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First quarter interim management statement 2009

09 July 2009

  • Funds under Management (FUM) at 30 June of $43.3 billion compared to $44 billion announced at end May (31 March 2009: $46.8 billion)
  • Strong private investor sales for the quarter of $3.4 billion and reduced redemptions led to private investor inflows of $1.9 billion
  • Institutional redemptions of $3.6 billion, slightly better than previously estimated; second quarter redemptions of $1.8 billion paid on 1 July, marking a significant reduction in the quarterly redemption rate
  • First product launched from newly integrated hedge fund management business
  • Positive industry performance has helped investor sentiment

Peter Clarke, Chief Executive, said:

“The first quarter of our financial year continued the trends we reported in our preliminary results announcement at the end of May.

“We have enjoyed a very strong quarter for private investor sales, raising $3.4 billion in the period which, together with reduced redemption rates, generated strong net inflows. Our product range, with its focus on liquid and transparent investment strategies, together with our long track record, has generated high levels of demand across our distribution network, particularly from Asia Pacific. Institutional sales remained muted in the first quarter and redemptions were high, in line with our statements in May. As anticipated, quarterly institutional redemptions have now declined significantly, with $1.8 billion paid on 1 July.

“Our new hedge fund management business is now operational. We have addressed the evolving investor requirements for hedge fund investing through this comprehensive and powerful business. This has been welcomed by investors and distributors alike and our latest products will be managed under the new investment process.

“With positive industry returns for 2009 to date and increasing investor focus on businesses with the resources and experience to adapt to today's market requirements, Man's financial strength and investment breadth means we are well placed to grow market share.”

First quarter commentary

Private investor flows

In keeping with the strong sales historically seen in the first quarter, private investor sales totalled $3.4 billion, including notable success in Japan, Australia, the Middle East and Latin America. Redemptions were considerably lower than in the previous two quarters, leading to a private investor net inflow of $1.9 billion.

Taking into account investment movement, FX and other effects, private investor FUM fell slightly from an estimated $28.5 billion at end May 2009 to $27.3 billion (31 March 2009: $27.8 billion).

Institutional flows

The institutional business saw a net outflow of $3.3 billion. Sales remained muted and redemptions, estimated to be $3.8 billion at the end of May, totalled $3.6 billion for the first quarter. Second quarter redemptions of $1.8 billion were paid on 1 July, marking a significant reduction in the quarterly rate.

In total, institutional investor FUM at 30 June 2009 was $16.0 billion compared to an estimated $15.5 billion at end May 2009 (31 March 2009: $19.0 billion).

Investment performance

Man’s fund of funds business saw positive performance in the quarter, but mixed economic indicators made trading conditions difficult for trend-following strategies such as AHL. These conditions generated a positive investment movement of $0.4 billion in institutional FUM and a negative movement of $1.6 billion in private investor FUM.

FX and other movements

The weakening US dollar drove a positive FX movement of $1.2 billion - $0.7 billion in private investor and $0.5 billion in institutional.

Other movements of a negative $2.1 billion reflect rebalancing of private investor products in light of negative AHL performance ($1.5 billion), and removal of leverage in RMF products prior to redemptions ($0.6 billion). The total amount of external funding into products as at 30 June 2009 was $3.8 billion.

Financial position

Man’s financial position remains strong. As at 30 June 2009 the regulatory capital surplus was $1.8 billion and available liquidity resources totalled around $4.6 billion.

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