Man Group sees net inflow from private investors

By Laurence Fletcher

LONDON (Reuters) - Man Group (EMG.L), the world's biggest listed hedge fund firm, reported a rise in sales to private investors and said it expects to return to overall net client inflows in its second half, boosting its shares.

In a statement on Thursday, the firm said it attracted net private investor inflows in its first quarter of $1.9 billion (1.1 billion pounds) into its funds, which aim to deliver positive investment returns whether markets rise or fall. This partly offset net outflows of $3.3 billion from institutions such as pension funds.

"This is a significant positive for the company, especially as gross asset gathering has remained strong even during the worst quarters of the credit crunch," analysts at Bank of America/Merrill Lynch said in a research note.

"Man (stock) is far too cheap for a company where (there) is clear evidence that it retains the ability to generate profitable organic growth," the note said.

Shares, which fell on Wednesday to their lowest in more than a month, were up 1.3 percent at 242.5 pence at 1313 GMT, slightly outpacing gains in the FTSE 100 .FTSE and having touched 250p earlier in the session.

Private investors have generally been quicker than institutions to pull their money from the $1.3 trillion hedge fund industry, and slower to return.

NET INFLOWS

At last month's GAIM hedge fund conference in Monaco speakers said the immediate outlook for flows was tough, although institutional investors could re-enter this year.