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Man Group shares up as hedge fund manager sees assets under management increase, generates higher fee returns

The FTSE 250-listed firm said its gross management and other fees rose by 26% to US$423mln in the six months to 30 June 2018, up from US$378mln a year earlier
Investment growth
Man Group's total assets under management at end June was US$113.7bn, up from US$109.1bn at the end of December

Man Group PLC (LON:EMG) saw its shares rise on Wednesday after the hedge fund manager reported an increase in assets under management and generated higher returns from fees in the first half of 2018.

The FTSE 250-listed firm said its gross management and other fees rose by 26% to US$423mln in the six months to 30 June, up from US$378mln a year earlier.

READ: Man Group reports quarterly growth in assets, announces US$100mln share buyback

Man Group's total assets under management at end June was US$113.7bn, up from US$109.1bn at the end of December, with net inflows of US$8.3bn offset by performance losses and the impact of a stronger US dollar.

The company’s adjusted first-half pre-tax profit was up 5% year-on-year to US$153mln, constrained by investment losses of US$1.7bn and negative currency movements of US$2bn as the US dollar strengthened against most major currencies.

It said trade tensions between the US and China weighed on sentiment in the period and a stronger dollar and higher U.S. interest rates contributed to pressure on emerging markets.

Man Group’s chief executive officer Luke Ellis said: "Given the difficult market backdrop and weaker performance in the first half, funds under management and adjusted profit growth were more limited."

Interim dividend hiked

The hedge fund is paying an interim dividend of 6.4 US cents, up from a 5.0 US cents pay-out at the same stage 2017.

In early afternoon trading, Man Group shares were 5.6% higher at 183.15p.

In a note to clients, analysts at Numis Securities said: “Man looks about fairly valued in our view, albeit we continue to believe that there are cleaner, less volatile companies in the sector with greater long-term shareholder return potential.”

They repeated a ‘hold’ rating and 185p target price on the stock.

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