Assets at Man Group fell back four percent to $42.4bn as poor performance from its flagship AHL strategy and profit taking by some institutional clients knocked the group’s recent recovery off course.
The world’s largest listed hedge fund manager, which in the autumn began to see assets recover from the effects of the credit crisis, said that AHL saw $1.2bn in performance losses in the three months to December.
The strategy tries to make money by following trends in global futures markets.
Net outflows from private investors, who in the previous two quarters were net buyers of Man’s products, were $100m, while institutional investors withdrew a net $1bn as some took profits in strongly-performing strategies such as distressed and convertibles.
However, the firm said it had been selected in January by a large pension fund as preferred provider for a mandate over at least three years that could lead the firm to manage up to around $1bn.
In November chief executive Peter Clarke told reporters he expected institutional investors to become net buyers of Man’s products at some point before March, helped by interest in the firm’s segregated client accounts.
Like most hedge fund firms, Man, whose assets stood at $74.6bn in March 2008, has suffered from investor outflows and performance losses during the credit crisis.
AHL still lagging
Its flagship AHL Diversified Futures strategy was down 16.4 percent in the 12 months to December 28, 2009, in what was a boom year for the hedge fund industry as markets recovered.
The computer-driven strategy, which is important both for sales to private investors and to the movement of Man’s share price, was one of the big winners in a tough 2008.
However, while the strong and sustained rebounds in equity and credit markets have helped, like many such funds it has been hit by sharp market reversals and a lack of clear trends last year.
In a letter to investors, AHL chief executive Tim Wong said 2009’s losses were “commensurate with the types of drawdowns we have experienced in the past and within our statistical expectations”.