Analyst Presentation October 2016

Transcription

1 This document is intended for information purposes only for Man Group plc shareholders and is not an invitation or inducement to invest in any investment products mentioned herein Analyst Presentation October 2016

2 Disclaimer and important information This document is not intended to, and does not constitute, or form part of, an offer to sell or an invitation to purchase or subscribe for any securities, or a solicitation of any vote or approval in any jurisdiction. No representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this document is made by Man Group and no responsibility, obligation or liability (whether direct or indirect, in contract, tort or otherwise) is accepted by it, them, their affiliates or their respective officers, employees, agents or advisers in relation to it or any other information made available in connection with the document. Certain statements in this document are or may be forward-looking statements with respect to financial condition, results of operations or businesses. By their nature, forward-looking statements involve a number of risks, uncertainties or assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These risks, uncertainties or assumptions could adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained within these presentation materials regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Undue reliance should not be place on forward-looking statements, which speak only as of the date of this document. Man Group is under no obligation (except as required by law or regulation) to revise, update or keep current any information contained in this document, regardless of whether that information is affected as a result of new information, future events or otherwise. All written and forward-looking statements attributable to Man Group or persons acting on their behalf are qualified in their entirety by these cautionary statements. This document is being distributed in the United Kingdom only to those (a) who have professional experience in matters relating to investments who fall within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order ) or (b) high net worth entities and other persons to whom it may otherwise lawfully be communicated falling within Article 49(1) of the Order (all such persons together being referred to as relevant persons ). Any person who is not a relevant person should not act or rely on this document or any of their contents. Any investment or investment activity to which the document relates is available only to relevant persons and will be engaged in only with relevant persons. The content of the websites referred to in this announcement is not incorporated into and does not form part of this communication. Nothing in this communication should be construed as or is intended to be a solicitation for or an offer to provide investment advisory services or to invest in any investment products mentioned herein. 2

3 Financial results for the half year ended 30 June Introduction

4 Headlines Reasonable investment performance given turbulent market conditions for the global investment management industry Range of returns across AHL s strategies with good relative performance Mixed performance at GLG, FRM and Numeric Net inflows of $1.0 billion in the period, with strong inflows into quant alternative and quant long only strategies Funds under management of $76.4 billion with negative investment performance and other movements, partially offset by net inflows and positive FX movements Adjusted profit before tax of $98 million (H $280 million), due to lower performance fees Proposed interim dividend of 4.5 cents per share (3.43 pence per share) 4

5 Financial results for the half year ended 30 June Financials

6 Funds under management FUM down 3% driven by negative investment performance and other movements, partially offset by net inflows and FX FUM movement and quarterly flows ($bn) (2.0) (4.0) (6.0) Q1 Q Sales Under $100m Sales Over $100m Redemptions Under $100m Redemptions Over $100m Flows continue to be lumpy in nature Sales of $9.8bn included $3.9bn of mandates over $100 million with: $1.6bn for AHL, including $0.6bn for AHL s Institutional Solutions business $0.7bn of FRM managed account mandates $0.4bn into Numeric strategies Sales of $9.8bn include $4.6bn from EMEA (47%), $3.2bn from the Americas (33%), and $2.0bn from Asia Pacific (20%) Net flow per quarter 9.8 (2.2) 0.3 ((1.4)) (8.8) January 2016 FUM Sales Redemptions Investment movement FX movement Other 30 June 2016 FUM 6

7 Management fee margins Continued reduction in group margin due to business mix shifts Margin trends in each product category: Quant alternatives: margin reduction due to mix shift from retail to institutional assets Discretionary alternatives: margins reasonably stable Fund of fund alternatives: margin reduction due to mix shift from traditional fund of fund assets to larger infrastructure managed account mandates Quant and discretionary long only: margins reasonably stable Guaranteed products: decrease in net margin due to maturity of higher margin products; FUM is only $0.6bn at 30 June

8 Net revenues Net revenues 38% lower due to lower performance fees and lower net management fees due to lower average FUM and margins Six months ended 30 June 2016 ($m) Six months ended 30 June 2015 ($m) Year ended 31 December 2015 ($m) % change vs. H Gross management and other fees % External distribution costs (34) (35) (77) -3% - Servicing fees (32) (33) (74) -3% - Placement fees (2) (2) (3) 0% Share of after tax profit of associates % Net management fee revenues % Performance fees % - AHL % - Numeric % - GLG % - FRM % Gains on investments % Net revenues ,085-38% 8

9 Costs Costs 15% lower reflecting lower variable compensation costs due to lower performance and management fee revenue Six months ended 30 June 2016 ($m) Six months ended 30 June 2015 ($m) Year ended 31 December 2015 ($m) % change vs. H Compensation % - Fixed % - Variable % - Management fee related % - Performance fee related % Other costs % - Cash costs % - Depreciation and amortisation % Asset servicing % Total costs % 9 1 Includes internal commissions.

10 Earnings Adjusted profit before tax down 65%, principally due to lower performance fee revenue partially offset by lower compensation costs Six months ended 30 June 2016 ($) Six months ended 30 June 2015 ($) Year ended 31 December 2015 ($) % change vs. H Net revenues 389m 624m 1,085m -38% Total costs (286)m (336)m (671)m -15% Net finance expense (5)m (8)m (14)m -38% Adjusted profit before tax 98m 280m 400m -65% - Adjusted net management fee PBT 90m 108m 194m -17% - Adjusted net performance fee PBT 8m 172m 206m -95% Adjusting items (43)m (117)m (216)m -63% Statutory profit before tax 55m 163m 184m -66% Tax rate on adjusted profits 15% 14% 10% Adjusted diluted EPS 4.9 cents 13.9 cents 21.1 cents -65% Adjusted net management fee EPS 4.5 cents 5.4 cents 10.2 cents -17% Statutory diluted EPS 2.9 cents 7.5 cents 10.0 cents -61% 10

11 Capital management and liquidity Surplus capital of $470 million after adjusting for the interim dividend and H profits Pension asset & other investments $140m Investment in associates $29m Fixed assets $44m Balance sheet remains strong and liquid with net tangible assets of around $700 million or 42 cents per share Seed capital and loans to funds at 30 June 2016 of $514 million 1 (out of seeding programme of up to $700 million) Group s credit rating by Fitch maintained as BBB+ in June 2016 Cash and cash equivalents $434m Current undrawn revolving credit facility of $1 billion now extended to 2021 Surplus capital at 30 June 2016 of $479 million Seed investments $490m Fees and receivables $326m Surplus capital of $470 million after adjusting for the interim dividend and H profits, and other reserve movements Loans to funds $24m 51% Liquid assets 11 1 $208m of investments in fund products, loans to funds of $24m, plus investments in products held for sale $107m, plus $252m of investments consolidated due to proportion of funds held by Man, less $77m of fund products held to hedge deferred compensation obligations.

12 Financial results for the half year ended 30 June Progress against key priorities

13 Performance and growth: AHL Good performance during a challenging period; growth in FUM from strong institutional flows Good relative performance for AHL s range of strategies: Strong gains in January/February (long fixed income and short commodity positions) Gains were given back in March to June (short positions in equities and agricultural commodities) AHL positioned well for post-brexit volatility, with long fixed income and gold positions Strong institutional flows into Alpha ($0.4bn) and Dimension ($0.4bn). Retail flows into lower margin US 40-Act strategy ($0.4bn) and Diversified ($0.3bn) Launch of Institutional Solutions, offering bespoke mandates for clients (c.$0.8bn of FUM at 30 June 2016) Chinese business progressing, with assets doubling in the period, to $200m New research and strategies: launch of multi Portfolio Manager quant platform; focus on machine learning research at Oxford Man Institute; Evolution Frontier progressing well Evolution Alpha Dimension Diversified AHL s main programmes Year to date to 30 June % 4 0.1% 3 0.6% 2 5.4% 1-2% -1% 0% 1% 2% 3% 4% 5% 6% There is no guarantee of trading performance and past or projected performance is not a reliable indicator of future performance. Returns may increase or decrease as a result of currency fluctuations. All returns are stated net of fees. 1. Represented AHL (Cayman) SPC: Class A1 Evolution USD Shares 2. Represented AHL Alpha (Cayman) Limited - USD Shares. 3. Represented by AHL Dimension (Cayman) Ltd - F USD Shares Class. 4. Represented by Man AHL Diversified (Guernsey) USD Shares Class A from 30 October 2012 to date. The fund is valued weekly; however, for comparative purposes, statistics have been calculated using the best quality price that is available at each calendar month end, using estimates where a final price is unavailable. Where a price, either estimate or final is unavailable on a calendar month end, the price on the closest date prior to the calendar month end has been used.. Source: Man database. 13

14 Performance and growth: Numeric Challenging market environment for Numeric strategies in the first half; good inflows from institutional client base Mixed performance across Numeric s range of strategies Asset weighted performance relative to benchmarks (net of fees) of -2.1% 1 for H Strong performance from Emerging Markets Core of 7.2% (outperformance of 0.8%) Weaker performance from Global Core and US Large Cap Core and Alternative Market Neutral Strategies have strong three year track records Three year annualised asset weighted outperformance relative to benchmarks (net of fees) of 2.3% 1 Launch of Emerging Markets Core strategy in Q with good inflows of $200 million, now nearing capacity; launch of US Amplified Core strategy on 1 July Assets managed by Numeric $19.7bn $19.0bn $18.4bn $16.7bn US Emerging Markets Global Alternatives Dec-14 Jun-15 Dec-15 Jun Numeric s net asset weighted alpha is calculated using the asset weighted average of the performance relative to the benchmark for all strategy composites available net of the highest management fees and, as applicable, performance fees that can be charged.

15 Performance and growth: GLG Weaker absolute performance and net outflows for the period; launch of new EM strategies GLG Alternatives $14.9bn Strategy Assets at 30 Jun 16 Assets at 31 Dec 15 Equities $5.5bn $5.7bn Credit & Convertibles $4.0bn $4.6bn Strategy launched Perf. since inception Commentary Good performance in 2015, difficult H1 for equity market neutral strategies Strong since inception performance, H1 outflows concentrated in convertibles CLOs $4.6bn $5.1bn $0.5bn matured/redeemed in the period Multi-strategy $0.8bn $0.9bn Mixed track record New strategies Euro Mid-cap Equity US Distressed $236m $252m $137m $282m Apr-15 Jul % 1-5.0% 2 Euro Mid-Cap performing very well and seeing net inflows Majority of assets in US Distressed strategy is seed money Japan equity $5.9bn $8.6bn Weak H Strong long term track record GLG Long Only $11.1bn Europe equity $0.8bn $0.7bn UK equity $0.8bn $0.8bn Credit $1.6bn $1.7bn Strong track record and raising money in Continental Europe. Longer term track record good across other strategies Weak H Strong long term track record. Raising assets in Undervalued Assets After a weak 2015, performance has picked up again in Longer term performance good Other equity $2.0bn $2.4bn Potential to grow newer strategies New strategies Unconstrained EM Equity EM Debt Total Return EM Debt Local Currency $46m $106m $141m $43m n/a n/a Sept-15 May-16 Jun % 3 1.3% 4 3.2% 5 Performance since inception strong for Unconstrained EM Equity. EM Debt strategies launched during May/June EM Debt Hard Currency $21m n/a Jun % 6 There is no guarantee of trading performance and past or projected performance is not a reliable indicator of future performance. Returns may increase or decrease as a result of currency fluctuations. All returns are stated net of fees. 1. Represented by Man GLG European Mid- Cap Equity Alternative IN H USD 2. Represented by Man GLG Select Opportunities LP Class FN USD UNRES. 3. Represented by Man GLG Unconstrained Emerging Equity Class IF C EUR until 08/09/2015 then by Class IF C USD 4. Represented by Man GLG Global Emerging Markets Debt Total Return Class I USD Shares 5. Represented by Man GLG Global Emerging Markets Local Currency Rates Class I C USD 6. Represented by Man GLG Global Emerging Markets Bond Class I C USD. 15

16 Performance and growth: FRM Mixed performance across the fund of funds product range; strong growth in infrastructure mandate assets Mixed absolute and relative performance for the period FRM Div II (-4.8 %) vs HFRX FOF Conservative index (-1.6%) 14 Assets managed by FRM Strong growth and pipeline for managed accounts platform: $2.5 billion received in Q4 2015/Q for large US state pension plan mandate $300 million received in H for institutional mandate won in late 2014 for around $1 billion Additional institutional mandate awarded in H for around $750 million for an existing client $11.3bn $11.3bn $12.3bn $11.9bn Guaranteed Thematic FoHF 1 1 Diversified FoHF Net outflows from traditional fund of funds, particularly in Japan 6 Segregated Well positioned as a solutions provider, providing bespoke mandates for institutional clients 4 Infrastructure and direct access 2 0 Dec-14 Jun-15 Dec-15 Jun-16 1 Refer to slide 30 for a split of the strategies within Diversified FoHF and Thematic FoHF. 16

17 Distribution EMEA remains our largest market; greater share of sales from US EMEA 53% of FUM 47% of Sales Americas 27% of FUM 33% of Sales $4.6 billion or 47% of gross sales in H Stable business with sovereign wealth clients in Middle East despite challenges arising from oil price volatility (currently account for 10% of total FUM) Successful launch of GLG EM strategies with around $200m raised at the end of H UK accounts for 17% of FUM or $13 billion Opportunities: UK local authorities Middle East sovereign wealth Continental Europe good institutional pipeline for AHL, Numeric and GLG EM Debt $3.2 billion or 33% of gross sales in H Strong growth in sales (H2 2014: $1.2 billion, H1 2015: $2.2 billion, H2 2015: $2.8 billion, H1 2016: $3.2 billion) Added 15 new institutional client relationships during the period and a number of existing clients made investments into new strategies Strong inflows for AHL during the period Large inflows info FRM infrastructure mandates Opportunities: Institutional - strong pipeline, mainly AHL focussed Wealth - good opportunities with 40-Act strategies, AHL, Numeric and GLG EM Debt Asia Pacific 20% of FUM 20% of Sales $2.0 billion or 20% of gross sales in H Strong sales for AHL, contributing 60% of gross flows for the region Sales of $1.0 billion for Australia Opportunities: Australia superannuation funds and public investment corporations Japan continuation of strong partnership with SMTB Asia (ex-japan) some prospects for China with launch of two new onshore funds and institutional interest for AHL 17

18 Costs, balance sheet management, and business development Costs Balance Sheet and Capital Business Development and M&A Remain disciplined on costs after achieving $270 million of cost savings over past 3 years Our focus remains on efficiency and ensuring that our cost base enables us to address both opportunities and risks appropriately The GBP weakening will be a benefit for us in 2017 as 60% of our fixed costs are in GBP with a current hedged rate of 1.41 for 2017 (for 3 quarters) Strong surplus capital at $470m Revolving credit facility of $1bn is undrawn and available, now extended until 2021 Management of seeding book up to c.$700m, within set VaR limits Remain patient on M&A opportunities as competitive behaviour remains aggressive Launch of private markets business is a key focus to broaden our product offering Continued focus on organic growth and further diversification across the business 18

19 Brexit Potential impact on our business and key risks Area Risk Comments Funds under management Uncertainty weighs on investor sentiment and impacts flows Volatility in markets impacts investment performance Regulations Challenge responding to regulatory developments Distribution Changes to legislation that adversely impact or limit funds that can be distributed across Europe Foreign exchange Sterling continues to weaken against the US Dollar People Adverse changes to the rights of EU nationals to work in the UK We have a diversified product range with a strong global client base Post Brexit volatility benefitted AHL Regulatory presence in 18 different jurisdictions and experienced in responding to regulatory change Majority of our fund sales into Continental Europe are in UCITs format domiciled in Ireland and Luxembourg. Under current legislation, these should be unaffected We earn profits in US Dollars, with majority of revenue in USD and around 10% of management fee revenue in GBP We have higher Sterling costs in comparison to revenue, so any continued weakness in the Sterling will be a net benefit for us from 2017 onwards Dividend will increase in Sterling terms We have an international mix of employees in our London offices 19

20 Conclusion and outlook Cautious in our outlook given the volatility of markets and uncertainty Generating Superior Risk Adjusted Returns for Our Clients Hiring or Acquiring the Best Investment Talent Operating and Allocating Capital Efficiently Ensuring Effectiveness of Our Distribution 20

21 Q&A

22 Appendix FUM pages P&L pages Cash flow pages Balance Sheet pages 46-49

23 Funds under management as at 30 June 2016 FUM by Manager FUM by Product FUM by Client Type FUM by Client Domicile FuM breakdown $76.4bn $19.7bn 26% $11.9bn 15% $18.8bn 25% $26.0bn 34% $30.1bn 39% $0.6bn 1% $45.7bn 60% $17.3bn 23% $59.1bn 77% $20.5bn 27% $15.5bn 20% $40.4bn 53% AHL GLG FRM Numeric Alternative Long only Guaranteed Inst. Retail Asia EMEA Americas Sales breakdown $9.8bn $1.5bn 15% $1.2bn 12% $3.5bn 36% $3.6bn 37% $3.8bn 39% $6.0bn 61% $3.5bn 36% $6.3bn 64% $3.2bn 33% $2.0bn 20% $4.6bn 47% AHL GLG FRM Numeric Alternative Long only Guaranteed Inst. Retail Asia EMEA Americas Redemptions breakdown $8.8bn $1.1bn 13% $0.9bn 10% $1.3bn 15% $5.5bn 63% $4.5bn 51% $0.2bn 2% $4.1bn 47% $4.6bn 52% $4.2bn 48% $1.2bn 14% $6.3bn 71% $1.3bn 15% AHL GLG FRM Numeric Alternative Long only Guaranteed Inst. Retail Asia EMEA Americas 23

24 FUM movements by product 1 January 2016 to 30 June 2016 $bn FUM at 31 December 2015 Sales Redemptions Net inflows / (outflows) Investment movement FX Other FUM at 30 June 2016 Alternative Quant (AHL/Numeric) (1.1) (0.1) 19.0 Discretionary (GLG) (1.9) (1.0) (0.4) 0.1 (0.1) 14.9 Fund of Fund (FRM) (1.1) 0.4 (0.1) 0.4 (0.8) 11.8 Alternative Total (4.1) 1.9 (0.5) 0.7 (1.0) 45.7 Long Only Quant (AHL/Numeric) (0.9) Discretionary (GLG) (3.6) (1.0) (1.7) (0.4) Long Only Total (4.5) (0.7) (1.7) (0.4) Guaranteed Total (0.2) (0.2) - - (0.5) 0.6 Grand Total (8.8) 1.0 (2.2) 0.3 (1.4)

25 FUM by product and manager As at 30 June 2016 $bn Quant AHL Quant Numeric Fund of Fund FRM Discretionary GLG Total Alternative Long only Total excluding Guaranteed Guaranteed Total

26 Non-trend following Trend Following Breakdown of AHL Strategy FUM at 30 June 2016 ($bn) Reference fund/ Bloomberg ticker, Update frequency 1 Comment AHL Diversified (Including Guaranteed) 4.0 Man AHL Diversified (Guernsey) MAHLDGD GU, Daily Single-style systematic Trend following 14% volatility target Managed Futures ($10.9bn) AHL Alpha 4.0 AHL Alpha Cayman Ltd MANALCY KY, Daily (T+2) Single-style systematic Trend following 10% volatility target AHL Evolution 2.9 Man AHL Evolution AHLA1EU KY, Monthly Single-style systematic Trend following on OTC markets 14% volatility target Multi-strategy ($4.5bn) AHL Dimension 4.5 AHL Dimension Cayman Ltd AHLDIMF KY, Monthly Multi-strategy systematic Balanced allocation 10% target volatility Sector based ($1.8bn) AHL Currency AHL Directional Equities (Nov 14) AHL Volatility (Nov 14) AHL Multi-strategy (Nov 14) AHL Target Risk (Dec 14) Tailprotect 1.8 Currency, 12.5%/25% volatility target Directional equities, 10% volatility target Volatility, 7% volatility target Multi-strategy, 8% volatility target Target risk, 10% volatility target Long Only ($0.8bn) Europe Plus Continental Europe Plus Asia Plus 0.8 Man GLG Europe Plus Source ETF MPFE LN, Daily Alpha capture Systematic with 2-5% target alpha and beta close to 1 Institutional Solutions ($0.8bn) 0.8 Total AHL This is the update frequency for the reference fund on Bloomberg, however it is not indicative of the dealing frequency of the total FUM for this category. Source: Man database.

27 Breakdown of Numeric Alternatives ($1.5bn) Long Only ($18.2bn) Strategy FUM at 30 June 2016 ($bn) Market Neutral 1.5 Global 10.2 Emerging Markets 2.8 US Large Cap 3.3 US Small Cap 1.9 Total Numeric 19.7 Selected strategies/ Relevant Benchmark Alternative Market Neutral ML 91 day T-bill Global Core MSCI World European Core MSCI Europe Japan Core MSCI Japan Emerging Markets Core MSCI Emerging Markets Core Russell 1000 Value Russell 1000 Value Large Cap Core S&P 500 Small Cap Core Russell 2000 Small Cap Value Russell 2000 Value SMID Growth Russell 2500 Growth Small Cap Growth Russell 2000 Growth Comment Assets are spread relatively evenly between US, World, Alternative and Absolute Return Market Neutral strategies Around 75% of assets were in Global equities and around 15% were in European equities The majority of assets in Emerging Markets Core Core and All Cap Core accounted for over 60% of US Large Cap assets Assets split broadly evenly between Small Cap Value, Small Cap Core and Small Cap Growth 27 Source: Man database.

28 Breakdown of GLG Alternatives Alternative ($14.9bn) Strategy Equities ($5.5bn) Credit and Convertibles ($8.6bn) Multi-strategy ($0.8bn) FUM at 30 June 2016 ($bn) Europe 3.8 Reference fund(s)/ Bloomberg ticker, Update frequency 1 GLG European Equity Alternative UCITS Fund GLGGEEC ID EQUITY, Daily GLG European Alpha Alternative UCITS Fund GPURALC ID Euro, Daily North America 1.1 n/a UK 0.2 Other 0.4 Convertibles 3.5 Market Neutral 0.5 GLG Alpha Select UCITS fund GLGASLC ID Euro, Daily GLG Global Equity Alternative UCITS Fund GLGGEHE ID, Monthly GLG Global Convertible UCITS Fund GLGGFNA ID, Daily GLG European Distressed Fund GLGDISA KY EQUITY, Monthly GLG Market Neutral Fund GLGUMNA KY EQUITY, Monthly CLO 4.6 n/a Multi-strategy 0.8 Total 14.9 Man GLG Multi-Strategy Fund Class G USD Shares n/a 28 1 This is the update frequency for the reference fund on Bloomberg, however it is not indicative of the dealing frequency of the total FUM for this category. Source: Man database.

29 GLG Long Only Strategy FUM at 30 June 2016 ($bn) Reference fund(s) Bloomberg ticker, frequency UK UK Select UK Undervalued Assets UK Income 0.8 GLG Undervalued Assets Fund Class C Accumulation shares GLUVAPC LN, Monthly GLG UK Income Fund Class A Accumulation Shares SGUKIAA LN, Daily Equities ($9.5bn) Europe European Equity Continental Europe 0.8 GLG European Equity Class I H USD GLEEIHU ID Long Only ($11.1bn) International Japan CoreAlpha 5.9 Global Global Equity 2.0 GLG Japan CoreAlpha Equity UCITS Fund - JPY GLAAXYN ID EQUITY, Daily GLG Global Equity Fund Class I USD GLGPFFR ID Fixed Income / Other ($1.6bn) Credit Strategic Bond Corporate Bond ABS Fund 1.5 Convertibles Global Convertibles 0.1 GLG Strategic Bond Fund Class A Retail Accumulation GLGSTBA LN, Monthly GLG Global Convertible UCITS IL USD GLGCUFR ID Total

30 Breakdown of FRM Strategy Diversified FoHFs ($3.9bn) Thematic FoHFs ($0.8bn) FUM at 30 June 2016 ($bn) FRM Diversified 2.6 Man FRM Alternative Multi-Strategy 0.7 Pine Grove 0.6 Man FRM Managed Futures Strategies 0.4 FRM Sigma 0.2 Man FRM Global Macro Strategies 0.1 Man FRM Event Equity and Distressed Strategies 0.1 Reference fund/ Bloomberg Ticker FRM Diversified II Fund SPC - Class A USD FRMDUSD KY Segregated Funds ($3.0bn) Direct Access and Infrastructure MACs ($4.1bn) Guaranteed ($0.1bn) Various 3.0 n/a Direct Access 0.3 n/a Infrastructure 3.8 Various 0.1 n/a Total FRM Source: Man database.

31 Guaranteed products guidance on key drivers of FUM Flow drivers Sales likely to remain negligible Redemptions steady in absolute terms running at around $100m to $200m per quarter Products offer monthly liquidity with redemption penalties in the first six years Contractual maturity profile at 30 June 2016: Maturity date FUM ($m) H Total 612 Performance drivers Key driver is AHL performance Rebalance period is mid-month to mid-month The majority of the guaranteed products do not allocate to AHL Evolution so performance of AHL element of guaranteed product differs from the main AHL diversified programme Current rule of thumb: -1% AHL performance $25m de-gear +1% AHL performance $12.5m re-gear other variables affect re/de-gears including FX, maturities and fund of fund performance Cost drivers Servicing fees average around 110bp of FUM Asset servicing costs of around 6bp of FUM 31

32 CLO profiles CLOs Region Launch Date Legal Final 30 June Maturity 1 (Sm) ECP III US May-12 May Cannington US Nov-06 Nov CDO III Europe Aug-05 Nov CDO IV Europe May-06 Sep CDO CLAVOS Europe Dec-07 Apr CDO V Europe Apr-07 Jul ECP V US Mar-13 May ECP IV US Jun-12 Jun Ore Hill CLO US Jun-13 Jul Silvermore US May-14 May ECP VI US Sep-14 Jul Silver Spring US Sep-14 Oct ECP VII US Apr-15 Apr GLG Euro CLO I Europe May-15 Apr Total 4, Subject to indenture terms, CLOs are subject to optimal redemption by Noteholders prior to legal final maturity, which will cause the CLOs to liquidate prior to the dates presented. 2 Reflects amounts raised at issuance plus collateral build or repayments of Notes prior to maturity or redemption.

33 FUM by currency As at 30 June 2016 $bn USD EUR GBP JPY AUD Other Total Alternative Quant (AHL / Numeric) Discretionary (GLG) Fund of Fund (FRM) Alternative Total Long Only Quant (AHL / Numeric) Discretionary (GLG) Long Only Total Guaranteed Total Total

34 Modelling performance fees As at 30 June 2016 (1) 40% 33% $5.2bn 10% 5% 11% 1% $2.1bn $0.0bn $0.1bn At Peak up to 5% away 5-10% away 10-15% away 15-20% away Over 20% Positive Alpha Positive Alpha (below hurdle) Zero Alpha Negative Alpha 93% ($17.5bn) of AHL FUM is eligible to earn performance fees, of which: 72% ($12.6bn) is at or within 5% of high watermark Weighted average distance from peak 4.3% Performance fee rate 18-20% If 100% of performance fee eligible FUM was at peak, a 1% increase in NAV (1.22% in performance fee assets) would result in $38m of performance fees, based on performance fee rate of 18% Performance fee booking frequency 1% 24% 19% 2% Annual - June (mainly Evolution) Annual - September (Diversified) Annual - December (mainly Dimension and Alpha) Annual - May 37% ($7.4bn) of Numeric FUM is eligible to earn performance fees (32% ($6.8bn) of long only strategies and 93% ($0.5bn) of alternatives) Blended performance fee rate 12% for long only and 20% for alternatives If 100% of the long only eligible FUM earned 1% of positive alpha, this would result in $8m of performance fees based on a performance fee rate of 12% Performance fee booking frequency 90% 10% Quarterly Annual (mainly November) 55% Daily/Weekly/Monthly (mainly Diversified and Guaranteed) 34 1 The weighted average distance from peak for daily/weekly/monthly crystallising AHL FUM is around 12% as at 30 June 2016.

35 Modelling performance fees As at 30 June % 35% 69% Monthly Annual 16% 28% 3% 0% 1% 0% 3% 0% 0% At Peak up to 5% away 5-10% away 10-15% away 15-20% away Over 20% At Peak up to 5% away 5-10% away 10-15% away 15-20% away Over 20% 39% ($10.2bn) of GLG FUM is eligible to earn performance fees, of which: 47% ($4.8bn) is at or within 5% of high watermark Performance fee rate 15-20% If 100% of performance fee eligible FUM was at peak, a 1% increase in NAV (1.18% in performance fee assets) would result in $21m of performance fees, based on performance fee rate of 15% Performance fee booking frequency 16% ($1.9bn) of FRM open ended FUM is eligible to earn performance fees, of which: 28% ($0.5bn) is at or within 5% of high watermark Weighted average distance from peak 8.0% Performance fee rate 5-10% Performance fee booking frequency 35% Annual 22% Annual 65% Semi-Annual 78% Monthly As at 31May Source: Man database.

36 Modelling gross and net management fee revenues Year ended 30 June 2016 Run Rate gross margin (bps) Run Rate net margin (gross margin net of external distribution costs) (bps) Alternative Quant (AHL/Numeric) Discretionary (GLG) Fund of Fund (FRM) Alternative Total Long Only Quant (Numeric/AHL) Discretionary (GLG) Long Only Total Guaranteed Total Total Commentary Gross margin x FUM gives gross management fees Net margin x FUM gives net management fees Difference between gross and net management fees is external distribution costs External distribution costs comprises placement fees and servicing fees Placement fees 3 components $2m unamortised placement fees at 30 June 2016 Approx. 1-2% of AHL open-ended sales amortised over 2-5 years Accelerated amortisation relating to early redemptions of guaranteed and open-ended products Servicing fees = total external distribution costs placement fees 36 Source: Man Group plc.

37 Modelling costs - compensation Six months to 30 June 2016 $m Commentary Fixed compensation (91) Fixed compensation per targets adjusted for acquisitions and FX 2016 c.$185m. H will be higher than H due to investment in new talent 2017 c.$185m plus FX impact plus inflation 60% of fixed compensation in GBP Non USD costs are hedged quarterly a year in advance First 3 quarters of 2017 currently hedged at an average rate of 1.41 Variable Compensation (95) Depends on mix of management versus performance fee revenue and proportion of GLG and Numeric vs. AHL and FRM revenues - Management fee related (65) Includes amortisation of prior year deferrals of $29m in H Unamortised deferred variable compensation compensation at 30 June 2016 of $76m. Amortisation schedule: - Performance fee related (30) H2 2016: $29m variable compensation 2017: $30m 2018 onwards: $17m Total compensation (186) Overall compensation to net revenue ratio expected to be in the range of 40% to 50%, depending on mix and level of revenue: At the higher end of the range in years where GLG revenues are a larger proportion of the total At the lower end in years where AHL revenues are a larger proportion of the total 48% in H due to lower level of performance fee revenue and impact of deferrals (2015: 43%) 37 Source: Man database.

38 Modelling costs non compensation costs Six months to 30 June 2016 $m Commentary Asset servicing (17) No asset servicing costs on Numeric FUM. 5-6bps on rest of FUM Other cash costs (76) Depreciation and capex (7) Other cash costs per targets adjusted for acquisitions and FX 2016 c.$160m. Full year target in line with expectations 2017 c.$160m plus FX impact plus inflation 60% of other cash costs in GBP Non USD costs are hedged quarterly a year in advance First 3 quarters of 2017 currently hedged at an average rate of 1.41 Depreciation & amortisation and capex schedule: 2016 D&A $15m, 2017 D&A $22m Capex of $40-50m in the next 2 to 3 years Total non compensation costs (100) 38 Source: Man database.

39 Modelling earnings Six months to 30 June 2016 $m Net finance expense (5) Commentary Expected to be a net finance expense of $11m for 2016, split $2m relating to management fees and $9m relating to performance fee earnings Adjusted PBT 98 Adjusting items (43) H includes: $(47)m amortisation of acquired intangible assets; $(10)m of other adjusting items; partially offset by $14m revaluation of contingent consideration Intangibles amortisation relating to GLG, FRM, Numeric and Pine Grove of $94m p.a. Statutory profit 55 Tax rate on adjusted PBT 15% Tax rate for H of 15%, in line with underlying rate of 15% Underlying tax rate for H and beyond of 14% to 17% depending on mix of management and performance fee earnings and proportion of US earnings Number of shares 1,695m Should use: 1,694m for Source: Man database.

40 Split of adjusted PBT between adjusted net management fees and net performance fees Adjusted net management fees Net performance fees Six months to 30 June 2016 $m Gross management and other fees 381 Share of after tax profit of associates - Distribution costs (34) Asset services (17) Compensation - fixed (91) Compensation - management fee related variable (65) Other costs (83) Six months to 30 June 2016 $m Performance fee revenue 40 Income or gains on investments and other financial instruments Variable compensation attributed to performance fees 2 (30) Finance expense (4) Net performance fees 8 Net finance expense (1) Adjusted net management fees 90 40

41 Dividend Policy To pay out at least 100% of adjusted net management fee earnings per share in each financial year by way of ordinary dividend. In addition, Man expects to generate significant surplus capital over time, primarily from net performance fee earnings. Available surpluses, after taking into account our required capital (including accruals for future earn-out payments), potential strategic opportunities and a prudent buffer, will be distributed to shareholders over time, by way of higher dividend payments and/or share repurchases. Whilst the Board considers dividends as the primary method for returning capital to shareholders, it will continue to execute share repurchases when advantageous. Six months to 30 June 2016 $m Adjusted net management fees before tax 90 Tax (14) Adjusted net management fee profit after tax for EPS purposes 76 Diluted number of shares 1,695 Adjusted net management fee EPS 4.5 cents 41 Source: Man database.

42 Profit and loss (1/2) Revenue: Six months to 30 June 2016 ($m) Gross management and other fees 381 Performance fees 40 Income or gains on investments and other financial instruments 2 Share of after tax profit of associates External distribution costs Asset servicing Compensation Fixed (91) Variable (95) Management fees (65) Performance fees (30) Other costs Net finance expense Adjusted profit before tax (34) (17) (186) (83) (5) 42

43 Profit and loss (2/2) Six months to 30 June 2016 ($m) Adjusted profit before tax (from previous slide) 98 Amortisation of acquired intangible assets Revaluation of contingent consideration 14 Unwind of contingent consideration discount Recycling of FX revaluation on liquidation of subsidiaries Profit before tax 55 Taxation Profit after tax 49 Tax rate (before adjusting items) 15% Diluted weighted average # shares (m) 1,695 Adjusted diluted EPS 4.9 Statutory diluted EPS 2.9 Net management fee EPS 4.5 (47) (9) (1) (6) 43

44 2016 cash earnings Calculation of adjusted EBITDA Six months to 30 June 2016 ($m) Gross management and other fees 381 Alternative 263 Long only 93 Guaranteed products 25 Performance fees 40 Total gross revenues 421 Gains on investments 2 Share of after tax profit of associates - External cash distribution costs (32) Net revenues 391 Cash operating costs (277) Adjusted EBITDA 114 Management fee EBITDA 98 Performance fee EBITDA 16 Reconciliation of adjusted PBT to adjusted EBITDA Six months to 30 June 2016 ($m) Adjusted PBT 98 + Net finance expense 5 + Depreciation 6 + Amortisation of capitalised computer software 1 + Placement fee amortisation 2 + Current year amortisation of deferred compensation - Deferred compensation awards relating to the current year 29 (27) Adjusted EBITDA 114 Adjusted EBITDA / net revenue margin of 29% Adjusted EBITDA margin on management fees of 28%, performance fees of 38% 44

45 Reconciliation of adjusted profit before tax to adjusted EBITDA to operating cash flow Six months to 30 June 2016 ($m) Adjusted profit before tax 98 + Net finance expense 5 + Depreciation 6 + Amortisation of capitalised computer software 1 + Placement fee amortisation 2 + Current year amortisation of deferred compensation 29 - Deferred compensation awards relating to the current year (27) Adjusted EBITDA 114 Share of after tax profit of associates (investment income, not operating income) - Cash adjusting items and other 30 Cash flow from operations

46 Accounting for acquisitions $m Numeric Pine Grove Silvermine BAML FoHF NewSmith Total Initial consideration Cash paid for balance sheet assets acquired n/a - 19 Cash paid in relation to earn-out to date Maximum earn-out at 30 June Total potential consideration at 30 June Comprising: - Cash paid / (received) at completion Cash paid to date in relation to earn-outs Contingent consideration creditor Maximum additional potential liability to be recognised

47 Seeding Book $514m of seeding and loans to funds across our investment managers Seeding books uses include; AHL Volatility, AHL Directional Equity and AHL Target Risk FRM balance largely relates to illiquid positions GLG Emerging Market strategies (launched in June 2016), GLG US Distressed Credit fund, GLG Unconstrained Emerging Equity fund and capital towards the US and European CLOs Numeric Market Neutral and Emerging Markets UCITS strategies $400m $350m $300m $250m $200m $150m $100m $50m $0m AHL FRM GLG Numeric Loans to funds 47

48 Seeding book Reconciliation to Group financial statements As at 30 June 2016 $m Loans to funds 24 Other investments in fund products 208 Less those used to hedge deferred compensation awards (77) Investments in funds relating to line-by-line consolidated fund entities 431 Included in cash 43 Included in receivables 11 Included in trade and other payables (12) Less third party interest in consolidated funds (221) Non-current assets held for sale 213 Non-current assets held for sale (106) Seeding investments portfolio

49 Balance sheet position ASSETS 30 June 2016 ($m) 31 December 2015 ($m) Cash and cash equivalents Fee and other receivables Investment in fund products and other investments Pension Asset Investment in associates Leasehold improvements and equipment Goodwill and acquired intangible 1,452 1,497 Other intangibles Deferred tax assets ,121 3,200 Non-current assets held for sale Total assets 3,334 3,388 LIABILITIES Trade and other payables Provisions Current tax liabilities 9 32 Third party interest in consolidated funds Borrowings Deferred tax liabilities ,051 1,104 Non-current liabilities held for sale Total Liabilities 1,157 1,173 NET ASSETS 2,177 2,215 49

50 Supplementary Performance Information

51 Index value USD Performance over the last 10 years 1 November 2006 to 31 October AHL Diversified Programme¹ World stocks AHL Diversified Programme¹ GLG Alternative Composite 2 World stocks World bonds 2000 GLG Alternative Composite 2 World bonds Total return 67.6% 32.9% 54.1% 54.2% % -1.1% 3.7% 5.3% Annualised return Annualised volatility Worst drawdown 5.3% 2.9% 4.4% 4.4% 14.0% 6.8% 14.5% 3.0% -18.6% -26.0% -50.4% -3.3% Please note that the performance data is not intended to represent actual past or simulated past performance of an investment product. The data is based on a representative investment product or products that fully invest in the Programme. An example fee load of 3+1% and 20% has been applied. 2. GLG Alternative Composite: Represented by the GLG Alternative Strategies Dollar-Weighted Composite GLG alternative strategy dollar-weighted average returns are calculated as the composite performance of the alternative strategy funds and funds that have closed, in addition to managed accounts managed in accordance with alternative strategies, weighted by the sum of the prior month-end AUM. Please note that the October 2016 figures for GLG Alternative Strategies Dollar-Weighted Composite are based on estimates. 3. Part year. World stocks: MSCI World Net Total Return Index hedged to USD. World bonds: Citigroup World Government Bond Index hedged to USD (total return). Please be aware that past performance is not a guide to the future. Source: Man Group database, MSCI and Bloomberg.

52 Man AHL Diversified plc 1 26 March 1996 to 31 October 2016 Index value USD (log scale) AHL Diversified Programme 1 Hedge fund index AHL Diversified Programme¹ World stocks World bonds Hedge fund index Total return 951.4% 263.7% 207.5% 335.1% % 3.7% 5.3% 3.6% Annualised return 12.1% 6.4% 5.6% 7.4% 3000 Annualised volatility 16.5% 14.3% 2.9% 6.9% 2000 Worst drawdown -19.5% -50.4% -3.3% -21.4% World bonds World stocks Please note that the performance data is not intended to represent actual past or simulated past performance of an investment product. The data is based on a representative investment product or products that fully invest in the Programme. An example fee load of 3+1% and 20% has been applied. World stocks: MSCI World Net Total Return Index hedged to USD. World bonds: Citigroup World Government Bond Index hedged to USD (total return). Hedge fund index: HFRI Fund Weighted Composite Index. Please note that the HFRI indices data over the past four months may be subject to change. Please be aware that past performance is not a guide to the future. Source: Man Group database, MSCI and Bloomberg.

53 Agriculturals Bonds Credit Currencies Energies Interest Rates Metals Stocks Attribution Man AHL performance¹ 2016 Monthly returns % 3.0% 2.0% 1.0% 0.0% AHL Diversified Programme¹ World Stocks Corporate Bonds HFRI FoF Composite January % -5.4% 0.7% -2.7% February % -1.5% 2.3% -1.2% March % 5.3% 4.2% 0.7% April % 0.9% 1.5% 0.5% -1.0% May % 1.8% 0.2% 0.5% -2.0% -3.0% -4.0% June % -1.3% 3.8% -0.5% July % 4.2% 2.4% 1.5% August % 0.5% 0.2% 0.4% September % 0.2% -1.2% 0.5% October % -0.6% -2.6% -0.2% 2016 total return: -8.8% Please note that the performance data is not intended to represent actual past or simulated past performance of an investment product. The data is based on a representative investment product or products that fully invest in the Programme. An example fee load of 3+1% and 20% has been applied. World stocks: MSCI World Net Total Return Index hedged to USD. Corporate bonds: Citigroup High Grade Corporate Bond Index (total return). HFRI FoF Composite: HFRI Fund of Funds Composite Index. Please note that the HFRI index data over the past 4 months may be subject to change. Please be aware that past performance is not a guide to the future. Assumptions have been applied to the calculation of sector contribution to show contribution net of fees. The sector contribution is only intended to be indicative and returns are based on gross data. Source: Man Group database, MSCI and Bloomberg.

54 Man AHL portfolio risk Diversification across sectors and markets Sector allocations 1 As at 31 October 2016 Stock Indices 21.2% Agriculturals 6.6% Bonds 16.9% Metals 8.8% Credit 5.3% Interest Rates 5.4% Energies 12.6% Currencies 23.3% The sector allocations are designed to reflect the expected long-term risk exposure to each sector relative to the other sectors in the portfolio. The figures are based on estimates of the risk of each sector for the current portfolio. The portfolio structure and constituents are regularly reviewed by the investment management team and sector allocations will change accordingly. Source: Man Group database.

55 Reference Funds Key AHL Alpha: Represented by AHL Alpha plc. AHL Alpha plc is valued weekly; however, for comparative purposes, statistics have been calculated using the last weekly valuation for each month. AHL Diversified: Represented by Man AHL Diversified plc. Man AHL Diversified plc is valued weekly; however, for comparative purposes, statistics have been calculated using the last weekly valuation for each month. Alpha Select: Represented by GLG Alpha Select Fund - Class C - EUR. Atlas Macro: Represented by GLG Atlas Macro Fund - Class A USD. Emerging Markets: Represented by GLG Emerging Markets Fund - Class A Restricted to Unrestricted (31/08/2007) - USD. ELS: Represented by GLG European Long Short Fund - Class D Restricted to Unrestricted (29/06/2007) - EUR. European Distressed: Represented by GLG European Distressed Fund - Class A USD. GLG Alternative Composite: Represented by GLG Alternative Strategies Dollar-Weighted Composite. GLG alternative strategy dollar-weighted average returns are calculated as the composite performance of the alternative strategy funds and funds that have closed, in addition to managed accounts managed in accordance with alternative strategies, weighted by the sum of the prior month-end AUM. Market Neutral: Represented by GLG Market Neutral Fund - Class Z Restricted to Unrestricted (31/08/2007) USD. North American Opportunity: Represented by GLG North American Opportunity Fund - Class A Restricted to Unrestricted (29/06/2007) - USD. Ore Hill: Represented by BMA Special Opp Offshore BMA Ltd. Aspect: Represented by Aspect Capital Limited - Aspect Diversified Program. BlueTrend: Represented by BlueCrest Capital Management Ltd. BlueTrend Fund Limited. Winton: Represented by Winton Capital Management Ltd Diversified Trading Program. Fund of funds: HFRI Fund of Funds Composite Index. HFRI Emerging Markets: HFRI Emerging Markets (Total) Index. HFRI Equity Hedge: HFRI Equity Hedge (Total) Index. Hedge Fund Weighted Composite Index: HFRI Fund Weighted Composite Index. HFRI Macro: HFRI Macro (Total) Index. HFRI RV: Multi-Strategy: HFRI RV: Multi-Strategy Index. World bonds: Citigroup World Government Bond Index hedged to USD (total return). World stocks: MSCI World Net Total Return Index hedged to USD. 55 Source: Man Group database, Bloomberg, International Traders Research and MSCI. Please note that the dates in brackets represent the date of the join in the linked track records.

56 Andrea Waters Head of Investor Relations Direct line: Tel: +44 (0)