Man Group PLC reported that its full-year profit will plummet to around US$1.2 billion, but investors cheered that the hedge fund group's estimate is in line with market expectations and that it is maintaining the dividend level.
In a pre-close trading update ahead of the March 31 year-end, it said pretax profit before exceptionals is expected to fall from the US$2.1 billion reported at the same time in 2008. Man is maintaining the final dividend at 24.8 cents per share, giving a total for the year of 44 cents.
Shares rose more than 10 percent on the news in early trade, with analysts saying that the market was pleasantly surprised by the figures, considering what the hedge fund sector has been through lately.
Private investor redemptions for the year are an estimated US$9.1 billion giving net inflows of US$2.0 billion for the period, the company said. Net outflows from institutional investors stood at US$4.2 billion in the full-year.
Total funds under management are currently estimated to be US$47.7 billion as at March 31 2009, down from US$74.6 billion in March 2008 and $53.3 billion at December 31 2008.
Markets remain volatile and uncertain, and investors across all asset classes continue to be cautious against a backdrop of sharply reduced expectations for the global economy, Man said.
It has a number of regional and global private investor products in the pipeline which are due to close, or start trading, early in the first quarter of next financial year.
Institutional investors remain cautious about committing incremental capital to markets, and institutional sales are likely to remain very subdued in the first half, it added.