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A DIVERSIFIED MAN GROUP Man Group plc Annual Report for the year ended 31 December 2015 MAN GROUP ANNUAL REPORT 2015 This interactive pdf allows you to easily access the information that you want, whether printing, searching for a specific item or going directly to another page, section or website. Use the document controls located at the bottom of each page to navigate through this report. Use the contents to jump straight to the section you require. Search Print Search the entire Print a single page or document by keyword whole sections Return Forward/back Return back to the Next Page contents at the beginning Previous Page of the document Links Throughout this report there are links to pages, other sections and web addresses for additional information. They are recognisable by the blue underline simply click to go to the relevant page or web URL www.man.com MAN GROUP OVERVIEW EMPLOYEES Man Group is one of the world’s largest independent active investment managers, and a leader in liquid investment strategies. Headquartered in London, Man has a developed 1,230 distribution network, offices in every major financial region and FUNDS UNDER MANAGEMENT is regulated in 13 jurisdictions. Man operates an integrated (FUM) business model with all back and middle office functions, together with sales and marketing handled centrally, servicing $78.7bn our four investment engines as described below. See pages 12 to 13 for more details Man AHL (AHL) is a quantitative A pioneer in the application of Acquired by Man Group in FRM has an open architecture, investment manager with an systematic trading, AHL has 2012, Man FRM (FRM) is a full service hedge fund platform extensive history of performance been serving institutional and hedge fund investment specialist including partnership solutions, and innovation and funds under private clients since 1987 and with $12.3 billion of funds a leading managed account management of $16.9 billion. has a range of momentum and under management and a platform and commingled non momentum strategies. predominantly institutional strategies. client base. AHL’s 115 investment FRM’s 52 research and professionals are based in investment staff are based in London, Oxford, Hong Kong London, New York, Tokyo, and Pfäffikon. Guernsey and Pfäffikon. See pages 18 to 19 for more details See pages 22 to 23 for more details Founded in 1995 and acquired The majority of GLG’s 141 Established in 1989 and acquired Numeric’s 29 investment by Man Group in 2010, Man investment professionals are by Man Group in 2014, Man professionals manage assets GLG (GLG) is a discretionary based in London but it also has Numeric (Numeric) is a Boston- for institutional clients globally, fund manager with funds under investment teams in New York, based, quantitative equity including corporate and public management of $30.5 billion that Hong Kong and Pfäffikon. manager with $19.0 billion pension plans, foundations, delivers alternative and long only of funds under management endowments, and sovereign investment strategies across GLG has a range of institutional invested across almost every funds. asset classes, sectors and and private clients from across equity market in the world geographies. the globe. through long only and long short strategies. See pages 20 to 21 See pages 24 to 25 for more details for more details OUR JOURNEY 20101 20152 Over the last five years, Man has become FUM (BILLION) a larger, more diversified provider of liquid investment strategies, with a greater focus 39.4 78.7 on serving institutional clients. We have reduced our cost base to a level which BY MANAGER reflects the economics of our business and flows. AHL GLG FRM Numeric BY PRODUCT Guaranteed Alternative Long only BY CLIENT TYPE Institutional Retail BY CLIENT DOMICILE EMEA Asia Americas 1 As at 31 March 2010 2 As at 31 December 2015 CONTENTS Strategic report Corporate governance Notes to the Parent Company Man Group overview IFC Board of directors 46 financial statements 136 Our journey 01 Corporate governance report 49 Five year record 138 A diversified Man Group 02-07 Audit and Risk Committee report 57 2015 highlights 08 Nomination Committee report 61 Other information Chairman’s statement 09 Directors’ remuneration report 64 Shareholder information 139 Chief Executive’s review 10 Directors’ report 88 Our business model 12 Strategic framework 14 Financial statements Progress against strategy 16 Directors’ responsibility statement 90 Investment Management review 18-25 Independent auditors’ report 92 The Strategic report, set out on Chief Financial Officer’s review 26 Group income statement 96 the inside front cover and on Risk management 34 Group statement of comprehensive income 96 People and corporate responsibility 38 Group balance sheet 97 pages 1 to 45, was approved Man Group’s literary sponsorships 43 Group cash flow statement 98 by the Board and signed on its Charitable Trust 44 Group statement of changes in equity 99 behalf by: Emmanuel Roman, Notes to the Group financial statements 100 Chief Executive Officer Parent Company financial information 135 Man Group plc Annual Report 2015 01 A DIVERSIFIED MAN GROUP A broad range of investment styles futures LONG ONLY Over the past five years we have broadened GUARANTEED our portfolio of businesses and those businesses in turn have broadened their range of products and strategies. Man Group’s investment managers have Our discretionary expertise focuses on FUM by style expertise across a diverse range of strategies equities and credit as well as multi-asset to ensure that the firm can offer products investment strategies. GLG encompasses to meet differing investor appetite for risk multiple investment teams, that deliver and rewards. a range of absolute return and long only strategies across asset classes, sectors We manage over $35 billion in quantitative and geographies. strategies through AHL and Numeric. AHL is a systematic investment specialist that focuses FRM is one of the largest, independent on delivering a range of absolute return, long- alternatives specialists based in Europe only and momentum-based quantitative funds. with a predominantly institutional client base. Numeric is a fundamentally driven quantitative Responsible for open-architecture hedge asset manager with disciplined, systematic fund and alpha strategy solutions for investment processes offering long only, institutional investors, including fund of $78.7bn active extension, and hedged equity strategies hedge funds, client advisory solutions, across regions, styles, and capitalisations. outsourced research and consulting. $bn Equities 38.1 Momentum 11.9 Credit & convertibles 11.4 Managed accounts 5.8 Fund of funds 6.5 Multi-strategy 5.0 Left to right Pierre Lagrange, Chairman, Man Asia and Senior Managing Director, Man GLG Robyn Grew, Global Head, Legal & Compliance Luke Ellis, President, Man Group ALTERNATIVE 02 Man Group plc Annual Report 2015 STRATEGIC REPORT “ First, foremost and always, we focus on delivering superior risk futures adjusted performance.” SYSTEMATIC E Q U I T Y FOFs Man Group plc Annual Report 2015 03 A DIVERSIFIED MAN GROUP Serving clients through a global distribution framework Over the past five years our business has become more institutional in nature. More recently we have been the beneficiary of a trend whereby large institutional clients seek to put more money to work with fewer managers. SALES With a well established network of 12 offices Man Group operates two distinct distribution in key locations and developed regulatory models, marketing directly to institutions whilst relationships in all of the markets in which we accessing private investors via third-party $22.9bn operate, Man Group has a powerful level of intermediaries. Net inflows of $0.3bn in 2015. insight into investor preferences as well as regulatory requirements. Client service is an essential part of our growth strategy. Our extensive global distribution Our regional offices are predominantly staffed network, long established local relationships SALES PEOPLE by local people who provide investors and and high quality technology enabled investor distributors with specialist regional expertise. reporting give us a competitive advantage. 122 Left to right Eric Burl, Co-Head, Global Sales & Marketing and Head of Man Americas René Herren, Deputy Head, Global Sales & Marketing Tim Rainsford, Co-Head, Global Sales & Marketing 04 Man Group plc Annual Report 2015 STRATEGIC REPORT “ Clients and their interests are at the heart of everything we do.” Man Group plc Annual Report 2015 05 A DIVERSIFIED MAN GROUP A range of options for long-term growth We have a diverse business with many opportunities for long-term growth and a set of options over a range of uncorrelated performance fee streams. In addition to growing assets through Growth may be supplemented through FUM acquired through recent acquisitions performance and sales we look to develop M&A, taking advantage of acquisition and the business by attracting talent, adding consolidation opportunities where we can investment teams and taking advantage generate an attractive return on capital. Our of acquisition opportunities where we can capital management policy of paying out net generate an attractive return on capital. management fee profits to shareholders and building surplus capital from performance fee We offer an entrepreneurial investment profits gives us the flexibility to do this. management culture within an institutional framework. Through this, we are able to attract high quality
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