Man Group PLC on Friday said it ended 2018 with a smaller pile of funds under management than it started the year, due to a “difficult” and “volatile” year but, nonetheless, still managed to increase its dividend payout.
The FTSE 250-listed wealth manager proposed a final dividend of 5.4 US cents per share, giving a total dividend of 11.8 cents, a 9.3% increase on the 10.8 cents distributed in 2017. The company’s dividend policy is to pay 100% of adjusted management fee earnings per share.
At the end of 2018, Man Group had USD108.5 billion funds under management, down from the USD109.1 billion under management twelve months ago.
The fund manager recorded USD10.8 billion net inflows in 2018 compared to USD12.8 billion in 2017.
Man Group suffered a negative net investment movement of USD7.7 billion during all of 2018 – losing USD6.9 billion in the fourth quarter alone – compared to a net investment gain of USD10.7 billion in all of 2017.
The company also suffered a USD3.7 billion foreign exchange and other movements loss in 2018 compared to a USD2.9 billion gain in 2017.
Man Group’s Alternative funds under management ended the year 5.2% higher at USD64.9 billion, with the total return asset class performing best with a 36% rise, offset by Absolute Returns and Multi-Manager Solutions falling 1.0% and 16%, respectively.
The company’s Long Only funds decreased 7.8% to USD43.5 billion, seeing both its systematic and discretionary assets fall. The Long Only funds suffered a USD6.6 billion investment market loss in the year.
Man Group attributed the decreases to “bouts of volatility” – in particular the crises’ in Turkey and Argentina and slowing growth in China and Europe.
“2018 was a more difficult year for the asset management industry, characterised by periods of higher volatility which impacted performance across asset classes and investment styles. Against this backdrop we reported a decrease in performance fee profits but are pleased to have once again outperformed peers and made continued progress in areas we can influence. We have managed costs while investing for growth, further diversified to capture new opportunities and strengthened client relationships, helping us to achieve broad based net inflows,” said Chief Executive Luke Ellis.
Man Group’s pretax profit increased 2.2% to USD278 million from USD272 million. The company’s net revenue decreased 15% to USD913 from USD1.07 billion.
The wealth manager’s net management revenue rose 7.5% to USD791 million.
Man Group cut total costs by 2.8% to USD657 million from USD676 million.
Ellis added: “Looking ahead, we have had a healthy number of new mandate wins but as clients respond to changes in the market and adjust their portfolios we have also seen a pick-up in redemptions. I remain confident that Man Group is structurally well positioned for the future with compelling investment propositions, deep client relationships and a competitive advantage in our experience of using financial technology to drive investment returns.”