Man Group suffers client outflows, plans more job cuts

Wed Jan 18, 2012 7:00am EST
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By Laurence Fletcher

LONDON (Reuters) - Man Group Plc (EMG.L: Quote) announced further job cuts on Wednesday after suffering heavy client exits, as the world's biggest listed hedge fund manager was hit by poor returns from its flagship fund and investor nerves over choppy financial markets.

The company, which shocked investors in September when it reported its fastest rate of outflows since early 2009, said clients pulled out a net $2.5 billion of their money over the three months through December, roughly in line with analyst forecasts.

"We are seeing investors respond to performance and market sentiment," Chief Executive Peter Clarke told reporters, although he added that net outflows slowed last month and were "markedly less than a third" of total outflows for the quarter.

Analyst David McCann at brokerage Numis said: "Whilst flows have improved it's still not exactly what you call great ... It's hard to really see any great news on the horizon but then again I don't think you need to have any great news given the (depressed share) price."

Man, whose shares rallied 4.6 percent to 112.95 pence by 0933 GMT, having slumped from around 300p a year ago, also said it would cut an extra $75 million from costs on top of previously-announced savings of $40 million.

Clarke said the cuts, which amount to around 10 percent of Man's cost base, would be made across the board and would involve job cuts, although he declined to give further details.

The job losses are in addition to 400 jobs that Man has been cutting after its takeover of GLG.

"(The) numbers (were) bang in line with reduced expectations, but cost savings are an unexpected positive," said Citi analyst Haley Tam in a note.   Continued...