Man Group has posted a pre-tax statutory loss of $272m (£221m) for 2016 on the back of outflows and poor performance from asset management arm GLG.
At the end of 2015, Man Group announced a pre-tax profit of $184m.
Luke Ellis, CEO of Man Group, says 2016 was “a difficult year for GLG”.
“This is evident with the $281m impairment of GLG’s goodwill and intangibles, which reflects the lower funds under management and management and performance fee revenue,” Ellis says. “GLG’s performance has been variable in recent years and this resulted in continued outflows during 2016, although these did moderate in the fourth quarter as performance improved.”
GLG’s funds under management dropped from $30.5bn at the end of 2015 to $26.7bn at the end of 2016.
Ellis adds: “At GLG, we believe we have a sustainable advantage in identifying teams and commercialising new strategies but we need to improve the consistency of GLG’s performance.”
The CEO says the three new emerging markets debt strategies, launched in Q2 2016, have performed well despite the emerging market sell-off, and have seen inflows of over $1bn.
However the alternative strategies underperformed the HFRX index despite ending the year in positive territory, while the flagship Equity Long Short strategy lost 1.4 per cent over the year following weak performance in the first half of 2016, leading to net outflows of $3bn over the year.
Man Group’s funds under Management were up 3 per cent to $80.9bn at the end of 2016, compared to $78.7bn at the end of 2015, with net inflows of $1.9bn compared to $0.3bn the previous year.