Japan hits sales at Man while tech-heavy Polar also suffers outflows

Man Group expects investors to continue adjusting allocations in Q2

Polar

Retail investors pulling money from Japanese equities hit Man Group sales in Q4 although market movements helped offset net outflows across the business.

Despite investors pulling $700m (£535m), funds under management (FUM) grew 4% to $112.3bn during Q1.

Investors pulled $700m from its absolute return funds and $2.1bn from its long-only funds. In the discretionary space, the global, Japanese and US equity strategies led $1.8bn outflows.

However, market movements helped FUM rise 4% from $108.5bn in December 2018 to $112.3bn.

Luke Ellis, chief executive officer of Man Group, said strong performance in their quant alternative strategies also aided the assets growth over the period.

Ellis said: “The investment performance more than offset the previously indicated outflows in the quarter, which were concentrated in discretionary long only, including European retail investors reducing exposure to Japan and institutional clients reducing exposure to global equities. While we expect clients to continue adjusting their portfolio allocations during the second quarter, we see ongoing engagement with clients on new mandates and, in particular, continuing strong demand for our total return strategies.”

Polar Capital recovers from tech sell-off

Meanwhile, Polar Capital reported a 15% increase in assets under management (AUM) over Q1 from £12.7bn to £13.8bn.

However, over the 12-month period the group suffered redemptions and “material fluctuations”. Inflows in the six months to September were £932m but investors pulled £286m in the last three months of 2018. Outflows remained in the first three months of 2019, albeit at a lower level of £90m.

Before the market sell-off in October, AUM reached an all-time high of £14.7bn in September but this declined to £12.7bn by the end of 2018 following the correction.

Gavin Rochussen (pictured), chief executive, said: “Net flows have stabilised and funds have continued to perform in line with our expectation, with 76% of the Group’s AUM ahead of their benchmarks annualised over three years to 31 March 2019. In the last quarter, the majority of AUM and fund strategies outperformed their respective benchmarks.

“Market volatility is expected to remain as political tensions continue and as Brexit, with an unpredictable outcome, runs its course.”

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