Man Group trade algorithms wrongfooted

MAN GROUP profits have tumbled after some of the hedge fund’s automated trading algorithms were wrongfooted by last year’s market turmoil.

Pre-tax profits at the world’s largest listed hedge fund fell 60pc from $745m (£589m) to $279m last year after a substantial slide in performance fees, which it earns from clients when its investments beat certain benchmarks.

Some of Man’s absolute return funds, which had made big gains in 2022, failed to deliver similar profits last year amid choppy market conditions. Man Group employs computer-driven trading strategies that follow market trends. These “quant funds” struggled to adapt to the rapid changes in the market.

That led to lower returns and performance fees sliding 77pc to $180m as a result. However, shares rose 2pc after the company unveiled a $50m buyback. Analysts at Citigroup called the numbers a “resilient set of results”.

Man chief executive Robyn Grew said: “Despite some strategies being softer in their performance, we still put $180m of performance fees back into the organisation and that’s a reflection of high-quality return on long-only and alternative content [investment strategies] that sits across the organisation.”

Ms Grew took over the helm of Man Group last May from Luke Ellis.

One of her first big moves was to drop the GLG Partners hedge fund brand from the company’s name. Ms Grew said the change was meant to “simplify how people understand the organisation”. GLG was bought by Man for $1.6bn more than a decade ago. Man’s assets under management grew to $167.5bn last year, up from $143.3bn.