Man Group Plc $3.8 billion increase in our funds under management driven by strong investment performance

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Man Group Plc (LON:EMG) , today announced trading statement for the quarter ended 31 March 2019

Key points

· Funds under management (FUM) of $112.3 billion at 31 March 2019 (31 December 2018: $108.5 billion)

o Positive investment movement of $4.5 billion in the quarter

o Net outflows of $0.7 billion in the quarter

· Completed around $65 million of the $100 million share repurchase programme announced in October 2018 equating to around 36 million shares at an average price of 140 pence per share

· Proposed change to corporate structure remains on track with necessary approvals now received from regulators and approvals from shareholders to be sought in May 2019

Luke Ellis, Chief Executive Officer of Man Group, said:

“We are pleased to report a $3.8 billion increase in our funds under management in the first quarter to $112.3 billion, driven by strong investment performance from our quant alternative strategies and positive market movements. The investment performance more than offset the previously indicated outflows in the quarter, which were concentrated in discretionary long only, including European retail investors reducing exposure to Japan and institutional clients reducing exposure to global equities. While we expect clients to continue adjusting their portfolio allocations during the second quarter, we see ongoing engagement with clients on new mandates and, in particular, continuing strong demand for our total return strategies.”

FIRST QUARTER FUM COMMENTARY

In the three months to 31 March 2019, FUM increased 4% to $112.3 billion driven by positive investment movement of $4.5 billion partially offset by net outflows of $0.7 billion comprising sales of $7.9 billion and redemptions of $8.6 billion.

FUM movements for the three months to 31 March 2019

$bn	FUM at 31 December 2018	Net inflows/ (outflows)	Investment movement	FX & other	FUM at 31 March 2019
Alternative	64.9	1.4	0.9	(0.1)	67.1
Absolute return	28.9	(0.7)	0.5	–	28.7
Total return	22.5	2.2	0.2	0.1	25.0
Multi-manager solutions	13.5	(0.1)	0.2	(0.2)	13.4
Long only	43.5	(2.1)	3.6	0.1	45.1
Systematic	24.7	(0.3)	2.4	–	26.8
Discretionary	18.8	(1.8)	1.2	0.1	18.3
Guaranteed	0.1	–	–	–	0.1
Total	108.5	(0.7)	4.5	–	112.3

ALTERNATIVE

Absolute return

Absolute return FUM decreased by $0.2 billion in the quarter. There were net outflows of $0.7 billion, driven by redemptions from Man GLG’s long short strategies. This was partially offset by net inflows into AHL Institutional Solutions. Positive investment movement of $0.5 billion was primarily driven from positive performance at Man AHL (Evolution +5.9%, Dimension +2.2%, Alpha +1.2% and Diversified +1.1%). As we have previously indicated the management fee margin in this category continues to decline due to the ongoing mix shift towards institutional assets which are at a lower margin. As at 31 March 2019, 68% of Man AHL performance fee eligible FUM was at high watermark and 11% was within 5% of high watermark. As at 31 March 2019, 28% of Man GLG performance fee eligible FUM was at high watermark and 37% was within 5% of high watermark.

Total return

Total return FUM increased by 11% during the quarter. Net inflows of $2.2 billion were seen across strategies, with diversified risk premia being the largest contributor. The investment movement of $0.2 billion was driven by positive performance in the diversified risk premia strategy.

Multi-manager solutions

Multi-manager solutions FUM decreased to $13.4 billion during the quarter. Net outflows of $0.1 billion comprised redemptions from segregated portfolios, which were broadly offset by subscriptions into infrastructure mandates. Investment performance contributed positive $0.2 billion and other movements of negative $0.2 billion were driven by leverage changes. The management fee margin in this category continues to decline due to the continued mix shift towards managed account mandates and the decline in legacy fund of fund assets.

LONG ONLY

Systematic

Systematic long only FUM increased by 9% in the quarter. Net outflows of $0.3 billion were primarily driven by redemptions from global core and european core strategies. This was partially offset by subscriptions into Man Numeric’s global low volatility strategy. There was positive investment performance across all of Man Numeric’s long only strategies, which added $2.4 billion to FUM.

Discretionary

Discretionary long only FUM decreased by $0.5 billion in the quarter. The net outflows of $1.8 billion were from Global, Japanese and US equity strategies. The positive investment movement of $1.2 billion was driven by Man GLG’s equity strategies, particularly Japanese and European strategies. FX gains of $0.1 billion were due to the dollar weakening against Sterling.

FUM by product category

$bn	31-Mar-18	30-Jun-18	30-Sep-18	31-Dec-18	31-Mar-19
Absolute return	29.3	29.7	29.9	28.9	28.7
AHL Dimension	5.3	5.3	5.5	5.7	5.9
GLG Equity absolute return	5.5	6.2	6.3	5.9	5.4
AHL Alpha	5.0	4.9	4.8	4.9	5.0
AHL Evolution	3.4	3.4	3.5	3.4	3.6
Man Institutional Solutions¹	3.3	3.1	3.4	3.4	3.5
AHL other	1.6	1.8	1.8	1.8	1.8
AHL Diversified	2.0	1.8	1.7	1.7	1.6
Numeric absolute return	1.9	1.9	1.8	1.3	1.2
GLG Credit absolute return	1.3	1.3	1.1	0.8	0.7
Total return	18.5	20.1	20.7	22.5	25.0
Diversified risk premia	7.5	9.0	9.7	11.7	13.6
EM total return	4.5	4.4	4.6	4.4	4.6
CLOs and other GLG total return	4.4	4.4	4.1	3.9	4.4
GPM	2.1	2.3	2.3	2.5	2.4
Multi-manager solutions	16.2	15.9	14.0	13.5	13.4
Segregated	6.3	6.6	7.3	6.6	6.2
Infrastructure & direct access	7.7	7.2	4.8	5.2	5.8
Diversified and thematic FoHF	2.2	2.1	1.9	1.7	1.4
Systematic long only	26.9	26.3	27.9	24.7	26.8
Global	8.7	8.4	9.0	7.7	8.5
International	6.7	6.9	7.6	6.8	7.7
Emerging markets	7.6	7.0	7.0	6.7	7.1
US	3.9	4.0	4.3	3.5	3.5
Discretionary long only	21.6	21.6	21.5	18.8	18.3
Japan equity	9.5	9.0	9.1	7.6	7.5
Europe equity	4.2	4.8	4.9	4.3	5.0
Credit & convertibles	2.7	2.3	2.1	2.2	2.2
EM Fixed income	1.9	1.8	1.9	1.9	2.1
Multi Asset	1.1	1.1	0.9	0.8	0.8
Other equity	2.2	2.6	2.6	2.0	0.7
Guaranteed	0.2	0.1	0.1	0.1	0.1
Total	112.7	113.7	114.1	108.5	112.3

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1 Man Institutional Solutions includes AHL Institutional Solutions and Multi-strategy. AHL Institutional Solutions invests into a range of AHL strategies including AHL Dimension, AHL Alpha and AHL Evolution

FUM by investment engine

$bn	31-Mar-18	30-Jun-18	30-Sep-18	31-Dec-18	31-Mar-19
Man AHL	23.8	24.5	25.1	26.2	28.0
Diversified risk premia	3.6	4.6	4.7	5.6	6.8
Dimension	5.3	5.3	5.5	5.7	5.9
Alpha	5.0	4.9	4.8	4.9	5.0
Evolution	3.4	3.4	3.5	3.4	3.6
AHL Institutional Solutions¹	2.7	2.6	3.0	3.0	3.2
Other	1.6	1.8	1.8	1.8	1.8
Diversified (inc. Guaranteed)	2.2	1.9	1.8	1.8	1.7
Man Numeric	32.7	32.6	34.7	32.1	34.8
Alternatives	5.8	6.3	6.8	7.4	8.0
Diversified risk premia	3.9	4.4	5.0	6.1	6.8
Numeric absolute return	1.9	1.9	1.8	1.3	1.2
Long only	26.9	26.3	27.9	24.7	26.8
Global	8.7	8.4	9.0	7.7	8.5
International	6.7	6.9	7.6	6.8	7.7
Emerging markets	7.6	7.0	7.0	6.7	7.1
US	3.9	4.0	4.3	3.5	3.5
Man GLG	37.9	38.4	38.0	34.2	33.7
Alternatives	16.3	16.8	16.5	15.4	15.4
Equity absolute return²	5.9	6.5	6.6	6.2	5.7
EM total return	4.5	4.4	4.6	4.4	4.6
CLOs and other GLG total return	4.4	4.4	4.1	3.9	4.4
Credit absolute return²	1.5	1.5	1.2	0.9	0.7
Long only	21.6	21.6	21.5	18.8	18.3
Japan equity	9.5	9.0	9.1	7.6	7.5
Europe equity	4.2	4.8	4.9	4.3	5.0
Credit & convertibles	2.7	2.3	2.1	2.2	2.2
EM Fixed income	1.9	1.8	1.9	1.9	2.1
Multi Asset	1.1	1.1	0.9	0.8	0.8
Other equity	2.2	2.6	2.6	2.0	0.7
Man FRM	16.2	15.9	14.0	13.5	13.4
Segregated	6.3	6.6	7.3	6.6	6.2
Infrastructure & direct access	7.7	7.2	4.8	5.2	5.8
Diversified and thematic FoHF	2.2	2.1	1.9	1.7	1.4
Man GPM	2.1	2.3	2.3	2.5	2.4
Total	112.7	113.7	114.1	108.5	112.3

1 AHL Institutional Solutions invests into a range of Man AHL strategies including Dimension, AHL Alpha and AHL Evolution

2 GLG Equity absolute return and GLG Credit absolute return include allocations from Multi-strategy included in Man Institutional Solutions in the FUM by product category table

Investment Performance

		Total Return (net of fees)		Annualised Return (net of fees)
		3 months to 31 March 2019	12 months to 31 March 2019	3 years to 31 March 2019	5 years to 31 March 2019	Since inception to 31 March 2019
Absolute return
AHL Dimension	¹	2.2%	9.8%	1.1%	5.9%	5.2%
AHL Alpha	²	1.2%	5.0%	0.0%	5.6%	10.8%
AHL Evolution	³	5.9%	8.9%	6.7%	9.8%	13.3%
AHL Diversified	⁴	1.1%	3.7%	-3.5%	4.7%	10.9%
Man Numeric Market Neutral Alternative	⁵	-1.8%	-11.6%	-3.5%	-1.2%	2.9%
GLG European Long Short	⁶	-1.7%*	-9.8%*	0.1%*	0.1%*	6.7%*
Man GLG Global Credit Multi Strategy	⁷	1.7%*	1.5%*	11.3%*	3.9%*	12.2%*
Total return
Man Alternative Risk Premia SP	⁸	1.9%	-1.8%	3.7%	n/a	5.0%
Man GLG Global EM Debt Total Return	⁹	-1.7%	0.3%	n/a	n/a	2.4%
Multi-manager solutions
FRM Diversified II	¹⁰	1.6%	-2.2%	1.2%	0.7%	3.9%
Indices
HFRX Global Hedge Fund Index	¹¹	2.6%	-3.3%	1.9%	-0.3%
HFRI Fund of Funds Conservative Index	¹¹	3.9%	2.5%	3.7%	2.2%
Barclay BTOP 50 Index	¹²	1.6%	-0.5%	-3.5%	0.7%
HFRI Equity Hedge (Total) Index	¹¹	7.9%	-0.1%	6.8%	3.6%
HFRX EH: Equity Market Neutral Index	¹¹	-0.6%	-4.4%	-1.5%	-0.1%
Systematic long only
Numeric Global Core	¹³	10.3%	-4.0%	9.1%	6.6%	9.9%
Relative Return		-2.2%	-8.0%	-1.6%	-0.2%	1.2%
Numeric Europe Core (EUR)	¹⁴	13.1%	1.8%	8.8%	7.2%	8.9%
Relative Return		0.2%	-3.7%	1.7%	2.0%	2.7%
Numeric Emerging Markets Core	¹⁵	7.6%	-14.3%	12.9%	6.2%	5.3%
Relative Return		-2.3%	-6.9%	2.2%	2.5%	2.1%
Discretionary long only
Man GLG Japan Core Alpha Equity	¹⁶	5.9%	-5.5%	9.1%	7.0%	3.7%
Relative Return		-1.8%	-0.5%	1.0%	-1.0%	2.2%
Man GLG Continental European Growth	¹⁷	10.3%	-3.1%	10.1%	13.1%	9.0%
Relative Return		2.3%	-5.6%	-0.9%	6.0%	3.6%
Man GLG Undervalued Assets	¹⁸	11.1%	2.4%	12.2%	8.0%	9.3%
Relative Return		1.7%	-3.9%	2.7%	1.9%	3.5%