Man Group PLC (LSE:EMG) shares rose 1.3% to 217p on Thursday morning after a trading update showed promising signs of growth in its higher-margin Absolute Return strategies.
The hedge fund manager reported an increase in overall assets under management (AUM) to US$161.2 billion at the end of the third quarter, up from US$151.7 billion at the end of June.
Net inflows of US$0.7 billion for the quarter included a US$1.1 billion flow into Absolute Return, substantially beating consensus estimates of US$0.3 billion and after a US$0.3 billion outflow in the second quarter.
Absolute Return, which analysts at UBS noted commands the highest fee margins, finished the quarter with US$48.0 billion in AUM, a 1.5% quarterly increase, and 0.6% above market expectations.
However, the Varagon AUMs, acquired this summer, lagged behind, posting a US$10.7 billion AUM against the City average forecast of US$11.9 billion.
UBS analysts said they expected a "slightly negative-to-neutral" reaction from the market.
"While Man Group reported a miss to total AUMs, the flow and AUM mix (towards higher-margin Absolute Return products) was a positive."