Shares of Man Group declined on Thursday after the hedge fund disclosed that a client withdrew $6.1 billion from one of its strategies in the first quarter.
The outflow contributed to stagnation in the firm’s total assets under management during the period.
The London-listed company’s shares dropped as much as 7% in early trading before trimming losses to trade around 5% lower on the day.
Despite the decline, the stock remains up approximately 9% so far this year.
Assets under management miss expectations
Man Group reported that its total AUM remained largely unchanged at $228.7 billion in the first quarter, falling short of analyst expectations.
The quarter was marked by heightened volatility linked to geopolitical tensions stemming from the Iran war, which weighed on investment performance and flows.
Analysts had expected the hedge fund’s assets to increase to $233 billion, up from $227.6 billion at the end of December, according to a note from Morgan Stanley cited in a Reuters report.
Net outflows driven by single client withdrawal
The company disclosed in a footnote that a single client redeemed $6.1 billion from its long-only systematic equity strategy.
Man Group declined to comment on the outflows.
Overall, investors withdrew a net $1.6 billion from the hedge fund during the quarter.
However, gains in several funds along with other client inflows helped offset part of the redemptions.
The outflows marked the largest since 2024, when the firm also experienced a significant withdrawal from a single client.
Mixed fund performance impacts results
Man Group’s long-only fund performance was mixed during the quarter, with some strategies posting losses.
The Man Continental European Growth fund recorded a negative return of 10% as of March 31.
Meanwhile, the firm’s long-only credit strategies delivered flat performance but attracted net inflows of $2.2 billion.
This came amid ongoing concerns among global investors regarding the health of private credit markets this year.
Volatile market conditions weigh on hedge funds
The broader hedge fund industry has faced turbulent market conditions in recent months.
Trading has been disrupted by volatility following the closure of the Strait of Hormuz in early March, which affected global energy supplies and heightened recession concerns.
This environment has led to divergent performance across hedge fund strategies.
Systematic hedge funds, which rely on algorithm-driven trading, have performed relatively well, delivering average returns of over 7% through the end of March, according to Societe Generale.
In contrast, hedge funds tracked by research firm PivotalPath posted returns of around 1% over the same period.
Outlook remains uncertain amid volatility
While Man Group’s AUM has grown in recent years, the first-quarter results highlight the sensitivity of hedge funds to large client movements and volatile market conditions.
The firm’s ability to attract inflows and deliver consistent performance across strategies will remain closely watched by investors in the coming quarters.
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