Man Group first-quarter FuM up 3%, plans another share buyback

FTSE 250 hedge fund Man Group posted a 3% rise in first-quarter funds under management on Thursday as it announced plans to repurchase a further $100m shares following the completion of the $100m share buyback announced last October.

In the quarter to the end of March 2018, funds under management rose to $112.7bn from $109.1bn, with growth across all of its core product categories. This came on the back of net inflows of $4.8bn, driven by strong inflows into alternative risk premia, European long short and emerging market local currency strategies.

Chief executive officer Luke Ellis said: "The ongoing interest in our range of strategies reflects our innovative offering and the strength of our client relationships. In particular, we continued to see client demand for our alternative risk premia strategies and saw flows returning to our European long short strategy, following a sustained period of improved performance.”

"The first quarter of 2018 was a weaker environment for equity markets and momentum strategies. While this impacted our absolute performance in some areas, outperformance across our long only and discretionary alternative strategies demonstrated the resilient and diversified nature of our business. Looking forward we see continuing interest from clients, however, the institutional nature of our business means that flows are likely to be uneven on a quarter-to-quarter basis."

As well as announcing its plans for another share buyback, the company said it continues to review further potential acquisition opportunities.

Whitman Howard analyst Phil Pickard said: "This looks a reasonably good outcome to me given the volatility in the quarter. Given the institutional nature of their investment base there may be some buying of the absolute strategies on this pull back, but they flag the ‘lumpy’ nature of flows, so there may be a hiatus as investors wait to see how volatility settles.

"Trading on 2.4% of assets under management and a consensus yield of 4.4%, the shares are not expensive. Uncertainty over market volatility may hold them back, but the further buyback lends support."

At 0900 BST, the shares were up 5% to 184.30p.