Man Group shares slide as revenue from fees plummets
Shares in Man Group slid this morning after the hedge fund reported that its revenue had slumped in the first half of the year.
Although in line with expectations, performance fees were slashed to $32m, down from $404m in the same period last year.
The London-listed hedge fund said this was primarily the result of the “sharp reversal” in markets around the March banking crisis.
Management fee revenue stayed more stable but this was not enough to stop overall revenue falling 40 per cent.
Pretax profit fell to $83m, down from $308m last year, although this was higher than analysts predicted.
Shares in Man Group were trading 8.2 per cent lower at the time of reporting.
Despite the fall in fee revenue and profit, Man Group saw its assets under management hit a record level of $151.7bn.
It also saw $2.6bn in net inflows, which the firm said was 2.5 per cent ahead of the broader industry. The inflows came despite a tumultuous first half, including the debt ceiling stand-off, geopolitical uncertainty and March’s banking instability.
Chief executive Luke Ellis said the inflows highlighted “the broad-based demand we are seeing for the range of differentiated investment strategies and solutions that we offer”.
He is standing down as chief executive at the start of September and will be replaced by Robyn Grew.
Grew drew attention to the recent acquisition of US private credit manager Varagon Capital Partners as the hedge fund looks to expand into the US.
“As the private credit market continues to grow in relevance for the world’s largest institutions, this transaction adds a US-focused direct lending strategy designed to provide consistent risk-adjusted outperformance at scale and in a highly customisable format,” Grew said.