LONDON (Reuters) - Man Group (EMG.L) said on Thursday client assets had continued to fall after dropping by more than a third in the 12 months to March, sending shares in the world’s largest listed hedge fund firm sharply lower.
At 0829 GMT, Man’s shares were down 9.6 percent at 226 pence after the group said that fee income -- which is partly based on assets under management -- would be hit.
Assets under management fell to $44 billion (27.6 billion pounds) by May 26, compared with $46.8 billion at end-March when its financial year closed, and $74.6 billion one year earlier, the firm said.
The group had lost $0.9 billion in the brief period between its March 26 trading update and the close of the quarter, due to poor performance and negative currency effects.
“The fall in assets under management is probably due to weak investment performance and institutional outflows,” said UBS analyst Carolyn Dorrett, who rates the shares a sell, in a note.
Fund management companies can earn fees both on the amount of assets they run and the performance they generate.
During the year, Man’s RMF Four Seasons strategy, which was exposed to U.S. fraudster Bernard Madoff, lost 15.6 percent, while its Glenwood product lost 16.7 percent and its multi-strategy Man-IP 2202 fell 8.3 percent.
“Obviously this was not the performance we or our investors were expecting from the product range,” Clarke said.
Net outflows from institutional investors were $4.3 billion, while net inflows from private investors were $2.2 billion.
Since March, institutional net outflows were over $3 billion, Clarke said, while private investor net inflows were around $1.8 billion.
Full-year profit before tax and adjusting items was $1.2 billion, in line with its guidance in March and down from $2.1 billion a year ago, the firm said.
(editing by John Stonestreet)