Man Group: Institutional Investors Looking for Tail Risk Protection

Man Group: Institutional Investors Looking for Tail Risk Protection
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Man Group: Institutional Investors Looking for Tail Risk Protection

Man Group Plc one of the world’s largest alternative investment firms just got a little bit bigger. Assets under management as of  $58.4 December 31st were 2011 billion. As of February 29th 2012 the fund has $59.5 billion (aum). The increase is due to a 2.5% increase ytd for the firm.

The fund managers noted the following outlook:

This mining and metals fund is having a strong year so far

Cubic Corporation Chris Hohn favorite hedge fundsThe Delbrook Resources Opportunities Master Fund was up 9.2% for May, bringing its year-to-date return to 33%. Q1 2021 hedge fund letters, conferences and more Dellbrook is an equity long/ short fund that focuses exclusively on the metals and mining sector. It invests mainly in public companies focused on precious, base, energy and industrial metals Read More

Difficult nine month trading period for Man and the broader asset management industry

Significant progress strategically, but much still to do

A better balanced business post GLG integration (their wholly owned subsidiary).

Proven ability to sell a broader, evolving product range

Robust investment platforms with scope for future growth

The fund is positing itself as follows:

?Multiple strategies, formats and channels
?Institutional quality operations and client service
?Financial strength

Man’s AHL Diversified plc 13.0 % has returned 13% since 1997, compared to the Hedge Fund Weighted Composite Index, which only returned 7.5% per annum.

Below are some performance numbers for other hedge funds managed by the firm:

Selected estimated performance calendar year to date as at 27 February 2012
Alpha select +5.7%
Emerging markets +7.1%
Euro distressed +5.9%
European long short +6.8%
Japan Core Alpha +19.1%
Market neutral +7.6%
North American Opportunity +4.8%
TailProtect -1.8%

The firm itself was up 2.5% ytd.

Man Group being one of the largest hedge funds deals with many high net worth individuals, fund of funds, and other large investment firms on a regular basis. They stated that institutional investors are currently looking for the following: Diversification, protection against downside and tail risk, long term returns.

As others have noted, many investors are now looking to protect against tail risk, or black swan events.  However, since these products are popular now, they are expensive, and it is also difficult to figure out what to protect oneself against.

Man Group as noted above has a Japanese hedge fund, which returned  year to date a whopping 19.1%. Man noted that there is a $760 billion market for assets in Japan.

The Australian market was also noted to have an even larger base, with over $1.4 trillion of assets. Of the total, $980 billion are institutional and $427 billion retail.

Over 50% of the firms’ assets are invested in Europe. Only 10% of assets are invested in the Americas, which is the same as MENA. 17% of assets are dedicated to Japan, and the remaining 10% to South East Asia and Australia.

It is slightly peculiar that the firm is very bearish on the world economy, yet seems to be very bullish on Japan, which is considered one of the weakest countries. We will provide details about this quandary in a later article.



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