LONDON – Clients continued to withdraw money from the Man Group in the first quarter, as the world’s largest publicly traded hedge fund announced plans on Friday to buy back almost $500 million of its own debt.
The firm, based in London, has struggled with weak performance during the financial crisis, while outflows from the firm’s investment funds have put pressure on its top management.
Emmanuel Roman, who became chief executive this year, said strong performance in the global equity markets in the first quarter had helped to lift returns for some of the firm’s funds, but a weakening in the bond markets had somewhat hindered their performance.
Man Group investors withdrew $3.7 billion during the first three months of the year, according to a company statement. The firm’s total money under management fell almost 4 percent, to $54.8 billion, over the same time period.
“This was a disappointing quarter from a flows perspective,” Mr. Roman said in a statement. “Investment performance is the lifeblood of our business and in time we expect good performance to translate into flows.”
The bond buyback plan, announced Friday, will save around $78 million in interest payments, the firm said.
Changes last month in how the firm’s capital position was calculated freed up $550 million of extra capital, some of which the firm will use to repurchase the bonds.
The bond buyback program is part of Mr. Roman’s efforts to bolster the firm’s stock price, which has fallen around 60 percent over the last two years. He joined the firm in 2010 after it acquired a rival hedge fund, GLG Partners. Before moving to the top job, Mr. Roman was Man Group’s chief operating officer.
Man Group’s share price rose 9.1 percent in early morning trading in London on Friday.
Earlier this year, the hedge fund imposed a bonus cap for top executives, saying that annual cash bonuses would be no more than 250 percent of individuals’ salaries.