Latest results from the world's largest listed hedge fund firm highlight some of the ups and downs of this corner of the investment sector, which has often been favoured by types of wealth manager.

Man Group, the largest listed hedge funds company in the world, today reported that funds under management crept higher to $55 billion at the end of March from $54.1 billion at the end of December, with stronger inflows pointing to a more upbeat investor mood than has existed for some time.

While latest industry data shows hedge fund returns have hit a wall in spring, possibly weakening some appetite for these investment vehicles, Man Group’s own results showed there were net inflows of $2.0 billion in the first quarter of the year. Those net figures comprised sales of $6.5 billion and redemptions of $4.5 billion. There was an overall negative investment movement of $700 million in the quarter, the firm said in a statement.

As such a large firm in the alternative investment management sector, Man Group’s results are something of a bellwether of the state of the hedge fund industry in general; its listed status means that, unlike many hedge fund businesses, it has to disclose results relatively promptly.

"The market environment in the first quarter has been particularly challenging and March was a very difficult month for the industry. In this context, performance across the firm was reasonable on a relative basis,” Manny Roman, chief executive, said in the statement.

Recent industry data shows the sector has had problems. In April, on average, hedge funds recorded a decline of 0.17 per cent and followed the 0.33 per cent decline in March. The industry performed particularly badly on the equity front, with the HFRI Equity Hedge Index recording a fall of 0.7 per cent despite the S&P 500 rising 0.74 per cent in April, according to Hedge Fund Research, the Chicago-based firm.

Details

Man Group’s flagship AHL Diversified programme fell 2.2 per cent in the quarter, which was the main driver of the negative investment movement of $300 million in quant alternatives strategies; performance in GLG alternative strategies was flat overall with positive performance in credit strategies being offset by negative performance in equity and macro strategies.

Performance at FRM, another set of Man Group hedge fund strategies, was positive overall which increased funds under management by $100 million in the quarter. FRM Diversified strategies were up 0.5 per cent in the quarter.

Most of the firm’s GLG long-only strategies lost ground in the quarter. The Japan CoreAlpha strategy dropped 5.9 per cent which contributed to the majority of the negative investment movement of $500 million, it said.

Discretionary alternatives funds under management rose by 10 per cent to $18.0 billion during the period, driven by net inflows of $2.1 billion.