By Scott Kanowsky
Investing.com -- Man Group PLC (LON:EMG) shares saw their biggest jump since 2020 on Tuesday after the world's largest publicly traded hedge fund defied industry-wide trends to post strong annual net inflows and announce new share buybacks.
Investment management businesses struggled throughout 2022, as fears over a widespread economic recession sparked by elevated inflation led to a downturn in stock markets. Revenues across the industry dropped last year, with the fall in stocks hitting management and performance fees.
However, Man Group pulled in $3.1 billion for the year ended on December 31, which it said was 5.3% ahead of its sector peers. Assets under management of $143.3B at the end of December were 4% lower than the final day of the prior year, although both management and performance fees grew ahead of Bloomberg consensus estimates.
As a result, core net revenue rose by 14% year-on-year to $1.7B, helping push adjusted 2022 pre-tax profit up to a better-than-expected mark of $779M.
In a statement, Chief Executive Officer Luke Ellis said the outperformance was due to "[o]ur unwavering focus on building strong client relationships globally, together with the range of innovative investment strategies and solutions we offer."
"This was despite clear headwinds elsewhere in the asset management industry," Ellis added.
Man Group subsequently proposed a final dividend for 2022 of 10.1 cents per share, which translates to buybacks worth around $125M. Over the past five years, the company has returned $900M to shareholders through dividends and announced $1.0B in share repurchases.
Analysts at Credit Suisse noted that they see "scope for significant further buybacks this year" at Man Group thanks to resilient overall flows and solid fee generation.