Hedge fund giant Man Group’s funds under management rise with strong performance and positive flows

Luke Ellis, Man Group

Man Group saw its funds under management swell further during the first three months of the year, rising to USD127 billion thanks to strong investment performance and continued investor inflows.

The London-based publicly-traded hedge fund giant added USD3.4 billion during the first quarter, having ended 2020 at USD123.6 billion. The gains were driven chiefly by performance returns of USD3.5 billion, along with net inflows of about USD600 million, though it also suffered negative FX and other impacts amounting to USD700 million, the group said on Friday morning.

Man Group CEO Luke Ellis welcomed the growth, adding the gains and inflows “underscores the strength” of the FTSE 250-listed firm’s business model.

“Client engagement on a number of larger mandates has been positive this year, and as a result we expect to see increased inflows in the coming quarters,” he said, hailing its “state-of-the-art” technology, client relationship strengths, and quality of its staff.

The strong Q1 results mark a dramatic change in Man’s fortunes compared to this time last year. Often considered a bellwether for the UK’s broader alternative asset management industry, the group shed 11 per cent in FUM amid the coronavirus-fuelled market mayhem of March 2020, sliding to USD104.2 billion.

But the firm regrouped over the course of 2020, ending the year with funds under management reaching a record high of USD123.6 billion.

The group’s alternative funds under management – which includes absolute return, total return and multi-manager solutions – grew to USD78.4 billion during the first quarter of 2021, up from USD77.2 billion at the end of 2020.  This was fuelled by USD800 million of investor inflows coupled with USD700 million of performance gains, while FX and other movements fell by USD300 million.

Meanwhile, Man’s long-only strategies also grew during the three-month period ending 31 March, from USD46.4 billion to USD48.6 billion, driven by USD2.8 billion of investment performance, as investor outflows totalled USD200 million and FX and other movements brought a USD400 million hit.

Within Man’s alternatives range, its absolute return strategies – managed under the AHL and GLG brands – stood at USD35.4 billion at the end of Q1, up from USD34 billion at the start of the year. Total return strategies – spanning alternative risk premia, private markets, CLOs and emerging market total return funds – were up slightly, from USD29 billion to USD29.1 billion over the same three-month period. But multi-manager solutions shrank in Q1 from USD14.2 billion to USD13.9 billion.

Performance-wise, most strategies were in positive territory at the end of the first quarter, and the group ultimately managed to keep a lid on losses.

Top of the table was AHL Diversified, the long-running systematic CTA strategy, which generated a 3.5 per cent return in Q1. The GLG Global Multi-Credit Strategy was up around 2.7 per cent over the same period, while AHL Alpha made 2.6 per cent. AHL Dimension returned 1.2 per cent.

FRM Diversified II, the multi-manager hedge fund vehicle run under Man’s FRM unit, grew 2.1 per cent, as GLG Global Emerging Markets Debt Total Return gained 1.5 per cent. Alternative Risk Premia, which lost more than 10 per cent annually in 2020, was up 1.1 per cent in Q1. 

On the downside, the GLG European Long/Short Fund, a market neutral stock-picking strategy focused on European sectors, was caught out by Q1’s corrections, losing 1.6 per cent. AHL Evolution also dropped 1 per cent, AHL Target Risk fell 0.3 per cent, and GLG Alpha Select Alternative gave back 0.5 per cent.