Man Group Reports $1 Billion in Outflows

While the company’s GLG unit saw gains in assets under management from $58.4 billion to $59 billion as stock markets rose in Q1, the company’s stock fell last week to its lowest level in 11 years; currently it is trading at a 35% discount to asset value minus liabilities.

The falling stock price has contributed to making Man a target for a takeover, according to the UBS AG analyst Arnaud Giblat in a recent report, with attractions for potential buyers that include its distribution network in Asia and hedge-fund fees that are generally higher than those on mutual funds.

However, CEO Peter Clarke was quoted in the report saying, “We don’t feel that we need a big brother” to achieve strategic goals, and refusing to comment on any speculation about possible takeovers.

Man Group has been the worst-performing member of the U.K. benchmark FTSE 100 Index over the past year. In addition, last month Moody’s Investors Service, which has rated Man Group with its second-lowest investment grade, said it was reviewing the company’s debt for a possible downgrade. Moody’s cited declining AUM, dropping sales, lower profit margins on GLG products versus AHL and continuing underperformance for the company’s hedge funds. It also questioned whether “high fees” charged by hedge funds were sustainable. While most hedge funds charge investors a 2% management fee and take 20% of profits, Man Group charges its AHL investors 3% to manage assets and takes 20% of profits.