MAN GROUP PLC (LON:EMG) (OTCMKTS:MNGPF) reported earnings for the first half of the year on Friday that beat the analyst’s estimates, despite the consistent loss of clients.
In recent years, the world’s largest publicly traded hedge fund has been experiencing continued outflow of clients as the hedge funds is struggling to create value for shareholders and clients since the financial crisis.
Earlier this month, value investor Mohnish Pabrai took part in a Q&A session with William & Mary College students. Q3 2021 hedge fund letters, conferences and more Throughout the discussion, the hedge fund manager covered a range of topics, talking about his thoughts on valuation models, the key lessons every investor should know, and how Read More
Income up, funds under management down
The London-based hedge fund revealed on Friday that total funds under management are down 9 percent to $52 billion versus six months ago of $57.0 billion. The breakup of the figures include; sales of $6.5 billion, redemptions of -$11.5 billion, investment movement of $2.5 billion, FX translation effects of -$2.4 billion and other movements of -$0.1 billion
For the six months through June 30, adjusted pretax income for the hedge fund came in at $134 million, which is an increase of 10 percent from the same period last year. The hedge fund’s biggest holding, AHL Diversified, has not been performing well either, and posted a 7 percent decline for the latest quarter. The struggle was primarily due to the uncertainty in the bond and equity markets resulting from the indications that Federal Reserve may curtain its asset purchase plan.
The hedge fund also announced a dividend of 2.6 cents per share, which was in line with the revised dividend policy. Adjusted EBITDA for the six months came in at $237 million, with a margin of 41 percent. Surplus regulatory capital was reported at $990 million.
To turn the sagging fortunes, MAN GROUP PLC (LON:EMG) (OTCMKTS:MNGPF) introduced various measures including the appointment of Mr. Roman earlier this year, imposing a bonus cap for top executives at 250 percent of individuals’ salaries, announcing many restructuring measures including cost savings of $270 million till 2015.
Man Group expect weak outlook
Chief executive Emmanuel Roman said in a statement “While the first quarter of the year benefited from a more stable environment in financial markets, the second quarter was characterized by renewed volatility.” The chief executive added that, in the near term, he sees no improvement due to tough trading environment.
Despite the grim outlook, stocks of the company gained on Friday. In morning trading, in London, MAN GROUP PLC (LON:EMG) (OTCMKTS:MNGPF)’s share price jumped 5.3 percent, however, this year; the stocks have gained only 6 percent despite a decent run in the global financial markets.