Man Group Mandate With Australia Wealth Fund Drops by $1 Billion

Man Group, a prominent global investment firm, has experienced a significant reduction in its mandate with the Australia Wealth Fund, with the value of its hedge fund assets under management decreasing by A$1 billion (S$875 million). This change, announced in March 2023, reflects a strategic shift in the Future Fund's investment approach and has implications for both parties involved.

The Future Fund, Australia's sovereign wealth fund, has been increasingly focusing on illiquid assets and alternative investments, allocating over 40% of its A$223 billion portfolio to hedge funds, private equity, venture capital, and unlisted infrastructure and property. This strategic shift has led to a re-evaluation of the fund's external managers, including Man Group.


Man Group's performance in managing the Future Fund's hedge fund assets has been a significant factor in the mandate reduction. While the fund returned 10.1% in the year to March 2023, the 10-year annual return of 8.6% may not have met the Future Fund's expectations for outperformance. The fund's "joined-up whole-portfolio" approach, which prioritizes themes and best portfolio expressions regardless of asset class, may have contributed to the decision to reduce Man Group's mandate.

Market conditions and external factors have also played a role in the mandate reduction. The Future Fund's new rules, requiring periodic disclosure of investment holdings, may have influenced the fund's decision to reallocate assets among its external managers. Additionally, the fund's focus on illiquid assets and long-term outperformance may have led to a reassessment of its hedge fund allocations.


The reduction in Man Group's mandate has significant implications for the Future Fund's overall investment strategy and performance. The fund's increased focus on illiquid assets and alternative investments may lead to improved long-term performance, as these asset classes have historically provided higher returns and lower volatility. However, the fund's ability to manage risk and maintain liquidity will be crucial in achieving its objectives.

For Man Group, the reduction in mandate size affects its exposure to the Australian market and regional diversification strategy. The firm may need to explore new opportunities and expand its client base to maintain its revenue and profitability projections. The potential reasons behind the mandate reduction, such as performance or strategic shifts, may impact Man Group's future business with the Future Fund and its ability to attract new clients.

In response to this change, Man Group may need to make strategic adjustments to its portfolio and investment approach. The firm could focus on enhancing its performance in the alternative investments sector, developing new products or services, or expanding its client base to offset the impact of the mandate reduction. These adjustments could help Man Group maintain its competitive position and continue to grow its business.

In conclusion, the reduction in Man Group's mandate with the Australia Wealth Fund reflects a strategic shift in the Future Fund's investment approach and has implications for both parties involved. The fund's increased focus on illiquid assets and alternative investments may lead to improved long-term performance, while Man Group must adapt its strategies to maintain its competitive position in the market.