Investors poured $700 million more into Man Group hedge funds in the three-month period that ended Dec. 31, representing more than a three-fold increase over previous quarters, according to Bloomberg.
The London-based group attributes much of the growth to its three-month-old Man IP 220. Investors responded to the new product with $900 million worth of new investments, accounting for a large part of Man's $2.1 billion gross new funds. Investors also redeemed $1.4 billion in the most recent quarter.
Analysts suggest Man's performance may mark the beginning of a trend for the company. "I expect more of a pick-up in fund gathering this year," said Huw van Steenis, an analyst with Morgan Stanley.
Man scooped some of future broker Refco's assets out of bankruptcy, making Man not only the world's largest hedge fund operator, but also the fourth largest futures market operator worldwide. Overall, managed funds increased from $44.4 billion n September to $45.8 billion in December.
Last year, Man's computer-driven futures market fund, the AHL Diversified fund, jumped 18%, representing a return six times higher than the Standard & Poor's 500. The AHL funds should continue to perform well, increasing inflows for the world's largest hedge fund company, according to van Steenis.
However, the outlook for other hedge funds is less optimistic. The CFSB Tremont Hedge Fund index inched forward 1.3% during the first half of 2005. During the same period of 2004, the index grew more than twice that.
In London, Bailey Coates Cromwell closed in June, after plunging 20%. Since opening in July 2004, Greenwich, Conn.-based Severn River Capital Management saw two of its funds drop 8%. The company announced on Jan. 4 that it plans to shut them down, and divvy-up the assets among investors.