Man Group FUM up 6%, buys real asset manager Aalto

Man Group surged on Friday after the FTSE 250 hedge fund manager reported a jump in third-quarter funds under management and announced an agreement to acquire real asset manager Aalto Invest Holding AG.

In a trading statement for the quarter ended 30 September, the group said funds under management increased 6% to $80.7bn, with net inflows of $1.3bn, supported by demand from institutional investors. This comprised sales of $6bn and redemptions of $4.7bn.

Chief executive officer Luke Ellis said: “There was good investment performance across both alternative and long only strategies at GLG and Numeric, offsetting negative performance among some of AHL's strategies this quarter, as the market proved more difficult for trend following strategies. The net inflows were driven largely by the appetite of institutional clients for our quant alternative and quant long only strategies."

As far as the acquisition is concerned, Man said Aalto is a US and Europe-based real asset focused investment manager with $1.7bn FUM as at 30 September.

The deal is expected to complete in January 2017 and Aalto will form the real assets platform of Man Global Private Markets.

Ellis said the acquisition, which is expected to be accretive to earnings per share from 2017 onwards, “will be instrumental in the development of Man Global Private Markets, our new private markets capability”.

“In line with our strategy to continue to diversify the firm and our offering for clients, this private markets capability is complementary to our broad offering in liquid strategies.”

Man Group also said on Friday that it plans to buy back up to $100m of its shares and will continue to review further potential acquisition opportunities.

RBC Capital Markets said it expects consensus upgrades to result from higher-than-expected FUM, the share buyback programme, and the acquisition.

“Man remains the most inexpensive asset manager that we cover,” it said.

Broker Numis said the FUM were 2% ahead of its $78.8bn forecast.

“All in all, we think the market will in the short term regard the small AuM beat and share buyback favourably, especially in light of the recent pull back in the share price. The acquisition is small and appears to be fully valued, although strategically interesting in our view.”

At 0900 BST, Man shares were up 15% to 124.93p.