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Man Group achieves tenfold gains in performance fees

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Man Group PLC Updates

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The Man Group, the world’s largest listed hedge fund manager, announced that performance fees in the first half of the year were ten times higher than they were a year ago, in the latest sign of the industry’s powerful recovery from the coronavirus pandemic.

Strong commodity and equity markets helped shove the London-based company’s performance fee up to $284 million in the six months to June, up from $29 million a year earlier when massive market declines in March affected returns for many funds, which is The highest level since at fewest 2015. Performance fee earnings were 50 percent higher than brokers’ expectations.

Mann also posted $600 million in net customer inflows in the three months to June, the fourth successive quarter of inflows, although the number was lower than analysts had expected. Still, a $6 billion investment acquire in the second quarter helped lift assets under management to a record $135.3 billion.

Bar graph of semi-annual performance fees (in dollars) showing MAN Group benefiting from market recovery

Mann’s findings highlight how powerful the $4 trillion hedge fund industry has rebounded following a tumultuous 18 months for markets, including a massive sell-off final spring, as well as sharp market rotations and spikes led by retail investors in MIM stocks that some funds have also been. . bet against.

Last year, hedge funds, which have lengthy been criticized for their modest returns and lofty fees, averaged 11.8 percent, according to data set HFR, the best calendar year of gains since 2009 in the wake of the financial crisis.

Investors have taken notice. After three years of net outflows, the industry recorded $18.4 billion in inflows in the first half of this year.

Chief Financial Officer Mark Jones said the hedge fund industry is now benefiting from a tailwind following powerful gains final year. “I’ve seen hedge funds deliver exactly what clients want,” he told the Financial Times.

“Customers need unused sources to come back,” he added. They are “trying to decrease their exposure to bonds, and most of them take as much equity risk as they can tolerate.”

This year Man has made solid gains in its computer-powered unit Man AHL, named following 1980s founders Mike Adam, David Harding and Martin Lock, which tracks trends and other patterns in the markets.

The $4.6 billion AHL Evolution fund, which tracks trends in nearly 800 specialty markets, has earned 10.2 percent so far this year and contributed $129 million in performance fees in the first half. The fund is closed to unused money, but Jones said that late final year it opened briefly to unused investment, raising $1 billion in a week.

The man’s first-half gain prior taxes was $323 million, well overhead analyst expectations. The company also said it would purchase back another $100 million of stock in addition to the $100 million announced final September. The broker, Shore Capital, said the company had published “blast” numbers.

Mann shares rose 2.4 percent to 196 pence, their highest level in three years.

Last month, Mann announced that chief investment officer and veteran industry expert Sandy Rattray was leaving the company. Meanwhile, Jones is set to step down from the board of directors and take on the role of executive vice president, overseeing AHL and computer-powered digital units.


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