The company describes growth in funds under management as “an important measure of our ability to retain and attract investor capital. Funds under management drive our financial performance in terms of management fees and our capacity to earn performance fees.”
Chief executive Peter Clarke added: "Against a turbulent market and economic background, Man’s funds under management have declined in the period principally as a result of continued net outflows and the deleveraging of our guaranteed products. The result is a marked decline in underlying profitability which, after goodwill impairments, produced a statutory loss.”
The de-gearing of guaranteed products contributed -$2.5bn alongside $9.6bn of redemptions, investment movement of -$0.3bn and -$0.5bn in FX transactions. Sales amounted to $7.2bn.
The pre-tax statutory loss that Clarke refers to is $164m for the six months to the end of June 2012 compared to a £70m profit 12 months earlier.
The statement giving the results finished with an announcement of a corporate restructure for Man Group plc “to access distributable reserves, which will provide it with ongoing flexibility to continue its previously stated dividend payment policy.”
The interim dividend will be 9.5 pence, with a total dividend for 2012 expected to be 22%.
The proposals will create a new listed non-trading group holding company called "New Holdco" that will be listed on the London Stock Exchange. Shareholders will be able to exchange their existing ordinary shares in Man Group plc for shares in New Holdco on a one-for-one basis.
Any change is still subject to FSA and shareholder approval at a separate general meeting towards the end of the year.
Further net gains will come from $95m of operating cost savings, announced in March, 2012 with further annual cost savings announced today of $100m over the coming 18 months.
Clarke concluded: "We have made progress in the last six months to address costs across our business and we continue to expand our investment management capabilities both organically and through acquisition.
"Our focus is on delivering attractive levels of profitability from our liquid, open-ended investment strategies and so reducing reliance on high margin guaranteed product which is seeing subdued demand. To align our infrastructure appropriately to this dynamic in the business, we have today announced further cost savings of $100 million, to be achieved over the next 18 months.”
