Sign up UNITED KINGDOM
Proactive Investors - Run By Investors For Investors

Hedge fund giant Man Group to take US$15mln hit in 2018 from MiFID II

"The third quarter of 2017 was a period of strong alpha generation for Man, with positive performance across the firm,” said chief executive Luke Ellis
Algorithm
Almost half of Man’s assets are now managed through quantitative trading

The UK’s largest listed hedge fund, Man Group PLC (LON:EMG) expects profits to take a significant hit from the introduction of MiFID II next year.

MiFID II – which, among other things, will change the way investment research is paid for – comes into force in January and Man said its decision to absorb research costs will dent pre-tax profits next year by an estimated US$10-US$15mln.

Strong Q3 results

The news came in its third quarter results statement which showed funds under management surged to US$103.5bn in the three months ended September 30 (June 30: US$95.9bn).

Man had net inflows – fresh investor cash – of US$2.8bn in the quarter, driven by emerging market debt strategies and strong inflows into its “alternative risk premia”.

The company – which manages almost half of its assets through quantitative trading – saw positive investment movement of US$3.3bn in the quarter, while it got a US$0.9bn kicker from the weaker dollar.

READ: Hedge fund Man Group looks toppy after recent run up suggests Jefferies

Man’s long-only stock-picking unit increased its net assets by 11% to US$19.7bn, with investors adding US$0.6bn to emerging debt strategies and US$0.5bn to the European equities strategy.

The hedge fund also announced a new share buyback scheme worth up to US$100mln.

Clients keen on new offerings

"The third quarter of 2017 was a period of strong alpha generation for Man, with positive performance across the firm,” said chief executive Luke Ellis.

“As expected the pace of inflows and the level of margin compression both moderated during the quarter.

READ: Positive market moves helps hedge fund giant Man Group's assets under management rise by 10%

“Inflows remained strong overall and were focussed on some of our newer strategies, in particular alternative risk premia.

“We devote significant efforts to developing innovative solutions, and we are pleased to see our clients' enthusiasm for these newer offerings.”

He added: “Looking forward we continue to see a decent level of interest from clients, with our normal caveat that flows are likely to be uneven quarter to quarter."

The strong performance and news of the buyback boosted shares in early deals on Friday, with the stock up 3.4% to 186.1p.

View full EMG profile View Profile

Man Group Timeline

Newswire
May 21 2012

Related Articles

money
March 06 2018
PCF has had a strong start to the year with growth in new business and the lending portfolio
Audi car
February 09 2018
"S&U continues to demonstrate its historic ability to produce excellent results and strong, sustainable growth," said chairman Anthony Coombs.

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use