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10 Nov 2006

Man Group Gains Higher than Forecast

Overall gains at Man Group, the world’s largest listed hedge fund, were higher than the company forecast. Sales for the six-month period came in at $10.6 billion, compared with the $10.4 billion forecast in September.

Harvey McGrath, Man chairman, in an interview with Reuters said, “We are in a market that is growing very rapidly … inflow of assets into these kind of products across the industry is strong,” Man Group, like its hedge fund industry peers, continues to benefit from investors’ ongoing shift away from traditional ways of holding equities and bonds in favour of hedge funds, property and private equity, McGrath said.

According to their statement, Man’s profit before taxes on all operations rose to $766 million (33%) and its recurring net management fee income rose to $452 million (38%).

Assets under management reached $56.8 billion at the end of September and are now estimated at around $58 billion.

McGrath said in a statment “Looking forward we expect Man’s Financial markets to continue to expand and believe that our business model, focused on growing market share, diversifying revenue streams, controlling overheads and exploiting scale advantages will support a continued growth in profitability from this business.”

Women in Hedge Funds

Pomegranate Capital, in a international study by CEO Susan Solovay, found that there are 250 female hedge fund managers worldwide, and wants to open the first fund to invest in hedge funds solely run by women.

Solovay has gained backing from Fortress and a Monaco-based Safra family to open this first of its kind hedge fund. After researching the performance of hedge funds run by women, Solovay claims that the studies showed women fund managers performed consistenly better than those run by men.

In an interviev with Reuert Stiener, one prospective investor said: “What she is trying to do is launch a business that capitalises on this inefficiency. She feels she can put together a fund of outstanding female managers that don’t have enough investment and build a successful product on the back of this research. Many of the male-run funds are closed whereas the female-run ones still have capacity to take in money.”

She claims that the research showed that male-run hedge funds managers tended to shoot from the hip making big returns one year and poor ones the next. The research, which was undertaken over a period of years, showed women produced more consistent long-term growth with less volatility than those managed by male fund managers. But the research also showed that women struggled to raise the same levels of funding as men.

Pomegranate identified more than 250 funds managed by women, investing in a range of strategies: long/short equity, distressed, special situations, event-driven, global macro and arbitrage.