Man Group suffered a fall in core pre-tax profit from $395m to $137m during the first six months of 2023, compared to the same time frame last year.
Core net revenue came in at $513m to the end of June this year, compared to $855m during the first six months of 2022. This marks a 40% decrease.
While net management fee revenue only dipped slightly from $469m to $460m, core performance fees tumbled by 92% from $404m to $32m. The firm said this reflects a “difficult first quarter for trend-following absolute return strategies”.
Investment performance was positive, however, bringing in $5.1bn for the business which, according to the firm, is 0.6% ahead of its average peer. Relative net flows came in at $2.6bn, while assets under management ticked up to $151.7bn, compared to $142.3bn during the first six months of last year. This marks a record AUM for the business.
CEO Luke Ellis, who will step down from the role in September, said: “The first half of 2023 was a period of sustained organic growth for Man Group and I’m delighted to report record assets under management of $151.7bn, and net inflows of $2.6bn.
“These flows were 2.5% ahead of the industry, highlighting the broad-based demand we are seeing for the range of differentiated investment strategies and solutions that we offer, as well as the quality of our longstanding relationships with allocators around the world.”
Ellis, who will soon hand the reins over to Man Group president Robyn Grew, added that it has “been a great privilege leading Man Group during a period of major evolution and progression”.
“Through our unwavering focus on investment performance and client service, alongside investing strategically in our technology, the business has grown and diversified significantly since my appointment. I have no doubt that the firm will continue to go from strength to strength under Robyn’s leadership, building on our position at the forefront of the industry.”
US-based Grew said: “I want to say again how honoured I feel to be the next CEO of Man Group. I have huge confidence in the talented group of people here and our ability to continue to deliver for clients and shareholders.
“We have built a tremendous business with a fantastically collegiate culture over the past few years, one that is truly a global leader in active investment management.”
She added that diversifying the business’s client offering has been a “priority for the firm”, which is why Man Group acquired Varagon Capital Partners last month. The US private credit firm will be renamed Man Varagon.
“The private credit market continues to grow in relevance for the world’s largest institutions, this transaction adds a US-focused direct lending strategy designed to provide consistent risk-adjusted outperformance at scale and in a highly customisable format,” Grew explained.
“Varagon has a strong track record of underwriting discipline, risk management and generating differentiated returns for investors; this gives us confidence in our ability to support their continued growth as a part of Man Group.”
