Man Group Expects Earnings And Sales Boost

by Phillip Morton, Investors Offshore.com

03 October 2005

Man Group, the world's largest listed hedge fund company, announced on Friday that a strong performance from its flagship AHL fund is expected to boost the company's future earnings.

The London-based company reported that sales in the three months to 30 September 2005 are estimated at $1.8 billion, of which Man's global launch, Man AP Enhanced Series 2 Ltd, accounted for $0.3 billion.

Joint venture sales accounted for $0.3 billion, whilst other private investor sales, mainly relating to open-ended funds, accounted for $0.2 billion. Institutional sales in the quarter were $1.0 billion.

Strong performance from AHL (up 7%) and positive investment movement across all other principal managers added another $1 billion during the quarter, Man stated.

Redemptions for the three months to 30 September 2005 totalled $1.6 billion, of which private investors represented $0.9 billion. In addition, there was $0.5 billion of third party maturities at Marin, an affiliated manager, on which Man had been earning modest fees under a fee sharing arrangement.

Man Group funds under management as of 30 September are estimated to be $44 billion of which private investors account for $26 billion and institutional investors for $18 billion.

Man anticipates that Group pre-tax profits for the six months ending 30 September 2005 will be in line with market expectations and expected that net management fee income will be up by over 20% on the first six months to 30 September 2004. The company also expected strong growth in net performance fee income over the first six months of last year, reflecting good performance at AHL in particular.

Brokerage net income is predicted to rise by more than 15% due to continued organic growth in underlying product volumes and continued recruitment of producer teams.

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