Man Group outflows jump after large client pulls funds

Man Group was hit by $5.5bn (£4.2bn) in outflows during the three months to September, driven by a single client redeeming its money.

The London-based firm, which is the world’s largest publicly traded hedge fund group, reported assets under management (AuM) of $174.9bn (£134.7bn) as of 30 September.

That figure compares to $178.2bn (£137.3bn) at the end of June, with Man Group pinning the decline mainly on outflows from a single large client in its systematic long-only fund.

Man Group said this withdrawal amounted to $7bn (£5.4bn) during the third quarter. It flagged the development in July, but the redemption was around $300m (£231m) higher due to a better-than-expected investment performance.

The FTSE 250 firm said a strategic client switched its entire equities allocation to a passively managed, index-based portfolio.

Inflows, aside from the redemptions, were still at $1.5bn (£1.2bn) during the quarter. The firm added that performance gains helped partially offset the outflows.

However, Man’s overall net outflows of $5.5bn (£4.2bn) came in worse than a company-compiled analyst estimate of $5.1bn (£3.9bn).

The outflows marked the biggest quarterly drop in at least four years, while AuM also fell short of the $175.2bn (£134.9bn) expected by analysts.

Man Group’s shares fell 3.3 per cent in early trading on Thursday. Its stock price is down 9.8 per cent so far this year.

Man Group is headed up by Robyn Grew, who took over from Luke Ellis as chief executive last September.

One of Grew’s first big changes was moving to retire Man Group’s well-known GLG brand and establishing a new discretionary investing arm.

Roughly two-thirds of Man Group’s assets are invested in alternative investments, including hedge fund strategies and direct lending. The remainder are in long-only strategies designed to beat a market benchmark.