader alternative asset management industry, attracted net inflows of USD500 million, but suffered negative FX and other movements of some USD3.3 billion, according to its first quarter trading statement.
In a statement, Luke Ellis, Man Group’s chief executive officer, said the health and wellbeing of staff and the performance of clients’ assets are Man’s “foremost priorities” in what has been “an unprecedented and testing period”, adding that the company’s balance sheet and liquidity position have remained robust as the Covid-19 pandemic gripped global financial markets.
“Given the extreme volatility in all markets, we are pleased to have outperformed peers on an asset weighted basis across the firm by 2.5 per cent in the first quarter, and to see our absolute return strategies make gains for clients despite the large sell off seen,” he added.
The 11 per cent slide in funds under management was driven by a USD10.7 billion negative investment movement across the group’s long-only funds, which took a severe kicking as the wider equity market collapsed, along with a USD2.7 billion FX movement as the US dollar strengthened against certain currencies.
Overall, Man’s alternative strategies – encompassing absolute return, total return and multi-manager products – dipped from USD71.5 billion to USD70 billion, though its absolute return hedge fund strategies, managed under the AHL, GLG and Numeric brands, recorded net inflows and positive performance of USD500 million during the quarter.
AHL Diversified, the long-running systematic CTA strategy, led the pack with an 8.6 per cent gain during the three-month period, while AHL Alpha, advanced more than 5 per cent.
On the downside, the Man GLG Global Credit Multi-Strategy tumbled 8.3 per cent, while AHL Dimension lost 4.4 per cent, Man Numeric Market Neutral Alternative strategy dropped 4.3 per cent, and the GLG European Long/Short Fund fell 2.5 per cent. AHL Dimension, another managed futures vehicle, was flat.
In contrast, both discretionary and systematic long only strategies suffered double-digit losses well into the double-digits in some cases.
Commenting on the results, Ellis said: “We saw net inflows in the quarter and continue to win mandates but we have seen a recent increase in redemptions as clients adjust their allocations in response to the market moves and heightened economic uncertainty.”
