(RTTNews) - Man Group plc (EMG.L), a British alternative investment management business, on Thursday reported a sharp drop in profit for the first half of fiscal 2010, as revenues declined considerably due to lower Funds under Management, or FuM. However, the results turned out to be better than what the company had projected in a trading update in late September. The company also revealed significant improvement in private investor redemptions.

Announcing the interim results for the half year ended September 30, 2009, the company reported six-month profit attributable to equity holders of $248 million or 13.8 cents per share, compared to $507 million or 28.8 cents per share in the same period last year. Adjusted for a gain arising from residual interest in brokerage assets and restructuring costs, earnings for the first half ended September 30 was 13.1 cents per share.

Pre-tax profit plunged to $302 million from $622 million in the prior year period. The company had said last month that it expects pre-tax profit for the first half of the fiscal year to decline from the previous year, with net management fee income dropping sharply from last year. The company said then that it expects pre-tax profit to be around $280 million.

Revenue declined to $692 million from $1.32 billion in the same period last year. Management and other fees plunged to $649 million from $1.08 billion due to reduced level of average assets under management. Performance fees slumped to $43 million from $236 million in the prior year.

Net management fee income for the latest period reduced to $245 million from $569 million reported last year. The company had estimated $240 million in net management fee income last month.

Net performance fee income dropped to $47 million from $162 million, but was above the $30 million projection issued last month. Funds under management, or FuM, at the end of September 30, 2009 was $44.0 billion. In the six months ended September 30, 2008, FuM stood at $67.6 billion. FuM at the end of June 30, 2009 was $43.3 billion. The company attributed the quarter-over-quarter increase to private investor sales and a considerable improvement in private and institutional investor redemption rates between the first and second quarters. Man added that FuM at the end of October was broadly unchanged from the end of September.

The company noted that private investor inflows remained strong during the first half of fiscal 2010, with good flows from Japan, Hong Kong, the Middle East, Europe and Latin America. Private investor investment performance was driven by AHL funds. Private investor sales for the half year were $5.0 billion, compared to $7.1 billion last year. In the second half of fiscal 2009, private investor sales were $4.2 billion.

Private investor redemptions reduced to $2.3 billion from $3.0 billion last year, and $6.1 billion in the second half of fiscal 2009.

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