Man Group, the world's largest listed hedge fund firm, said it expected fee income and earnings per share to have risen by about a third in the six months to the end of September, sending its shares to a record high.

Net management fee income will rise by 35 percent in the first six months of the year from the same period a year before, Man said in a trading update on Friday, while net performance fee income will be up around 25 percent.

Diluted earnings per share on total operations should be up about 35 percent, the company said, while total assets under management would be more than $56 billion (28.8 billion pounds) at the end of September.

Shares in Man jumped to a record 467 pence in early trade, surpassing a previous high of 460 1/2p set in May, and were up 3.8 percent at 460p by 07:41 GMT (8:41 a.m. British time), outperforming the blue chip FTSE 100 index which rose 0.2 percent.

Man's figures were at the higher end of expectations, driven by strong sales growth, said Bruce Hamilton, analyst at Morgan Stanley.

Sales performance has been pretty broadly based, Hamilton said, noting that the firm appeared not to have been adversely influenced by some falls in the net asset value of its flagship AHL managed futures fund. Hamilton said AHL is down about 10 percent from its peak.

Managed futures funds make directional bets on stocks, bonds, currencies and commodities using or buy or sell signals from computer models.


Despite a recent period of sluggish performance by parts of the hedge fund sector, investors have continued to pour money into these investment vehicles as they diversify away from traditional assets such as listed stocks and bonds.

Man said it expected sales for the six month period at $10.4 billion (5.6 billion pounds), split between private investor and institutional investment products. It expected brokerage net income to be up by more than 40 percent.

Man estimated sales for the three months to September 30 of $5.1 billion (2.7 billion pounds).

Man, like a number of other investment firms, had an exposure to Amaranth Advisors LLC, the Connecticut hedge fund that lost billions of dollars in natural gas trades in recent weeks, according to data from the U.S. Securities and Exchange Commission.

However the UK company's trading statement made no reference to Amaranth.

Man Glenwood Lexington Associates Portfolio LLC, one of Man Group's divisions, had a $9.9 million (5.3 million pound) stake in Amaranth, based on figures filed on June 30.

Private investors withdrew $800 million (427 million pounds) and institutions pulled out $1.3 billion (694 million pounds) in the latest three month period, the company said.

Man Group is reviewing the future of its brokerage arm, Man Financial. The firm is to issue interim results on November 9.

Earlier this month, the company said chief executive Stanley Fink will step down from his post.

Fink, CEO since 2000, has helped to turn the former sugar trading company into a hedge fund powerhouse. He will be replaced by Man's Finance Director Peter Clarke. Clarke takes up the post from April 1, 2007, when Fink will become non executive deputy chairman.