(Bloomberg) -- Man Group Plc reported $5.5 billion in outflows during the third quarter, the biggest drop in at least four years after a client withdrew its funds to invest passively.
The world’s largest publicly traded hedge fund firm said assets under management declined to $174.9 billion, due mainly to outflows it attributed to a single client in its systematic long-only fund, according to a statement Thursday. Net outflows were worse than a company-compiled analyst estimate of $5.1 billion.
Hedge funds have been grappling with redemptions, mirroring struggles in the wider asset management industry as investors increasingly shift from active funds to cheaper passive alternatives.
Man Group had previously warned of a $6.7 billion redemption in its half-year earnings report. The outflow was because of a “strategic decision to switch their entire equities allocation to a passively managed, index-based portfolio,” Man Group said in the statement.
Its shares have dropped more than 8% this year.
Man Group, which runs a range of investment products from hedge funds, quant money pools to long- only funds, said performance gains helped to partially offset the outflows.
--With assistance from Jenny Surane.
(Updates with details on client withdrawal throughout)
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