The world’s largest-listed hedge fund firm Man Group (LON:EMG) saw its funds under management rise by 10% in the first-quarter thanks to positive market moves and net inflows related to its acquisition of Aalto.
In a trading update for the quarter ended March 31, the FTSE 250-listed firm said its total assets under management were US$88.7bn (£69.45bn), up from US$80.9bn at the end of December.
Positive investment performances over the quarter added US$2.2bn to Man’s assets as markets rode the ‘Trump Bump’, with long-only strategies contributing US$1.9bn and its alternatives strategies adding US$400mln.
Long-only funds, funds of funds take bulk of new business
Man's long-only funds - which aim to profit when markets rise - and its fund of funds business, FRM, took in the bulk of new assets, with net flows of US$1.4bn and US$1.2bn, respectively.
Positive foreign exchange movements in the quarter were US$0.8bn primarily driven by the weakening of the US dollar against the Japanese yen, Australian dollar, and the euro
Meanwhile, the completed acquisition of US and Europe-based real asset manager Aalto, which completed on January 1, added US$1.8bn to Man’s funds.
Man Group boss sees continuing near-term interest from clients
Luke Ellis, Man Group’s chief executive said: "We came into the year with a good pipeline of interest from clients, and that has resulted in net inflows of US$3bn in the first three months.”
He added: “Looking forward, the global environment has the potential to create alpha opportunities and we see continuing near-term interest from clients.
“However, it is important to recognise that this is only one quarter and, as we have said before, flows are likely to vary on a quarterly basis given the institutional nature of our business.”
In a note to clients reiterating a ‘buy’ rating on Man Group, Shore Capital analysts Paul McGinnis said: “We regard the US$3.0bn of net inflows as a strong result, representing half of our full year US$6.0bn forecast and compared to net inflows of US$1.9bn for the whole of 2016 (including net outflows of US$0.4bn in Q4).”
In early morning trading, Man Group shares on the FTSE 250 index were nearly 3%, or 4.2p higher at 148.6p.