Clients withdraw $1.8bn from Man

Man Group caught the market by surprise yesterday when it revealed an unusually high rate of private client redemptions from its funds in the last quarter.

Shares in Man fell 21½p to 507p after it said private investors withdrew $1.8bn (£919m) in the three months to the end of the year, the highest level seen for several years.

Philip Middleton, an analyst at Merrill Lynch, said quarterly outflows from the retail funds were "higher than usual" for Man, the world's largest hedge-fund manager. Several other analysts said outflows from Man boded ill for other asset managers selling funds to private investors.

Man's net funds belonging to private investors rose

2.7 per cent in the last quarter to $42bn and the group's total funds under management rose 4.6 per cent to $71.7bn from $68.6bn in September. "But the rate of [private client] redemptions was disappointing and not what I expected," said one analyst. "[Retail] redemption rates at Man have been rock solid for so long."

He thought the outflows were caused by widespread uncertainty after the market turbulence during the summer, when the failure of some hedge funds prompted fears of redemptions and a slowdown in sales.

The value of Man's flagship AHL fund, which uses computers to spot trends in futures markets and has more than $20bn in funds under management, grew

5.1 per cent in the three months to December. Assets in RMF, Man's $25bn fund of funds business, rose

2.7 per cent in the quarter. Glenwood, the smaller US fund of hedge funds business, rose 1.7 per cent.

Institutional investors withdrew $1.8bn from Man funds but outflows were offset by sales of $4.2bn and the impact of market performance and currency translation worth a further $2.5bn.

Separately, Charlemagne Capital, a specialist emerging market fund manager, said its assets under management rose 40 per cent to $6.5bn in the year to December, with revenues increasing 48 per cent to $135.4m.