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Key performance indicators (KPIs)


Our four financial KPIs as listed below illustrate and measure the relationship between the investment experience of our fund investors, our financial performance and the creation of shareholder value over time.

These KPIs are used on a regular basis to evaluate progress against our strategic priorities: investment performance; creating options for growth; distribution effectiveness; and efficiency.
Investment performance
Investment performance
Source: Man Annual Report 2013
The investment performance KPI measures the net investment performance for our three managers (AHL, GLG, and FRM), represented by key funds, against relevant benchmarks. The target for this KPI is to exceed the relevant benchmarks. The key strategies are measured against relevant benchmarks; AHL versus three key peer asset managers (the target being to beat two of the three peers), GLG versus HFRX and FRM versus HFRI Fund of Funds Conservative Index. The performance of the key funds compared to the benchmarks gives an indication of the competitiveness of our investment performance against similar alternative investment styles offered by other investment managers. This measures our ability to deliver superior long-term performance to investors. We achieved one out of the three performance targets. AHL met the target for 2013 as the performance of their key fund exceeded the relevant benchmark. GLG and FRM, whilst recording positive performance, were both below the benchmark in 2013.
 
Net flows
Net flows
Source: Man Annual Report 2013
This KPI measures net FUM flows for the period as a percentage of opening FUM, with net flows defined as gross sales less gross redemptions. Net flows are the measure of our ability to attract and retain investor capital. FUM drives our financial performance in terms of our ability to earn management fees. Net flows were below target in 2013 with a net outflow of 6.3%, compared to a net outflow of 11.1% for the year to 31 December 2012, reflecting the difficult trading environment, in particular for AHL, partly offset by inflows for GLG in the second half of the year.
 
Adjusted management fee EBITDA margin
Adjusted management fee EBITDA margin
Source: Man Annual Report 2013
This KPI measures adjusted management fee EBITDA as a percentage of net revenues (gross management fee revenue and income from associates less external cash distribution costs). Our adjusted management fee EBITDA margin is a measure of our underlying profitability. The adjusted management fee EBITDA margin of 36.0% was within the target range for the year ended 31 December 2013. This margin is likely to continue to decline with the rolling off of higher margin guaranteed product FUM.
 
Adjusted management fee EPS growth
Adjusted management fee EPS growth
Source: Man Annual Report 2013
This KPI measures our adjusted management fee EPS growth, where adjusted management fee EPS is calculated using post-tax profits excluding net performance fees and including the cost of the dividend on the Perpetual Subordinated Capital Securities, divided by the diluted number of shares. Adjusted management fee EPS growth measures the overall effectiveness of our business model, and drives both our dividend policy and the value generated for shareholders. The adjusted management fee EPS growth was below target for 2013 primarily as a result of the decline in management fee revenue and the overall gross margin, partly offset by reduced costs.
 

There is no guarantee of trading performance. Past or projected performance is no indication of future results.

Key Performance Indicators
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