Offshore Capitalist

Institutions punish Man – although not as much as some expected

Institutional investors have pulled nearly a third of their money from Man Group’s funds this year, after the reputation of the listed hedge fund manager suffered from investing in two funds linked to Bernard Madoff.

However, the size of the redemptions are not yet as large as predicted by a Morgan Stanley analyst, who said that 43% of the assets in Man’s institutional fund manager would leave in 2009.

The world’s largest investor in hedge funds reported in its half-year results that its institutional business managed $14.7bn (€9.9bn) at September 30. This compares to the the $21bn it ran at the end of last year.

Man’s latest financial statement showed institutional investors pulled $1.7bn from it in the quarter to September 30. This is in addition to the $3.6bn pulled from it in the previous quarter. This was partly offset by $700m of sales to institutional investors over the six month period. Meanwhile, Man still has a further $700m of redemption requests for 31 December from institutions, it said today.

The redemption requests have been mainly coming in since December of last year, when Man’s institutional fund manager, RMF, revealed it had invested $360m in two funds linked to Madoff, who was imprisoned this year for 150 years for operating a $65bn Ponzi scheme.

via Institutions punish Man – although not as much as some expected.

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