Shares in Man Group jump 6.6 percent, topping the FTSE 100 leaderboard, with the index up 0.2 percent, as the hedge fund manager posts full-year results that client outflows slowed and assets rose, and revises its dividend policy, prompting Oriel Securities to repeat its “add” rating.
Man Group says its assets under management rose to an estimated $59.5 billion at end-Feb., up from $58.4 billion at end-December.
The firm intends to pay out 100 percent of adjusted management fee earnings each year in ordinary dividends and says it would also distribute net performance fee earnings over time by way of special dividends and/or share buybacks.
Oriel points out that Man Group’s results for 9 months are as flagged in its January update, with the firm’s full-year 2012 outlook showing improved investor sentiment and lower redemptions.
The broker notes that Man Group shares have massively underperformed on a 1 year view (-52 percent relative) but have been rallying recently off their low point (+9 percent relative).
Oriel says that Man Group’s valuation is attractive on earnings and on yield, and although there will be sustainability issues on its dividend, which would be only 1 times covered, the firm has surplus cash.
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