Moody's affirms Man Group ratings

Moody's Investors Service said it affirmed its A3 rating to Man Group plc.

Moody's said the A3 rating is a reflection of Man Group plc's continuing strong cash flows, profitability and increasing debt levels, as well as its controlled gearing. Man is one of the leading players in the alternative asset management industry with a long track record and an experienced management team.

While it is unlikely that Man's asset management business will continue to grow at the same pace as it has in the past few years, both through organic growth and acquisition, the company has built an attractive product mix ranging from hedge funds, structured guaranteed products and managed futures funds that helps it to retain its competitive position in the industry, and to achieve strong sales, even when the equity market is recovering.

Moody's said fee income levels are likely to remain strong in the near future due to pricing structures in the alternative investment field and an increasing concentration in structured products, which provide a sticky asset base. Man's diversification in terms of customers and business segments and its ability to generate returns in both down and up markets also contributes to more stable income levels compared to traditional asset managers.

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