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July 17, 2006 at 08:00 PM
LONDON (Hedgeworld.com)–The contrasting fortunes contained in the trading statements of two listed hedge fund groups–Man Group and Charlemagne Capital–shows how the turbulence of the past month has played out in allocations. It is also reflected in the sharp divergence of the share price performance of the two hedge fund groups.
Man Group, the world’s biggest quoted hedge fund operator by assets under management, withstood the downturn in global markets during the second quarter to raises assets under management by 8% to more than $54 billion. It said that sales in the quarter more than tripled to $5.3 billion from $1.6 billion in the same period a year ago. “Demand for our fund products has been very strong, both from private and institutional investors,” the company said in a trading statement.
The performance of Charlemagne, which targets emerging markets with private equity, long-only and hedge funds, reflected the sell-off in those markets and the greater volatility that has ensued. Charlemagne saw a net redemption of $333 million in the second quarter, leaving it with assets under management of $4 billion. More positively, Charlemagne still managed first-half net inflows of $278 million.
“After a strong first quarter for emerging markets, the second period saw a period of considerable retrenchment,” said Jayne Sutcliffe, chief executive of Charlemagne, in a statement. “However, we remain firmly convinced that emerging market share is fundamentally undervalued compared with developed markets.”
Investors who backed Charlemagne’s March initial public offering at 100 pence per share seemed to have anted up at exactly the wrong time. The stock struggled to keep the float price before turning south in mid-May; it closed on July 11 at 62 pence.
