Negative market movements and foreign exchange adjustments more than offset net inflows at fund manager Man Group PLC (LON:EMG) last year.
Funds under management (FuM) at the end of 2018 had fallen to US$108.5bn from US$109.1bn a year earlier, despite net inflows of US$10.8bn of funds (2017: +US$12.8bn).
READ: Man Group posts a slight increase in Q3 funds under management
The hedge fund group said the value of its assets declined by US$7.7bn in 2018, whereas in 2017 they had risen by US$2.9bn, while foreign exchange movements and translation effects wiped US$3.7bn from FuM after they had added US$2.9bn in 2017,
Adjusted profit before tax in 2018 tumbled to US$251mln in 2018 from US$384mln in 2017. Stripping out the adjustments, profit rose to US$278mln from US$272mln in 2017.
"2018 was a more difficult year for the asset management industry, characterised by periods of higher volatility which impacted performance across asset classes and investment styles. Against this backdrop we reported a decrease in performance fee profits but are pleased to have once again outperformed peers and made continued progress in areas we can influence,” said Luke Ellis, the chief executive officer of Man Group.
The group said its asset-weighted outperformance versus peers across its funds clocked in at 1.0% in 2018, although this was down from the 1.9% outperformance in 2017.
“We have managed costs while investing for growth, further diversified to capture new opportunities and strengthened client relationships, helping us to achieve broad-based net inflows of US$10.8 billion.
“Looking ahead, we have had a healthy number of new mandate wins but as clients respond to changes in the market and adjust their portfolios we have also seen a pick-up in redemptions. I remain confident that Man Group is structurally well positioned for the future with compelling investment propositions, deep client relationships and a competitive advantage in our experience of using financial technology to drive investment returns,” Ellis said.
A final dividend equivalent to 4.06 pence per share has been proposed, down from 4.18p in 2018; the total dividend for the year is equal to 8.94 pence per share (2017: 7.97 pence).