Hedge fund giant Man surges ahead on new dividend plan
Friday 02 March 2012
The world's biggest hedge fund manager, Man Group, yesterday saw its shares shoot up by 13 per cent, after the pace at which customers withdrew funds slowed dramatically and it launched a new way of paying dividends.
Peter Clarke, chief executive of Man, said it would pay out in dividends 100 per cent of its annual management fee – the steadiest part of its income. It will then top up that dividend with payments from its performance fee. These are volatile as funds' returns swing dramatically from year to year. Management fees would only fall if Man suffered a dramatic exodus of clients.
It said the management fee is currently adequate to pay a dividend of 22 cents a share for this calendar year. Investors could then get a bigger payout if the funds perform well.
Shares have halved in the past year due to concerns about outflows of funds.
However, they rose to $59.5bn (£37.3bn) at the end of February from $58.4bn in December.
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