LONDON - Man Group, the world’s largest publicly traded hedge fund, beat analysts’ estimates on its first-half earnings on Friday, despite continued client outflows.
The London-based hedge fund has suffered from repeated client withdrawals in recent years, as the firm has struggled to generate returns for both customers and shareholders during the financial crisis.
Man Group said Friday that its funds under management fell 9 percent over the past 6 months, to $52 billion, as client outflows continued to surpass new sales.
Despite the weak performance, the hedge fund said that its adjusted pretax income for the six months through June 30 reached $134 million, a 10 percent increase compared to the same period last year.
Man Group’s largest fund, AHL Diversified, struggled in the three months through June 30 and reported a 7 percent fall in its quarterly performance. The declines were attributed to volatility in both the bond and equity markets related to signs that the U.S. Federal Reserve may rein in its asset purchases.
“While the first quarter of the year benefited from a more stable environment in financial markets, the second quarter was characterized by renewed volatility,†the firm’s chief executive, Emmanuel Roman, said in a statement. “Trading conditions remain tough and we do not see any improvement in the near-term outlook.â€
Despite the pessimistic assessment, Man Group’s stock price surged on Friday as the market reacted positively to its earnings statement.
The firm’s stock rose 5.3 percent in morning trading in London on Friday. Man Group’s share price had only risen 6 percent this year despite a broad rally in the world’s financial markets.
To counter client withdrawals, Man Group appointed Mr. Roman earlier this year and announced a major restructuring plan, including $270 million of expected one-off cost savings by 2015.
The hedge fund also imposed a bonus cap for top executives, saying that annual cash bonuses would be no more than 250 percent of individuals’ salaries.
