Hedge fund Man Group disappointed investors with pre-tax losses of $272m for 2016 Wednesday, largely driven by accounting write downs at the company’s discretionary investments arm, GLG, and at FRM, Man’s fund of funds business.

Performance fee revenues were down to $81m, compared to $302m in 2015, with declines across all divisions.

The FTSE 250 investments behemoth managed $80.9bn of funds, up 3 per cent, compared to last year when it managed $78.7bn.

Luke Ellis, chief executive officer, at Man Group, said:

2016 was a challenging year for the investment management industry and despite respectable relative performance from our strategies, this is reflected in our results.

Man said that its market environment was “very unforgiving for the first three quarters and found it difficult to generate performance for clients and performance fees, which led to disappointing profits.

The investment manager pointed to lower levels of funds under management, less performance fees, and declining revenues as the main causes of GLG’s under-performance.

GLG delivered performance, which the company said was “variable in recent years and this resulted in continued outflows during 2016, although these moderated in the fourth quarter as performance improved.”

Meanwhile, Man Group’s Quant division, AHL, which uses computer algorithms to make money instead of fund managers’ making investment decisions, fared better. Man said “AHL, continued to perform strongly as one of the best performing large CTAs, ending the year +6.2 per cent.”

Net management fee revenues came in at $691m for the year, 9 per cent lower than the previous year. According to the chief financial officer’s review, the decline was a result of lower management fee revenues for GLG, decreased funds under management, and declines in the company’s higher margin products.

Full story: Man Group disappoints investors: City A.M.