Customer Outflows Swell at Man Group

LONDON – Clients continue to pull money out of the Man Group, the world’s largest publicly traded hedge fund, as outflows rose almost 60 percent, to $2.2 billion, in the third quarter, the company said on Thursday.

Sales remained weak because of volatility caused by Europe’s debt crisis and instability in the financial markets, Man said.

“Investor sentiment, and consequently the outlook for flows, continues to be subdued,” Man’s chief executive, Peter Clarke, said in a statement. “The flow environment continues to be challenging and this was reflected in lower sales in the quarter.”

The firm’s funds under management rose 14 percent, to $60 billion, in the third quarter, after it completed the acquisition of the FRM Holdings Group, a rival hedge fund investment manager. The deal gave Man an additional $8.3 billion of funds under management.

The acquisition is the latest attempt by Man to increase assets in its fund of funds business, which have dwindled as many investors have pulled their money from Man in recent months.

Net outflows in the third quarter rose to $2.2 billion from $1.4 billion in the three months ended June 30. Man said the value of its fund had increased $500 million in the third quarter as a result of improving market performance.

In an effort to bolster profitability, the firm has announced plans to cut costs by almost $200 million by the end of 2013. Man also appointed Jonathan Sorrell, a former Goldman Sachs executive, as its new finance director.

Persistent concerns about the company’s financial health, however, have weighed on its share price, which has fallen 33 percent this year.

Man’s shares fell almost 9 percent in afternoon trading in London on Thursday.