Man Group Reports Pretax Profit Drop on Lower Performance Fees

2023-08-01 16:22

Man Group Plc saw pretax core profit decline in the first half of the year even as assets

Man Group Plc saw pretax core profit decline in the first half of the year even as assets under management surged to a record $151.7 billion. Its shares fell.

The world’s largest publicly traded hedge fund firm reported pretax core profit of $137 million in the first six months of the year, compared with $395 million in the first half of 2022, according to a statement Tuesday. The firm attributed the decline to significantly lower performance fee revenue in the period mainly because of the sharp reversal in markets during the March banking crisis.

Man Group fell in early London trading, declining as much as 7.4%. It was down 7% at 8:59 a.m.

“We do not focus on one day’s share price move,” said Antoine Forterre, Man Group’s CFO, in an interview with Bloomberg TV. “The results show that we have differentiated business model, resilience and that we are not standing still.”

Man Group runs a diversified investment management business ranging from hedge funds, long only to quant strategies and is among a few hedge fund firms seeing inflows amid wider outflows from the industry. Clients poured in a net $2.6 billion into its funds during the six-month period. Both inflows and assets beat analyst forecasts.

Analysts forecast the firm would collect a net $2.1 billion during the six months and manage $150 billion at the end of June, according company-compiled estimates.

Earlier this year, Man Group appointed its first female chief executive officer Robyn Grew who will take over from Luke Ellis on Sept. 1, the firm said in a statement in May.

Man Group is further diversifying its range of money pools. The firm said last month that it was buying a controlling stake in private credit manager Varagon Capital Partners, signaling a major push into the booming market.

On deal completion, the new unit will be known as Man Varagon and will sit alongside the firm’s other major product lines such as Man AHL, Man Numeric, Man GPM, Man GLG and Man Solutions to bolster its $151.7 billion asset management business.

--With assistance from Dani Burger.