Man Group to sue over Madoff losses

Even before the Madoff fiasco, we knew that Man Group was in pain. Today the hedge fund today showed us how much.

Stripping all of the leverage out of Man Global Strategies, one of its flagship funds, has cut assets under management at Man by $9.7 billion in just three months.

Between October and the end of December last year, a further $3.8 billion of wealthy individuals withdrew their assets, joined by $2.5 billion of institutional money.

That leaves Man's funds under management down more than a fifth at $53.3 billion - still in the hedge fund super-league but no longer unassailable.

It is of little surprise that investors marked down Man's shares by more than 6 per cent, as they adjust to the new reality that hedge fund investments can now go down as well as up.

Yet there are some bright spots. Sales to private investors over the fourth quarter were actually quite strong, at $2.7 billion, particulary against very flat sales to hedge fund investors in the City.

While some of Man's funds will inevitably have suffered, some of its other offerings have outperformed. Take AHL, the managed futures fund, for example, up a quarter over the full year.

With evidence beginning to emerge that hedge funds rebounded strongly in December, and the returns from cash on deposit at historic lows, it is still too early to sound the death knell for alternative asset management.

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