The speed at which money is being yanked from funds under management by Man Group picked up in the third quarter.

Funds under management at the end of September were 14% higher than three months earlier at $60bn, driven by the acquisition of FRM, which added $8.3bn to funds under management.

The market was alarmed, however, to see net outflows in the quarter increase to $2.2bn, compared with net outflows of $1.4bn in the second quarter, although Man said these were concentrated in lower margin product lines.

Investments increased by $0.5bn in the quarter, with the majority of GLG alternative funds performing positively in the quarter and AHL, its flagship fund, having a positive investment movement of $0.3bn.

Man said that its cost saving programmes remain on track and its "financial position remains strong" with around $500m of surplus regulatory capital.

Peter Clarke, Chief Executive of Man, said: "The flow environment continues to be challenging and this was reflected in lower sales in the quarter. Redemptions were in line with the levels experienced in the second quarter which resulted in increased net outflows, albeit in lower margin product lines. Investor sentiment, and consequently the outlook for flows, continues to be subdued."

Consensus estimates for the full year ending December 31st 2012 are for pre-tax profits of £96.14m on turnover of £725.70m. With prospective earnings per share of 5.11p it is on a prospective price earnings ratio of 18.1.

For their part, analysts at Credit Suisse had this to say: "Net outflows during the third quarter 2012 were 2.2bn dollars (vs. Credit Suisse's estimate of 2.1bn dollars) vs. -1.4bn dollars in the second quarter of 2012 with a quarter-on-quarter increase attributable to weaker sales whilst redemptions were modestly lower quarter-on-quarter.

"Management re-iterated that the previously announced cost savings remain on track, but we believe these are now factored into the share price and a sustained improvement in AHL performance (circa 14% below HWM) will be required to drive the shares higher. We leave our target price unchanged at 94p and retain our Neutral rating. The shares are trading on an estimated 2013 fiscal year price-to-earnings multiple of 14.9-times which appears fully valued, in our view."


CM

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