LONDON (Reuters) – British hedge fund manager Man Group said assets rose 5% in the first half of the year, helped by performance in its computer-driven strategies, boosting fee income and sending its shares higher.
Weaker equity investor sentiment prompted clients to withdraw cash from its funds, however, a trend seen at rival money managers including France-based Amundi and UK-based Jupiter Fund Management.
Man Group, the world’s largest listed hedge fund, said assets under management at the end of June were $114.4 billion, up from $108.5 billion at the end of December and $112.3 billion at the end of March.
Market gains of $6.8 billion drove the rise in assets, said Man Group, founded as a sugar cooperage and brokerage in 1783, and were partially offset by net outflows of $1.1 billion.
The outflows were broadly in line with the $1 billion expected by analysts, in a company-supplied poll, and compare with $8.3 billion of net inflows in the same period a year earlier.
At 0844 GMT shares in Man Group were trading up 3.5%, among the biggest gainers in the <FTSE FT.MC> mid cap index.
The strong performance of some of Man’s quantitative strategies and gains in some of its early stage funds helped performance fee income rise to $142 million from $85 million a year earlier.
That more than offset a fall in management fee income from $401 million to $382 million.
That in turn helped adjusted pretax profit rise 3% to $157 million, against expectations of $138 million. That underpinned an interim dividend of 4.7 cents per share, slightly higher than the forecast, compared with 6.4 cents per share a year earlier.
“Stripping out the impact of performance fees, the group’s net income was still 5% ahead of consensus expectations for the half,” Germany’s oldest private bank, Joh. Berenberg, Gossler & Co KG, said in a note.
Assets and profits were pushed up by the firm’s computer-driven funds while other parts of the business had a more mixed performance, said Man Group Chief Executive Luke Ellis. He said clients continued to reduce their equity exposure into the third quarter.
“We enter the second half of 2019 with good performance fee earning potential,” he said.
He said that nine out of 10 of Man’s ‘black-box’ AHL strategies were at a so-called “high water mark”, the highest level at which a fund has ever reached.
Editing by Simon Jessop and Jon Boyle