Tuesday, January 31, 2023

Man Group hedge funds offset long-only falls in Q3


  • CTAs soar – Q3 gain puts AHL Diversified up 23.2% for the year
  • Long-only losses and outflows, plus stronger dollar, dent AuM
  • CEO Luke Ellis believes governments need to fight inflation harder

Hedge fund gains outweighed some steep long-only declines at Man Group in Q3, which they called “a very difficult quarter for the asset management industry.”

Assets fell 3% from $142.3bn to $138.4bn at the world’s largest listed hedge fund manager. AuM is now down 9% from peak $151.4bn at the end of Q1.

Performance gains and inflows to its $97.8bn alternatives range amounted to $2.4bn in Q3, outweighing the $0.7bn decline on the long-only side.

The stronger dollar again had an impact on assets, with FX and other movements of -$3.2bn across all units. This follows a $4.6bn reduction in H1.

Investors showed a preference for a multi-manager approach to alternatives in Q3, allocating a net $3.4bn, but pulling $2.5bn from absolute and total return hedge funds. Long-only outflows continued, worth $1.4bn.

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Trend-following AHL Diversified, up 5.2%, and its alternative risk premia product, up 6.5%, were its best performers in Q3 and are up 23.2% and 11.8% for the year.

The biggest losses occurred in long-only: Numeric Emerging Markets Core was down 11.8% (now -26.5% for the year) and Numeric Europe Core lost 5.2% (now down 19.7% YTD). See the full statement here.

CEO Luke Ellis said yesterday governments need to increase their inflation response.

“You’ve got to stamp it right out and make sure there’s no smoke left whatsoever, otherwise it will reignite,” he told Bloomberg. “My worry is what is likely to happen is that central banks and governments don’t want to take the immediate action.”

Read more: Man Group results distil value of alternatives in year of chaos