Man Group Expects Profit Boost On Hedge Fund Sales

by Phillip Morton, Investors Offshore.com

02 October 2006

Man Group Plc is anticipating profits before tax ahead of market expectations for the six months ending 30 September, driven by a high level of sales.

The company announced last week that net management fee income will be up by 35% compared with the six months to September 30, 2005. Net performance fee income will be up around 25%, while brokerage net income will be up over 40%, reflecting both strong organic growth in active markets and the successful integration and build-out of the acquired Refco assets.

Diluted earnings per share on total operations are expected to be up by around 35% and underlying earnings per share by over 35%.

Sales for the first half year are estimated to be $10.4 billion, split evenly between private investor and institutional product. Sales for the three months to 30 September 2006 are estimated to be $5.1 billion.

The three months sales comprise the previous global launch, Man AP Enhanced Series 3 Ltd, which accounted for $0.6 billion; joint ventures for $1.3 billion; other private investor sales which mainly relate to open-ended funds for $0.7 billion; and institutional sales for $2.5 billion.

Negative performance was around $0.5 billion. Private investor redemptions were $0.8 billion and institutional redemptions were $1.3 billion.

Funds under management are currently estimated to be over $56 billion split private investor $33.5 billion and institutional $22.5 billion. However, the most recent global launch, Man MGS Access Ltd, will not close until October and has not been included in the sales figures for this period.

Man Group will announce its interim results on 9 November 2006 with the earnings per share figures adjusted to reflect the 6-for-1 share split that took effect on 14 August 2006.

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