Man saw net outflows of USD1.0 billion in the first quarter of 2012, reflecting sales of USD3.1 billion and reduced redemptions of USD4.1 billion, according to the group’s interim management statement for the three months ended 31 March 2102. There was a net outflow from alternative funds of USD1.4 billion and a net inflow of USD0.4 billion into long only styles.
The guaranteed product outflow of USD0.4 billion was identical to the previous quarter. The key drivers of the overall reduction in guaranteed product FUM are negative AHL performance and the resulting product degear.
Sales of open-ended alternatives were USD1.7 billion and redemptions were USD2.6 billion. Within this category, AHL had net outflows of USD0.7 billion, driven mainly by continuing redemptions from Nomura Global Trend. GLG Alternatives recorded a small net outflow of USD0.2 billion, with strong flows into the European long/short style offset by small outflows across a range of other strategies.
There was a net outflow of USD0.1 billion from institutional fund of funds, but FUM in this category increased slightly overall. Sales of USD0.5 billion reflect USD0.4 billion of funding from previously announced mandates, from which USD0.6 billion is still to fund. There is client interest in the managed accounts platform and the GLG Multi-Strategy fund, which was up 5.4% in the quarter.
Long only styles saw a net inflow of USD0.4 billion, the majority of which was into Japan Core Alpha.
Man delivered USD2.0 billion of positive performance for fund investors in the first quarter.
GLG’s range of alternative investment styles made a strong start to the year, with the European long short style up 8.0%, Market Neutral up 10.0%, European Distressed up 10.0% and Global Convertibles up 8.4%. Styles which were negative last year, including Alpha Select, Emerging Markets and North American Opportunities, recovered well in the first quarter. Three quarters of GLG FUM was at or within 5% of high water mark at end March.
AHL Diversified plc was up 0.8% from 26 December 2011 to 26 March 2012, with performance across the leading CTA peer group reflecting tough trading conditions for trend followers. Long stock index futures positions contributed positively, as did trading in energies, credit and currencies. Positions in metals, bonds, interest rates and agriculturals detracted from performance. As at end March, AHL was approximately 14% below peak on a weighted average basis.
Long only styles delivered USD1.5 billion of performance for fund investors, with Japan Core Alpha up 21.4% in the quarter.
FX generated a positive contribution of USD0.3 billion in the first quarter, mainly due to the strengthening of the Euro against the dollar.
The routine rebalancing of investment exposure in guaranteed products drove a negative USD0.7 billion of other movements, with AHL 1.6% negative in the rebalancing period. There were further degears of USD0.4 billion on 1 April and USD0.6 billion on 1 May.
“After a strong start to the year, markets came back under pressure in March and drove greater dispersion in investment performance across our industry,” says Peter Clarke, chief executive of Man. “GLG negotiated these conditions well and continued to make money for investors, but performance at AHL turned negative as markets reversed.
“Against this backdrop, redemptions reduced but investor sentiment remained fragile and we are yet to see an increase in sales.
“We remain very focussed on the key priorities of delivering performance for our investors, meeting client needs and improving operational efficiency across the business. The benefits of innovation and investment at AHL are starting to show through, and we have seen good interest in new products as well as for a range of our current strategies which are well positioned for these markets. We continue to take action on costs and are on track to deliver the USD75 million of savings announced in January.”