Man Group profit surges 60 percent

By Simon Challis

LONDON (Reuters) - Man Group, the world's biggest listed hedge fund company, posted a 60 percent rise in annual profit on Thursday, riding turbulent financial markets to show strong growth in funds under management which fuelled record management fees.

Chief Executive Peter Clarke told Reuters a key part of the firm's strong results stemmed from the performance of its AHL futures business, which, with no exposure to equities, proved particularly successful during the intense volatility in stock markets over the past nine months.

"Diversification and low correlation is a key to surviving these markets," Clarke said.

Man's conservative product range with low leverage had also seen it attract funds as fears intensify over the gearing of other hedge funds at a time when the credit crisis bites harder.

Man made profit before tax from continuing operations of $2.08 billion (1.06 billion pounds) in the year ended March 31, driven by a 161 percent increase in net performance-fee income. It made $1.3 billion the previous year.

Funds under management rose 21 percent to $74.6 billion by the end of the period and rose further in the first two months of the current financial year to stand at an estimated $78.5 billion at the end of May, including the launch of a new $1 billion Asian fund.

NEW WEALTH BOOSTS SALES

It won more institutional business in the United States and Clarke also attributed its strong sales -- which at $16 billion equalled 2007's record performance -- to its geographic reach, with mature business in Asia Pacific and the Middle East.