Listen to this article
Man Group, the London-listed hedge fund company, reported a robust performance for 2004 on Thursday in spite of the recent difficulties for the sector, with pre-tax profits up 9.6 per cent at $784m.
But with the lower returns achieved in the past 12 months, net performance fee income was down 50 per cent to $119m. Stanley Fink, chief executive, said the group was confident of its prospects for this year, although one of the group’s largest funds, the trend-following AHL diversified futures fund, is reportedly down 5 per cent so far.
In a tough environment for hedge funds, Man said its flagship AHL fund had fallen 1.2 per cent over 2004 and figures from the company showed that only three out of 11 funds ended the year in positive territory.
But investors were relieved that the results were not worse and the group’s shares, which lost more than 20 per cent of their value last year, jumped 5.6 per cent to £12.92 in morning trading.
The group saw total fund sales of $12.1bn in the year, including $5.8bn of institutional sales, said Mr Fink, and had continued to bring in new money in the current year with $438m raised in its latest global launch.
“These results demonstrate the broad appeal of Man Group’s products and services,” Mr Fink said.
Morning notes from analysts suggested profits were in line with expectations. Geoff Miller at Bridgewell wrote that it had been a solid performance in more difficult times for the industry. However, he added: “It is noticeable that new sales have swung back towards private investors, as institutions appear to have taken a more cautious view on the sector.”
There was some good news on fees, with the company saying it had increased management fees on much of its funds, which helped net management fee income rise 34 per cent to $614m.
In spite of what the group called record gross sales, total funds under management were up by less than $5bn to $43bn after a “modestly positive” overall investment performance, redemptions of $4.3bn and the maturity of a $3.2bn fixed-term institutional mandate.
Total group earnings per share were up 8 per cent at 182 cents and the board will propose a final dividend of 42 cents, making a total for the year of 66 cents, up 30 per cent from the 50.8 cents last time.
Man said that it would have about $400m in excess capital under new accounting standards, which analysts at Numis said could be used for share buybacks.