Funds rise boost fees at Man Group

THE stock market recovery has been good for fund management group Man which said today profits for the year ending tomorrow will be at the top end of expectations.

That means they will come in nearer the $790m (£420m) forecast by Bear Sterns than Lehman Brothers' prediction of $735m.

Man has continued to win business despite less-volatile share markets. It said fee income would be 25% higher than last year and well above expectations, reflecting the fact that the amount of funds under management rose from $38.7bn to $43bn over the last year.

All its major funds will have earned extra fees for matching or beating their performance targets, although this will still be lower than last year's with a smaller contribution from its flagship AHL fund. Man said earnings per share are likely to be around 20% higher than last year's 103p a share.

However,Credit Suisse First Boston said that end-March assets under management of $43bn was slightly below expectations and it is cutting 2006 estimates accordingly. CSFB is reducing its earnings per share estimate for the year ending March 2006 by 3.5% to 185.8 cents to reflect the lower forecasts. It has also cut its net sales estimate for next year to $3bn from $4.2bn.

Meanwhile, Merrill Lynch said Man's pre-close update is positive, stating that pre-tax profits will be at least in line with the top end of market expectations. The broker reiterated its 'buy' advice.