Man Group PLC (LON:EMG) reported a strong finish to 2019, with revenue, profit and funds under management (FUM) all much better than expected.
Bouncing back from a weak third quarter, FUM finished the year at US$117.7bn, up from US$112.7bn over the previous three months and an increase of US$9.2bn or 8.5% since the end of 2018.
READ: Man Group says outlook "mixed" as funds fall in third quarter
While the hedge fund manager saw net outflows of US$1.3bn, the funds generated a positive investment movement of US$10.1bn thanks to its long-only strategies as well as strong absolute performance from its alternative quant fund strategies.
Man said a “more challenging period for alpha generation, particularly for our strategies with a valuation focus”, led to a 1.1% underperformance versus its peers and the industry-wide reduction of client equity allocations towards bonds was what contributed to net outflows.
Management fees fell, but performance fees were well up, meaning revenue grew 22% to US$1.1bn, versus a consensus forecast of $1.06bn.
Underlying profit before tax of US$386mln was a 54% improvement on the year before, well above the average analyst forecast of US$328mln.
The board declared a final dividend of 5.1 cents, meaning the full year payout was down 17% to 9.8 cents.
Chief executive Luke Ellis said: "Over the course of the year, we saw continued inflows into our alternative strategies, although overall we recorded a small outflow as our clients reduced their equity allocations. In the fourth quarter, we returned to net inflows and that momentum has continued into this year."
The shares were up 1% to 147.7p in early trading on Friday morning.