Man Group Profits Beat Market Forecasts

by Carla Johnson, Investors Offshore.com

27 May 2005

Man Group PLC, the world's largest listed hedge fund manager, has reported a 10% rise in full-year profits, significantly beating market expectations, as strong growth in management fees and brokerage earnings boosted earnings.

In the year to March 31, pretax profit on total operations totalled $784 million, up from $715 million the previous year. Pretax profits before goodwill and exceptional items rose to $880 million from $821 million.

Funds under management stood at $43.0 billion at the end of March 2005 (including institutional FUM of $17.7 billion), up 12% from last year and contributing to an increase in net management fee income of 34%, up to $614 million.

Brokerage profits were also up, climbing 21% to $145 million.

However, net performance fee income fell 50% to $119 million which reflected reduced contributions to Man's flagship AHL fund.

Diluted earnings per share on total operations were up 8% to 182 cents while dividends were up 30% in US dollar terms to 66.0 cents.

The company also announced that the Man AP Enhanced Series 2 Ltd raised $483 billion after closing in April. Funds under management are currently estimated at $43.0 billion.

“These results demonstrate the broad appeal of Man Group’s products and services," commented Man Group Chief Executive Stanley Fink.

He added:

"Underpinning the continued growth of the business, the Asset Management division had record sales of $12.1 billion and the Brokerage division continued to benefit from its diversified presence across its key markets."

"Since the year-end we have made continued progress in sales, with our latest global launch raising $438 million of investor assets. With Asset Management and Brokerage both well placed for further growth, the Board is confident of the Group’s prospects for the coming year.”

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