Man Group has reported funds under management grew by 35% to $109.1bn by the end of 2017, however margins were depressed by virtue of much of the FUM growth occurring in lower margin areas of business.
There was an 11 basis points drop in the Group’s net management fee margin, compared to the previous year, putting it at 72 basis points by the end of December 2017.
Net revenues were up 33%, with a 7% rise in net management fee revenue to $736m. Adjusted pre-tax profit was $384m, up from $205m.
Net inflows to the business were reported as $12.8bn, up from $1.9bn the previous year. There was a “positive investment movement” of $10.7bn, up from $3.2bn. And the Aalto acquisition last year added $1.8bn to total FUM, the Group said.
Luke Ellis, CEO, noted the record net inflows of $12.8bn, and the 87% increase in adjusted profits. But the results statement also noted that recent market movements have “impacted our investment performance in some areas, particularly for our momentum strategies.”
“However, looking forward Man is well positioned, with strong fundamentals, investment in innovative strategies and a continuing pipeline of interest from clients. As ever, we remain focused on delivering long term investment performance and the highest quality service to our clients.”
For shareholders, the statement also referenced the ongoing policy of paying out dividends and/or instituting share buybacks.
“The Group expects to generate significant surplus capital over time, primarily from net performance fee earnings…Whilst the Board continues to consider dividends as the primary method of returning capital to shareholders, it will continue to execute share repurchases when advantageous.”
“In October 2017, the Board decided to carry out a share repurchase programme for up to $100m to return surplus capital to shareholders. Currently, around $56m worth of shares have been repurchased.”
|Summary financials||Year ended||Year ended|
|Funds under management (end of period)||109.1bn||80.9bn|
|Net management fee revenue||736m||691m|
|Other costs (including asset servicing)||(202m)||(199m)|
|Net finance expense||(9m)||(11m)|
|Adjusted profit before tax||384m||205m|
|Statutory profit / (loss) before tax||272m||(272m)|
|Statutory diluted EPS||15.3c||(15.8)c|
|Adjusted management fee EPS||10.8c||9.0c|
|Dividend per share||7.97p||7.05p|