Man Group declares its second $125m share buyback scheme this year

Man Group shares became the top FTSE 350 riser on Friday after the investment firm announced another share buyback programme of up to $125million.

The world’s largest listed hedge fund manager said the measure was in line with its policy to hand capital to investors ‘while maintaining a prudent balance sheet’.

This latest buyback will run for the next 12 months from today and operate alongside a similarly-sized share repurchase scheme, which is set to conclude in June 2023.

American investment banking giant JP Morgan has been appointed by Man Group to acquire stock on its behalf for both programmes.

‘Share purchases will take place in open market transactions and may be made from time to time depending on market conditions, share price, trading volume and other factors,’ the former Booker Prize sponsor stated.

Shares in the London-listed company were 6.1 per cent higher at 216.7p during mid-afternoon on Friday, just ahead of motor manufacturer Aston Martin Lagonda.

Man Group has continued to generously reward shareholders this year despite significant market volatility affecting the asset management industry.

When publishing its half-year results in August, the firm recommended a dividend of 5.6¢ per share, the same amount as in the 2021 interim results.

For the first nine months of 2022, the volume of assets managed by the business declined by $10.2billion to $138.4billion, primarily because of adverse foreign exchange movements.

The US dollar has gotten substantially stronger this year as investors have sought to put their money into safer assets, and the US Federal Reserve has adopted a more hawkish monetary policy while the pound has become a lot weaker.

Sterling took a particular battering following a much-criticised ‘mini-budget’ in September that was filled with £45billion of unfunded tax cuts and piled additional turmoil on Britain’s financial services industry.

A spike in government bonds led to some pension funds conducting a fire sale of gilts as they were inundated with cash calls related to their holdings in the liability-driven investment (LDI) market.

This sent gilts plummeting even further in value before the Bank of England came to the rescue by declaring an emergency bond-buying programme of up to £65billion.

Though markets have calmed down since then, the asset management industry remains severely impacted by a widespread drop in consumer and investor confidence.

In its interim results, Man Group said most major asset classes had ended the period in negative territory as markets were impacted by Russia’s full-scale invasion of Ukraine and interest rate hikes by central banks in response to rising inflation.