ii view: record fund inflows buoy Man Group

Third-quarter trading update to 30 September

• Asset under management of $213.9 billion, up from $193.3 billion on 30 June

ii round-up:

Man Group (LSE:EMG) today detailed business performance that beat City expectations, driven by record inflows for the hedge fund manager’s long-only discretionary funds.

Assets under management rose 11% from late June and 22% from a year ago to $213.9 billion (£159.60 billion). Analysts had forecast total assets of $201 billion, up from the prior quarter’s $193.3 billion. 

Shares in the FTSE 250 company rose 6% in UK trading having come into this latest news down around 12% so far in 2025. They've now recovered much of the ground lost during the tariff slump in April. The FTSE 250 index is up 5% this year and big dividend payer M&G Ordinary Shares (LSE:MNG) has gained more than a quarter. 

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Man Group’s managed funds are split relatively evenly between alternative investment strategies, some with the ability to go short, and more traditional long-only or buy and hold funds. 

Net flows into long-only related funds totalled $10.7 billion compared to City forecasts of $2.23 billion. Net monies leaving alternative strategy funds of $1 billion exceeded analyst forecasts of $0.3 billion. Overall, Q3 net flows were $9.7 billion.

Despite fund outflows, investment performance for Man Group’s alternative funds broadly improved during the quarter. Alternative funds generally generate higher profit margins than their long-only counterparts. 

Broker UBS reiterated its ‘buy’ stance on the shares post the update. 

ii view:

Man Group has a history dating back over 200 years. Today, and with more than 25 years of experience in global investment management, it employs over 1,700 people. Management believes that technology will play a key role in the future of active management. Its commitment to research in this area is highlighted by a collaboration with the University of Oxford on machine learning techniques.  

For investors, the rise of AI is likely to see more rivals adopting computers to help manage money. Competition across the asset management industry remains intense. Costs for businesses and particularly wages remain elevated, while a forecast price/earnings (PE) ratio above the three- and ten-year averages may suggest the shares are not obviously cheap. 

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To the upside, product variation and the use of computers to help manage active funds help set it apart from rivals, while performance fees sit alongside more standard management fees. A robust balance sheet includes net tangible assets of $674 million as of late June, while shareholder returns have included periodic share buybacks. 

On balance, and despite ongoing risks, a forecast dividend yield of around 7% is likely to see fans of this differentiated fund manager remaining supportive. 

Positives: 

• Diversity of investment strategies
• Attractive dividend yield (not guaranteed)

Negatives:

• Intense industry competition 
• Foreign exchange movements can hinder 

The average rating of stock market analysts:

Buy