Top Firm Said Hit With Two Billion Fall In Asset Values Due To Japan Crisis

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The Financial Times reports that London-based Man Group, the world's largest publicly traded hedge fund, is said to have been looking at a $2bn drop in asset values at its flagship algorithmic-based AHL fund in the days following the earthquake, tsunami and nuclear fears in Japan earlier this month.

According to the newspaper, the $22bn fund is understood to have been 'bullishly positioned', and suffered because of 'significant reversals across equity, commodity and currency markets'.

Man said that its overall performance 'turned sharply down with the markets after the Japanese earthquake, but has (since) partially recovered'.

Here's the firm's pre-close trading update for the year ending 31st March, published Tuesday:

Key points – operating

  • Funds under Management (FUM) at 31 March 2011 currently estimated at $69.0 billion (31 December 2010: $68.6 billion)

  • Q4 expected to see net inflows of approximately $0.7 billion, reflecting $5.3 billion sales (predominantly in open ended alternatives and long only) and $4.6 billion redemptions

  • Investment movement flat across the firm in January and February, with positive performance at GLG counterbalancing a negative period for AHL; performance turned sharply down with markets after the Japanese earthquake but has since partially recovered

  • Good progress on strategic objectives: integration of GLG; sale of BlueCrest stake; significant Multi-Manager mandate win

  • Definitive agreement to acquire the remaining 50% of Ore Hill and integrate into GLG.

Key points - financial

  • Statutory profit before tax from continuing operations of an estimated $280 million including the impairment of Multi-Manager goodwill (2010: $541 million); adjusted profit before tax estimated at $560 million (2010: $560 million)

  • Diluted statutory EPS from continuing operations of an estimated 7.5 cents per share (2010: 24.8 cents per share); adjusted EPS of an estimated 24 cents per share (2010: 25.5 cents per share)

  • Financial position remains strong; regulatory capital surplus of around $350 million increases to around $850 million with BlueCrest proceeds; net cash including the BlueCrest proceeds of $900 million.

To view the full press release please download the PDF

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