Man Group enjoys strong third quarter despite tough background

Man Group sailed happily through the volatile markets of the third quarter as its quantitative fund and discretionary strategies attracted investors and helped the hedge fund company enjoy net inflows during the period.

Man's total funds under management (FUM) of $76.8bn at 30 September 2015 was up 2.5% from the $78.8bn three months, despite net outflows from its fund of funds strategies.

In the fifth successive quarter of inflows in AHL, the main inflows were split between AHL's Alpha mainstream trend following style and the Dimension multi-strategy fund.

Across the group net inflows in the quarter hit $1.4bn, of which sales were $5.7bn and redemptions $4.3bn.

The investment performance was negative to the tune of $2.7bn in the quarter driven by negative market movements in GLG's and Numeric's long only strategies, which a strong performance by AHL's quant strategies could only partially recover.

"Despite the extreme market movements in late August impacting absolute performance across our long only strategies, we have seen good relative performance across the majority of our strategies for the year to date," chief executive officer Manny Roman said.

"The net inflow for the quarter was driven by flows into our quant strategies and we have a solid pipeline of sales in the near-term. Quarterly flows will continue to be lumpy in nature, particularly in respect of certain FRM managed account mandates that are yet to fund, and the exact timing of which remains to be confirmed."

The company expects political uncertainties and economic upheaval around the world to continue to create a volatile market.

"Accordingly, the risk appetite of our clients may impact flows, but we remain focused on continuing to generate attractive investment returns across our range of strategies," Roman added.

Merrill Lynch said the update for what was typically a dull quarter was "positive, if not transformational".

Analysts at RBC Capital Markets said this was, in their opinion, "the most positive outlook statement that this management team has issued".

They also believed the quarters flows had a positive mix effect on likely profits, as inflows were into higher-margin products and outflows were from lower-margin products.