Man Group’s flagship fund, AHL Diversified, lost investors 11.2 per cent of their money in first five months of the year, as the world’s largest listed hedge fund manager missed out on the sector’s wider recovery.

The losses at the $20 billion fund, whose investors are mainly the super-rich, came as the worldwide hedge fund industry posted its best performance figures in a decade.

According to Hedge Fund Research (HFR), a Chicago-based expert on the market, hedge funds returned 9.41 per cent in the first half.

This is the best first half for the sector since 1999, when hedge funds returned 12.9 per cent.

HFR’s figures, published today, underscore the recovery in hedge funds, which lost investors 19.04 per cent last year. Globally, the sector plunged to its second annual loss in a decade.

AHL is a managed futures fund that takes big directional bets in oil, commodities, currencies, credit and equity indices.

Its investors are drawn from the ranks of the rich, mainly in Japan, Australia, the Middle East and Latin America.

AHL continued to post losses in April and May, sliding 3.6 per cent, Man said today, even as hedge funds globally benefited from a market bounce that began in March.

Man-IP 220, which gives investors exposure to AHL alongside a collection of funds of hedge funds, also fell, down 12 per cent for the calendar year to May 31.

Man’s RMF Four Seasons strategies rose 0.9 per cent over the period.

It came as private investors ploughed a net $1.9 billion into Man funds during the three months to the end of June.

The inflows helped balance a string of redemptions by institutional investors, who withdrew a net $3.3 billion.

Man said in a quarterly trading update today that, at the end of June, total funds under management stood at $43.3 billion, compared with $44 billion at the end of May.

Peter Clarke, the chief executive, said that the institutional outflows during the three months to the end of June had been less than feared.

He suggested that Man had subsequently stemmed the decline, with second quarter redemptions likely to fall to around $1.8 billion.

He said that he was pleased with the renewed interest in hedge funds being shown by individual investors, but said that mixed economic indicators had meant that directional strategies such as AHL had had a tough time.

Man shares edged 0.5 per cent higher, up 1.25p at 240.5p.

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