Man Group FUM up 10% in first quarter

Shares in Man Group surged on Thursday after the FTSE 250 asset manager reported a 10% jump in funds under management for the first quarter, boosted in part by a recent acquisition.

Funds under management rose to $88.7bn at the end of March 2017 from $80.9bn at the end of December last year.

Net inflows for the quarter came in at $3bn, driven by strong inflows into the discretionary long only and fund of fund alternatives.

Fund of fund alternative FUM increased by $1.7bn in the quarter as a result of net inflows, positive investment movement, FX and other movements.

Man said it saw positive FX movements of $800m in the quarter, mostly on the back of the weaker dollar versus the yen, Australian dollar and euro, while the acquisition of Aalto - completed on 1 January - added $1.8bn to funds under management.

Chief executive officer Luke Ellis said: "Looking forward, the global environment has the potential to create alpha opportunities and we see continuing near-term interest from clients. However, it is important to recognise that this is only one quarter and, as we have said before, flows are likely to vary on a quarterly basis given the institutional nature of our business."

RBC Capital Markets said: "Man has delivered a strong Q1/17 performance that we believe will lead to higher quality management fee upgrades. The only concerns in our opinion are that the Q1 net inflows were largely into fund of funds and long only, which are lower margin (however, this is consistent with management guidance and should be anticipated), and that AHL performance in Q2 so far is disappointing.

"However, Man’s robust Q1 performance indicates that the company’s diversification strategy is working, and we view today’s statement, despite our business mix and AHL performance concerns, positively."

At 0858 BST, the shares were up 6.3% to 149.60p.