Man Group fails to offset redemptions Man Group, the world's largest listed hedge fund, reported a small increase in funds under management in the first quarter but continued to suffer net outflows as investors worried about poor performance at its flagship computer-driven fund. Returns of $2bn on investments meant that funds under management increased from $58.4bn at the end of December to $59bn. This was despite net outflows of $1bn, as sales of $3.1bn were outweighed by redemptions of $4.1bn. IN Financial Services "After a strong start to the year, markets came back under pressure in March," said Peter Clarke, chief executive. Against this backdrop, redemptions reduced [from $5.6bn in the previous quarter] but investor sentiment remained fragile and we are yet to see an increase in sales. The AHL computer program exploited market turmoil to help Man deliver a 33 per cent return in 2008, but has since suffered a marked decline in performance. Despite the acquisition of rival GLG Partners in 2010, Man's shares have lost more than two-thirds of their value since the start of that year. Leading investors have warned that Mr Clarke will come under pressure to resign if performance does not improve in the next few months. Man has partly blamed economic intervention by governments for AHL's poor performance, arguing that it has disrupted the market momentum on which the program relies. AHL's performance turned negative towards the end of the quarter, in which it suffered net outflows of $700m, and the fund remains 14 per cent below its peak value on a weighted average basis. However, Mr Clarke said the "benefits of innovation and investment at AHL are starting to show through." Performance at GLG was better, with two of its funds achieving returns of 10 per cent, and three-quarters of its funds at or within 5 per cent of the so-called high water mark at which they can charge performance fees. Mr Clarke said Man was on track to achieve the $75m of cost savings promised in January. Sarah Ing, analyst at Singer Capital, said: "Expectations have been reduced quite significantly recently, and this statement is in line with those reduced expectations." But she added that ousting Mr Clarke was unlikely to transform the company's prospects: "I don't see what a management change would do, unless it's a sale of the business."