Man Group remained in net inflows over the first half of the year, buoyed by investor demand for and positive performance of its alternatives funds.
Following two record quarters for net flows in 2021, the specialist fund group took in an additional $3.2bn of client cash in the six months to 30 June 2022, which chief executive Luke Ellis pointed out was 2.7% above the industry on an asset-weighted basis.
But the firm was not immune to the impact of falling markets, which dragged assets under management from the record $148.6bn set in 2021 to $142.3bn.
Negative investment performance, mainly from its long-only strategies, made a $4.9bn dent in AUM, while negative FX movements shaved $4.6bn off total assets.
Despite suffering a smaller slide in AUM relative to peers, shares in the fund group were down 3% at the time of writing.
Man Group has been far more resilient than others in the industry thanks in part to generous dividend payments and a wave of share buybacks, including a $125m programme unveiled at the end of June. Its latest interim dividend was flat at 5.6¢ per share, in line with previous guidance.
Demand for alternatives offsets long-only outflows
But the damage would have been considerably worse if not for its alternatives strategies attracting $4.8bn in net inflows during the period.
Absolute return, total return and multi-manager solutions – its three alternatives buckets – all saw net inflows during the period, taking total assets up 6% to $96.8bn.
Its absolute return funds attracted the most money at $4bn and also fared the best in volatile markets, generating $3.4bn of positive investment performance.
Total return was the second best with £500m in net inflows, although $2.1bn was lost to poor performance.
Man Group’s long-only strategies, by contrast, had a much more painful time, with investors pulling $1.6bn and enduring $7bn of negative investment performance. As a result, AUM slumped from $57bn to $45.5bn.
CEO touts ‘high performance fee potential’ in second half
Higher assets in its alternatives funds drove net revenue from management and performance fees to $855m, around 42% of the sum generated for the whole of 2021 and 17% higher than the $728m raked in the year before.
Off the back of this, core earnings per share increased by 28% to 24.0¢.
Ellis added: “The first half of 2022 was yet another strong period for Man Group. Amidst a volatile market environment, we delivered for our clients and shareholders alike, demonstrating the value that active, uncorrelated investment strategies and solutions can bring to portfolios.
“We enter the second half with high performance fee potential and a good level of client engagement. While we expect some volatility in flows in the near term, as clients access liquidity and rebalance their portfolios due to market movements, we remain focused on the long term.”