Robust performance by Man Group’s suite of absolute return strategies in a challenging first three months of the year have propelled the London-listed active investment manager’s assets under management to a record high of more than USD150 billion as at the end of March.
The group’s first-quarter trading statement shows that positive performance from its alternative investment strategies in the first three months of 2022 offset losses and negative market beta in its long-only strategies – while USD3 billion of the USD3.1 billion of net inflows that the firm recorded in Q1 came from the alternatives side of the business.
Total AUM in the firm’s alternatives suite – comprising absolute return, total return, and multi-manager products – had grown from USD91.6 billion at the end of December 2021 to USD96.9 billion by the end of March.
This increase of USD5.3 billion more than compensated for a USD2.5 billion decrease in the AUM across the group’s long-only systematic and discretionary strategies over the same period – further increasing the share of Man’s groupwide AUM of USD151.4 billion that is represented by alternative strategies to 64 per cent, up from just under 62 per cent at the end of 2021.
Within the alternatives suite, returns and inflows were driven by the firm’s absolute return strategies – with Man’s absolute return AUM swelling by almost USD5 billion in the first quarter of the year, from USD41.2 billion at year-end to USD46 billion as of 31 March.
Hedge fund strategies led the way, with all of the group’s absolute return products registering positive returns in a three-month period that was marked by elevated global market volatility and fast-escalating geo-political and macro-economic pressures – with the broader HFRX Global Hedge Fund Index down by 1.4 per cent in a quarter that saw many other hedge funds stumble.
The firm’s long-established AHL systematic managed futures engine delivered the best performance – with AHL Diversified up by almost 12 per cent, and AHL Alpha up by 7 per cent, in a strong quarter for managed futures strategies generally that resulted in a 9.5 per cent Q1 gain for the Barclay BTOP50 Index.
But the challenging market environment resulting from the Russia-Ukraine conflict and the global inflation surge took its toll on some of the group’s long-only strategies. This was most notable in Europe and the emerging markets, with the systematic Numeric Europe Core and Numeric Emerging Markets Core strategies both falling more than 5.5 per cent in Q1, and the discretionary GLG Continental European Growth fund tumbling by almost 15 per cent over the first three months of 2022.
Underlining the strong recent performance in Man’s absolute return business – which comprises the most profitable and highest-margin area of the group’s activities – assets under management in the absolute return suite have grown by 30 per cent over the past 12 months, compared with an overall increase of just under 20 per cent in groupwide AUM over the same period.