LONDON, 4 April 2004 — Man Group, the global provider of alternative investment products and futures broker, expects pretax profits for the last financial year to exceed expectations.
Chief Executive Officer Stanley Fink said the pretax profit, excluding goodwill amortization and exceptional costs, for year ending March 31, 2004 to be in excess of 425 million pounds sterling.
The group has enjoyed a successful year both in terms of continued strong profits growth and business development. They materially strengthened market presence in asset management and brokerage respectively with two important acquisitions, RMF Investment Group, and GNI Holdings Ltd.
Sales have continued to be very strong throughout the year and are estimated to be around $10.5 billion.
“Reflecting the level of sales and good product performance, funds under management have risen strongly and are currently estimated to be around $38 billion, up from $26.1 billion at March 31, 2003,” he said.
“Net management fee income, before goodwill amortization, will be at the top end of market expectations, up by over 45 percent, reflecting the increased level of funds under management,” he added.
“Brokerage net income is up over 40 percent showing the continued recruitment of producer teams, active markets and the successful integration of GNI, which has now been completed.”
Focusing on Man Investments, the asset management division and Man Financial, the brokerage division, Fink said Man Investments provides innovative products and tailor-made solutions for private and institutional clients. Through its core investment managers — AHL, Glenwood, Man Global Strategies, RMF and Westport — Man has succeeded in developing strengths in hedge funds, private equity, leveraged finance and convertible bonds. Established in 1983, Man has launched around 400 products.
Man Financial acts as a broker of futures, options and other equity derivatives for both institutional and private clients and an intermediary in the world’s metals, energy and foreign exchange markets.
The core managers at Man Investments provide the investment content for portfolios and are responsible for portfolio construction, asset allocation decisions and risk management. Each of core managers operates independently to preserve the benefits of diversification and has distinct expertise in one or more alternative asset classes.
AHL implements managed futures investment programs. These programs are quantitative and primary directional in nature, meaning that they seek to take advantage of upward and downward price trends.
Hedge funds and tailor-made solutions for institutional investors as well as convertible bond and leveraged finance products are provided by RMF, while Glenwood was a pioneer in providing multi-manager funds of hedge funds portfolios that target low risk.
Another component is Westport that is dedicated to providing access to outstanding venture capital and buyout managers worldwide. Its private equity solutions take the form of funds of funds and other investment programs such as managed accounts and advisory mandates. With a track record stretching back to 1988, Westport was the first private equity fund of funds manager in Europe and its team includes some of the world’s longest-standing professionals in private equity investing.
During a workshop at Man headquarters here last week Nick Cavalla, global head of manager selection at Man Global Strategies, presenting a paper on new manager initiative stressed on sourcing top flight hedge fund managers at an early stage of development. He also emphasized on how Man Global Strategies identify managers with the ability to generate superior-risk adjusted returns.
John Vlasto, risk manager for Man Global Strategies, made a point showing a long track record of successfully delivering risk controlled returns to investors.
European regional manager of Man Investments, James Jacklin, described the growth of the hedge fund industry. Figures from hedge fund research Group TASS show that a record $72.2 billion in new money was invested in the asset class in 2003, lifting total assets under management to over $750 billion by the year-end. That compares to industry assets of $40 billion at the start of 1990.
Victoria Owen, co-head of Man Group Strategies and a director of Man Investments, put emphasis on how Man Global Strategies incorporates a deligent portfolio construction process with quantitative and qualitative aspects offering a high degree of flexibility and choice with respect to portfolio concentration/diversification and target risk and return parameters.
Highlighting the Gulf region, Antoine Massad, head of Middle East and Asia of Man Investments, Dubai, said Man has been doing business in the region since it opened its first regional office in Bahrain in 1985 and remains the only resident hedge fund manager in the Arab world. “Man has played a substantial role in introducing Arab investors to hedge funds and has a strong commitment to building greater awareness of the asset class in future,” he said
Man’s joint headquarters are in Switzerland and London and has regional offices in Bahrain, Chicago, Dubai, Hong Kong, Montevideo, New York and Tokyo. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 index of major companies and employs a total of 2,500 people in 15 countries worldwide.