LONDON (dpa-AFX) - Man Group Plc (EMG.L, MNGPY.PK, MNGPF.PK) on Wednesday said assets under management declined 9.5 percent in the third quarter, amid challenging conditions that saw subdued investor appetite and volatile markets. For the nine months ended December, the world's biggest hedge fund expects to report adjusted pre-tax profit of $257 million. Man also said it plans further $75 million of cost reductions by the end of 2012. 'Trading conditions have been tough for Man in the second half of 2011. Investment performance varied significantly across styles, with market volatility and reduced market liquidity impacting trading opportunities. Although some of our funds performed strongly and sales held up well, we experienced a net outflow in the last two quarters, albeit with reduced redemptions in the final three months,' said Peter Clarke, Chief Executive of Man. The company estimates funds under management to decline to $58.4 billion as of December 31, 2011 from $64.5 billion at the end of September and $69.1 billion at March-end. Sales in the third quarter were $3.1 billion, while redemptions were $5.6 billion for the quarter compared to $7.3 billion in the quarter ended September, the company noted. The company's net outflow in the quarter was $2.5 billion. In open ended alternatives, there were net outflows from AHL Diversified Plc of $0.8 billion and the recently acquired GLG Partners, Inc. of $1 billion, with GLG outflows mainly from the emerging markets, UK alpha select and European opportunities styles. In the third quarter, investment performance was $1.5 billion negative in aggregate. Changes in exchange rate are expected to reduce assets by $0.3 billion in the quarter, with the effects of Euro weakness partially offset by strength in the Australian dollar. For the nine months ended December 31, the company expects to report pre-tax profit of $190 million. Earnings per share would be 7.4 cents on a reported basis and 10.5 cents on an adjusted basis. The company also expects net management fee income of $278 million and net performance fee income of $35 million. Further, Man said it continues to review operating costs and efficiencies and will implement a further $75 million of cost reductions from the December 31 cost run rate by the end of 2012. Of these additional savings, $50 million will be realised in 2012 and the balance in 2013. In a separate statement, Man said that GLG's founding partner and Principal Noam Gottesman stood down as co-CEO and has taken on the role of non-executive Chairman of GLG's business and interests in the US. Manny Roman continues as sole CEO of GLG and Chief Operating Officer of Man. Man shares are currently trading at 113.70 pence, up 6.60 pence or 6.16 percent in London. In the U.S., MNGPY.PK closed Tuesday's trading at $1.59, down $0.03 or 1.85 percent.
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