Man Group has reversed its position on charging clients for external analyst research and will now absorb the costs itself, the world’s largest publicly-traded hedge fund said as it reported a rise in assets in the third quarter.
The FTSE 250 listed group managed $103.5bn at the end of September, up from $95.9bn at the end of June. Analysts had expected assets to top the three figure mark by the end of the year.
Man Group also said in its trading statement that it intended to absorb the cost of paying for external research itself when sweeping new financial reforms, known as Mifid II, come into force in January – a departure from its previous stance, reported by the FT, that it would pass these costs onto clients. It said the decision would cost it between $10m and $15m.
The majority of large asset managers who have confirmed decisions have said they will absorb the cost of research themselves.
Driving the rise in assets were net inflows of $2.8bn in the quarter, positive investment performance which accounted for $3.3bn and foreign exchange movements which benefitted Man Group by $900m.
Luke Ellis, chief executive of Man Group, said:
The third quarter of 2017 was a period of strong alpha generation for Man, with positive performance across the firm. As expected the pace of inflows and the level of margin compression both moderated during the quarter.
Inflows remained strong overall and were focussed on some of our newer strategies, in particular alternative risk premia. We devote significant efforts to developing innovative solutions, and we are pleased to see our clients’ enthusiasm for these newer offerings.
Looking forward we continue to see a decent level of interest from clients, with our normal caveat that flows are likely to be uneven quarter to quarter.