Man Group assets drop, confirms FSA arrest

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February 28, 2013 6:42 PM EST

Man Group posted falling assets under management and confirmed the arrest of an employee at the centre of Britain's latest insider dealing probe, in Emmanuel Roman's first annual results since taking the helm at the hedge fund firm.

Man, whose share price is down by around two-thirds since the start of 2011 on the back of client outflows and poor fund performance, said assets fell 8 percent to $55 billion from end-September.

Clients pulled out $2.7 billion in the final quarter of 2012, better than RBC's forecast of $3.1 billion, while withdrawals continued into 2013, the firm said.

The underwhelming results compounded news that an analyst employed within its GLG unit was arrested by the Financial Services Authority on Wednesday on suspicion of insider dealing.

"Man has been informed by the FSA that the investigation concerns the individual's actions as a private individual and not as an employee of Man or GLG," a spokeswoman said.

Neither Man nor GLG is the subject of the investigation and employee has been suspended, the spokeswoman added.

Man also wrote down the goodwill on its controversial 2010 acquisition of rival GLG by a further $746 million, after $233 million last year, roughly in line with expectations.

The outflows at Man, which has had net customer outflows in every quarter over the four years to September 2012, apart from two quarters in the first half of 2011, highlight the scale of the task facing new Chief Executive Roman as he tries to revive the embattled fund manager.

Earlier this month Man appointed a new head of its struggling flagship hedge fund, as part of sweeping changes under incoming CEO Roman to revive investment performance and win back clients to the embattled hedge fund firm.

(Reporting by Laurence Fletcher, editing by Sinead Cruise)

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