The embattled hedge fund, Man Group PLC (LON:EMG), is trying to recover some lost ground. The fund, with total assets of $60 billion, manages $16.3 billion in the AHL fund and has recently put $1.5 billion from AHL in a separate strategy.
According to the newspaper Financial Times, the experimental strategy has returned 18 percent in this year and was up 16 percent in 2012. The strategy has been nicknamed Evolution inside the company, according to FT’s sources. While Evolution may be a separate entity, it still uses the quant based approach, which calculates investments from complex algorithms. The automatic spotting of market turns has not returned well for one of the largest publicly traded hedge funds of the world. AHL has underperformed since the Federal Reserve started injecting rounds of monetary easing in 2009. Man AHL Diversified Futures has lost 12.65 percent in the period of Sep 2011 till Sep 2012.
The $1.5 billion strategy invests mainly in emerging markets interest rates and credit indices, instead of trading in future contracts like its parent AHL.
Man Group has roped in employees from its competitors in the past quarters. Douglas Greenig, a former managing director at Fortress Investment Group LLC (NYSE:FIG), joined the firm in early May of this year. The head count at Man Group has increased significantly in this year. The hedge fund also acquired GLG Partners in a $1.6 billion deal in 2010. Most of the GLG funds have stayed on the positive end of returns for this year so far. The hedge fund received some amount of confidence from Odey Asset Management, a leading UK based hedge fund manager. Last month, Odey acquired a 5 percent stake in the struggling Man Group. There is speculation that Odey will progressively increase its stake and eventually put up an offer to acquire the company.
Man Group PLC (LON:EMG) shares have lost 38 percent YTD, but gained 5.8 percent since the news of the new strategy broke on Nov 22.