Man Group Annual Report 2015

FY2015 Annual Report · Man Group

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A D I V E R S I F I E D M A N G R O U P

Man Group plc
Annual Report
for the year ended 31 December 2015

M A N G R O U P
A N N U A L R E P O R T
2 0 1 5

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M A N G R O U P O V E R V I E W

Man Group is one of the world’s largest independent active
investment managers, and a leader in liquid investment
strategies. Headquartered in London, Man has a developed
distribution network, offices in every major financial region and
is regulated in 13 jurisdictions. Man operates an integrated
business model with all back and middle office functions,
together with sales and marketing handled centrally, servicing
our four investment engines as described below.

E M PLOY E E S

1,230

F U N D S U N D E R M A N AG E M E N T
( F U M )

$78.7bn

See pages 12 to 13 for more details

Man AHL (AHL) is a quantitative
investment manager with an
extensive history of performance
and innovation and funds under
management of $16.9 billion.

A pioneer in the application of
systematic trading, AHL has
been serving institutional and
private clients since 1987 and
has a range of momentum and
non momentum strategies.

AHL’s 115 investment
professionals are based in
London, Oxford, Hong Kong
and Pfäffikon.

Acquired by Man Group in
2012, Man FRM (FRM) is a
hedge fund investment specialist
with $12.3 billion of funds
under management and a
predominantly institutional
client base.

FRM has an open architecture,
full service hedge fund platform
including partnership solutions,
a leading managed account
platform and commingled
strategies.

FRM’s 52 research and
investment staff are based in
London, New York, Tokyo,
Guernsey and Pfäffikon.

See pages 18 to 19
for more details

See pages 22 to 23
for more details

Founded in 1995 and acquired
by Man Group in 2010, Man
GLG (GLG) is a discretionary
fund manager with funds under
management of $30.5 billion that
delivers alternative and long only
investment strategies across
asset classes, sectors and
geographies.

The majority of GLG’s 141
investment professionals are
based in London but it also has
investment teams in New York,
Hong Kong and Pfäffikon.

GLG has a range of institutional
and private clients from across
the globe.

Established in 1989 and acquired
by Man Group in 2014, Man
Numeric (Numeric) is a Boston-
based, quantitative equity
manager with $19.0 billion
of funds under management
invested across almost every
equity market in the world
through long only and long
short strategies.

Numeric’s 29 investment
professionals manage assets
for institutional clients globally,
including corporate and public
pension plans, foundations,
endowments, and sovereign
funds.

See pages 20 to 21
for more details

See pages 24 to 25
for more details

O U R J O U R N E Y

Over the last five years, Man has become
a larger, more diversified provider of liquid
investment strategies, with a greater focus
on serving institutional clients. We have
reduced our cost base to a level which
reflects the economics of our business
and flows.

2 010 1

2 015 2

F U M (BI LLIO N)

39.4

78.7

BY M A N AG E R

AHL
GLG
FRM
Numeric

BY PR O D U C T

Guaranteed
Alternative
Long only

BY C L I E N T
T Y PE

Institutional
Retail

BY C L I E N T
D O M I C I L E

EMEA
Asia
Americas

C O N T E N T S

Strategic report
Man Group overview
Our journey
A diversified Man Group
2015 highlights
Chairman’s statement
Chief Executive’s review
Our business model
Strategic framework
Progress against strategy
Investment Management review
Chief Financial Officer’s review
Risk management
People and corporate responsibility
Man Group’s literary sponsorships
Charitable Trust

IFC
01
02-07
08
09
10
12
14
16
18-25
26
34
38
43
44

1 As at 31 March 2010

2 As at 31 December 2015

Corporate governance
Board of directors
Corporate governance report
Audit and Risk Committee report
Nomination Committee report
Directors’ remuneration report
Directors’ report

Notes to the Parent Company
financial statements
Five year record

Other information
Shareholder information

46
49
57
61
64
88

136
138

139

Financial statements
90
Directors’ responsibility statement
92
Independent auditors’ report
Group income statement
96
Group statement of comprehensive income 96
97
Group balance sheet
98
Group cash flow statement
99
Group statement of changes in equity
100
Notes to the Group financial statements
135
Parent Company financial information

The Strategic report, set out on
the inside front cover and on
pages 1 to 45, was approved
by the Board and signed on its
behalf by: Emmanuel Roman,
Chief Executive Officer

Man Group plc Annual Report 2015 01

A broad range of
investment styles

Over the past five years we have broadened
our portfolio of businesses and those businesses
in turn have broadened their range of products
and strategies.

Man Group’s investment managers have
expertise across a diverse range of strategies
to ensure that the firm can offer products
to meet differing investor appetite for risk
and rewards.

We manage over $35 billion in quantitative
strategies through AHL and Numeric. AHL is a
systematic investment specialist that focuses
on delivering a range of absolute return, long-
only and momentum-based quantitative funds.
Numeric is a fundamentally driven quantitative
asset manager with disciplined, systematic
investment processes offering long only,
active extension, and hedged equity strategies
across regions, styles, and capitalisations.

Our discretionary expertise focuses on
equities and credit as well as multi-asset
investment strategies. GLG encompasses
multiple investment teams, that deliver
a range of absolute return and long only
strategies across asset classes, sectors
and geographies.

FRM is one of the largest, independent
alternatives specialists based in Europe
with a predominantly institutional client base.
Responsible for open-architecture hedge
fund and alpha strategy solutions for
institutional investors, including fund of
hedge funds, client advisory solutions,
outsourced research and consulting.

FUM by style

$78.7bn

Equities
Momentum
Credit & convertibles
Managed accounts
Fund of funds
Multi-strategy

$bn

38.1
11.9
11.4
5.8
6.5
5.0

Left to right
Pierre Lagrange, Chairman, Man Asia and Senior Managing Director, Man GLG
Robyn Grew, Global Head, Legal & Compliance
Luke Ellis, President, Man Group

02 Man Group plc Annual Report 2015

GUARANTEEDALTERNATIVELONG ONLYfuturesA DIVERSIFIED MAN GROUP“ First, foremost and always, we
focus on delivering superior risk
adjusted performance.”

Man Group plc Annual Report 2015 03

FOFsEQUITY SYSTEMATICfuturesSTRATEGIC REPORT
Serving clients
through a global
distribution framework

Over the past five years our business has become more
institutional in nature. More recently we have been the
beneficiary of a trend whereby large institutional clients
seek to put more money to work with fewer managers.

With a well established network of 12 offices
in key locations and developed regulatory
relationships in all of the markets in which we
operate, Man Group has a powerful level of
insight into investor preferences as well as
regulatory requirements.

Our regional offices are predominantly staffed
by local people who provide investors and
distributors with specialist regional expertise.

S A L E S

Man Group operates two distinct distribution
models, marketing directly to institutions whilst
accessing private investors via third-party
intermediaries.

$22.9bn

Net inflows of $0.3bn in 2015.

Client service is an essential part of our growth
strategy. Our extensive global distribution
network, long established local relationships
and high quality technology enabled investor
reporting give us a competitive advantage.

S A L E S PE O PL E

122

Left to right
Eric Burl, Co-Head, Global Sales & Marketing and Head of Man Americas
René Herren, Deputy Head, Global Sales & Marketing
Tim Rainsford, Co-Head, Global Sales & Marketing

04 Man Group plc Annual Report 2015

A DIVERSIFIED MAN GROUP

“ Clients and their
interests are at the heart
of everything we do.”

Man Group plc Annual Report 2015 05

STRATEGIC REPORT
A range of options for
long-term growth

We have a diverse business with many opportunities
for long-term growth and a set of options over a range
of uncorrelated performance fee streams.

In addition to growing assets through
performance and sales we look to develop
the business by attracting talent, adding
investment teams and taking advantage
of acquisition opportunities where we can
generate an attractive return on capital.

We offer an entrepreneurial investment
management culture within an institutional
framework. Through this, we are able to attract
high quality talent which provides further
options for growth.

Growth may be supplemented through
M&A, taking advantage of acquisition and
consolidation opportunities where we can
generate an attractive return on capital. Our
capital management policy of paying out net
management fee profits to shareholders and
building surplus capital from performance fee
profits gives us the flexibility to do this.

FUM acquired through recent acquisitions

$22.3bn

Numeric
Pine Grove
Silvermine
NewSmith
BAML fund of funds

$bn

15.2
1.0
3.8
1.2
1.1

Emmanuel Roman, Chief Executive Officer

06 Man Group plc Annual Report 2015

A DIVERSIFIED MAN GROUP“ We continue to focus on
developing and diversifying
our business, through select
acquisitions and hiring senior
talent, providing further options
for growth and broadening
our offering to clients.”

Man Group plc Annual Report 2015 07

STRATEGIC REPORT
H I G H L I G H T S
2 0 1 5

– 8% growth in FUM driven by acquisitions
– Adjusted profit before tax down 17%

on 2014 due to lower AHL performance
fees

– Strong cash generation with adjusted

EBITDA of $422 million, a margin of 39%

– Statutory pre-tax profit of $184 million

(2014: $384 million)

– Mixed performance in the year to

31 December 20151: AHL Diversified
Programme -2.7%; GLG Multi-Strategy
+6.1%; FRM Diversified II strategy +1.0%;
Japan CoreAlpha strategy slightly
outperformed its relevant benchmark;
and Numeric net asset weighted
outperformance of 3.0%2

– Acquisitions completed in 2014 and
early 2015 now integrated into the
business

– Regulatory capital surplus of $453

million at 31 December 2015

– Proposed dividend for the year equating
to adjusted management fee earnings
per share of 10.2 cents per share.
Proposed final dividend of 4.8 cents per
share. Payable at a rate of 3.40 pence
per share. Total dividend for the year up
9% in sterling

1 Figures shown net of representative management and performance fees.
2 Numeric’s net asset weighted alpha for the year to 31 December 2015 is calculated
using the asset weighted average of the performance relative to the benchmark for
all non-restricted strategy composites (representing approximately two-thirds of
Numeric’s FUM) available net of the highest management fees and, as applicable,
performance fees that can be charged.

F U N D S U N D E R M A N AG E M E N T
( F U M )

S A L E S

$78.7bn

$22.9bn

Up 8% from $72.9bn at 31 December
2014.

Up 5% from $21.9bn for the year ended
31 December 2014.

N E T I N F LOW S

R E V E N U E

$0.3bn

Compared to net inflows of $3.3bn in the
year ended 31 December 2014.

$1,135m

Gross revenue comprised $833m of
management fees and $302m of
performance fees. Revenue was $1,150m
for the prior period.

A D J U S T E D PR O F I T
B E FO R E TA X

$400m

S TAT U TO RY PR O F I T
B E FO R E TA X

$184m

Comprises adjusted net management fee
income of $194m and net performance
fee income of $206m. Adjusted profit
before tax for year ended 31 December
2014 was $481m.

A full reconciliation between the statutory
profit and adjusted profit for the year is
given in Note 2 of the financial statements.
The statutory profit before tax for the year
ended 31 December 2014 was $384m.

A D J U S T E D M A N AG E M E N T
F E E E A R N I N G S PE R S H A R E

A D J U S T E D D I LU T E D
E A R N I N G S PE R S H A R E

10.2¢

21.1¢

Adjusted management fee earnings per
share for the year ended 31 December
2014 were 10.1 cents.

Down 14% compared to the year ended
31 December 2014.

S TAT U TO RY E A R N I N G S
PE R S H A R E

10.0¢

A reconciliation between statutory and
adjusted diluted earnings per share is
given in Note 11 to the financial
statements. Diluted profit per share for
the year ended 31 December 2014 was
20.5 cents.

08 Man Group plc Annual Report 2015

C H A I R M A N ’ S S T A T E M E N T

Jon Aisbitt
Chairman

OV E RV I E W O F T H E Y E A R
2015, and the second half of the year in
particular, was a period of extreme volatility
across all asset classes, heavily influenced by
political and economic uncertainty in China and
globally. This created challenging trading and
performance conditions for Man and tested
investor appetite for risk.

In this context, investment performance across
Man’s range of strategies was reasonable and
we recorded a small net inflow for the year. As
the headline results on the opposite page show,
we delivered solid profitability with adjusted
management fee profits in line with 2014, and
performance fee profits down following a very
strong year for AHL in 2014. The Board focuses
on adjusted profit as this reflects the recurring
revenue and costs that drive our cash flow
generation. Statutory profit was $184 million
compared to a statutory profit of $384 million
in 2014 due to lower performance fee profits,
an impairment of FRM goodwill at the half year
and an increase in the future earn-out payment
to Numeric as the acquisition has performed
significantly better than expected.

B OA R D FO C U S D U R I N G 2 015
With the cost reduction programme complete
and an improvement in the Group’s capital
efficiency, the focus of the Board during the
year centred on delivery of investment returns,
organic growth and talent management.

The Board spent a significant amount of time
reviewing the progress and performance
of the recently acquired businesses and
management’s delivery of value against
plan. We also monitored how well these
businesses had been integrated onto the
Man platform, ensuring that they were being
managed appropriately from an operational risk
perspective. We are particularly pleased with
the progress of the Numeric acquisition and
that the smaller new businesses have added
both scale and breadth to the product platform.

We spent time assessing the performance of
the new investment management talent that
has been hired into the business over the past
few years, particularly at GLG. We are pleased
that a number of the hires have built compelling
track records and are starting to see traction
from an asset raising perspective.

Managing change is a key requirement in
today’s fast moving markets and we recognise
that succession planning and building a
suitably deep and broad talent pool are key
to our continued success. The promotion of
management depth and ambition has been a
key area of focus during the year and we have
spent time discussing with the executives their
ongoing work to promote career development
and mobility of talent within the business.

In addition, the Board has spent time discussing
people and the culture of the business,
encouraging management in its promotion
of diversity at all levels of the business and
monitoring the implementation and impact of
Man’s set of core business values. An employee
survey was undertaken during the year and the
Board reviewed, with management, the results
of this survey and the actions that were being
taken to address the key themes emerging.

D I V I D E N D
In line with our previously stated policy, the
Board has announced a recommended final
dividend of 4.8 cents per share, subject to
approval by shareholders at the 2016 AGM.
This year we have decided to retain all of the
surplus capital generated by the business
to fund potential acquisitions. Net of the
proposed dividend, we currently have surplus
capital of approximately $480 million. Last
year, management reviewed a large number of
acquisition opportunities but were unable to find
transactions on acceptable terms. The Board
believes that, given evolving market dynamics,
there is sufficient probability of finding attractive
acquisitions to execute in 2016 that we have
decided to retain all of our surplus capital.

Conditions may of course change and we will
review this decision throughout the year.

B OA R D C H A N G E S
After almost nine years as Chairman I will retire
from the Board at the AGM in May. It has been
a privilege to lead the Board through a period
of very substantial change for Man and I feel
that I am leaving the Group in capable hands.
We have in place a strong executive team who
over the past three years have created a more
diversified business with multiple options for
growth, and improved the Group’s operational
and capital efficiency.

I am delighted that Ian Livingston (Lord
Livingston of Parkhead) is to succeed me
as Chairman, subject to his reappointment
by shareholders at the AGM. Ian joined the
Man Group Board in January with almost two
decades of board level FTSE 100 experience,
most recently as Group Chief Executive Officer
of BT Group Plc (“BT”) from 2008 to 2013. He
has been a serving member of the UK House of
Lords since 2013 and was previously Minister
of State for Trade and Investment for the UK
Government from December 2013 to May 2015.
He brings with him experience of successfully
growing a complex international business and
navigating regulatory environments around
the world. He has a strong track record of
innovative leadership during a time of profound
change for BT that will be invaluable to the Man
Group Board and executive team.

In January, Richard Berliand was appointed
as a non-executive director and member of
the Board’s Remuneration Committee. It is
intended that Richard will succeed Phillip
Colebatch as Chairman of the Remuneration
Committee following the AGM in May. Richard
brings over 30 years of experience in the
financial services sector and has proved himself
a very capable leader during an extremely
challenging period for the industry. He will be a
highly valued adviser to our executive team.

I should like to thank Man’s employees for their
dedication and hard work during my tenure
as Chairman. I am confident that I leave the
Group with an excellent Board and executive
team able to confront the challenges ahead and
deliver value for shareholders.

J O N A I S B I T T
Chairman

Man Group plc Annual Report 2015 09

STRATEGIC REPORT
C H I E F E X E C U T I V E ’ S R E V I E W

2015 has been another challenging year in terms of trading
conditions and investor risk appetite. Against this backdrop
we continued to focus on delivering superior risk adjusted
returns for our clients, creating a more diversified product
offering, integrating our recently acquired businesses and
running the Group efficiently.

Emmanuel Roman
Chief Executive Officer

10 Man Group plc Annual Report 2015

OV E RV I E W
Performance across our investment managers
during 2015, while mixed was reasonable against
a difficult market backdrop. AHL’s momentum
strategies had a strong start to the year but
were impacted by reversals in the second
and fourth quarters. GLG’s equity long short
strategies had a good year and the majority of
its long only strategies ended the year ahead of
benchmarks, although certain strategies were
some way behind. Numeric posted strong net
outperformance versus benchmark and FRM’s
performance was solid. Flows were slightly
positive in the year with net outflows of $2.6 billion
in the first half of the year broadly offset by net
inflows of $2.9 billion in the second half of the year.
The acquisitions of Silvermine, NewSmith and
the BAML fund of funds portfolio at the beginning
of the year drove an 8% increase in funds under
management to $78.7 billion at 31 December
2015. Adjusted management fee profit before
tax was down 2% and adjusted management
fee EPS was up 1% at 10.2 cents. Total adjusted
profit before tax decreased however by 17%
compared to 2014 mainly as a result of lower AHL
performance fees. Our business continues to be
strongly cash generative with adjusted EBITDA
(a good proxy for operating cash flow) of $422
million in 2015 compared to $492 million in 2014.

P R O G R E S S A G A I N S T
S T R AT E G I C P R I O R I T I E S
PE R FO R M A N C E 1
Investment performance continues to be the
most important factor in our success.

AHL’s momentum strategies ended 2015
with performance ranging from –2.7% (AHL
Diversified) to +3.2% (AHL Evolution). Returns
were impacted by the sharp reversal in
European bond markets at the end of April and
in grain markets during June, and by volatility
in equities and FX, particularly in the fourth
quarter. By contrast, AHL’s multi-strategy
quantitative fund AHL Dimension, which has
assets of $4.1 billion, had a much better year
and was up 6.9%.

1 Figures shown net of representative management

and performance fees.

Numeric’s range of strategies performed
well in 2015 with overall net asset weighted
outperformance versus benchmark of 3.0%1.
The stronger performing strategies were the
active extension (130/30) international strategies
that outpaced their respective benchmarks.

2015 was a year of two halves for discretionary
hedge fund performance at GLG. While the
majority of our alternative strategies produced
solid alpha, returns were largely generated in
the first half. In the subsequent six months,
investors were forced to navigate violent
sector rotations while buffeted with bouts of
volatility. However, GLG’s alternative funds were
resilient; the flagship European Long Short
strategy posted a net return of 7.6% whilst
funds from the recently acquired NewSmith
business delivered strong performance,
highlighting a smooth integration. Within credit
and convertibles, GLG’s strategies generally
delivered positive returns against a backdrop of
US rate uncertainty and heightened volatility in
some sectors.

In equities, GLG’s long only strategies broadly
outperformed markets. The flagship Japan
CoreAlpha strategy built on its impressive long-
term track record, slightly outperforming the
TOPIX’s 2015 return of 12.1%. The Continental
European Growth strategy finished the year with
26% excess return and the Undervalued Assets
strategy returned 9.0% above the FTSE all-
share. A handful of strategies underperformed
with the Strategic Bond and North American
equity strategies underperforming their relevant
benchmarks by 5.2% and 10.7% respectively.

FRM products had mainly positive performance
during 2015 with FRM Diversified II making
a positive return of 1.0%, 0.5% ahead of its
benchmark.

Situations and we have added a number of
talented managers to our European Equity
alternatives team, including Moni Sternbach who
is managing our European Mid-Cap alternative
equity strategy. In the long only business we
appointed Guillermo Osses as Head of Emerging
Market Debt, while Simon Pickard and Edward
Cole joined the firm to run an Unconstrained
Emerging Market Equity strategy. Recent
hires continue to make progress; Pierre-Henri
Flamand’s Value Opportunities strategy has
performed well since its launch in 2014, Henry
Dixon’s Undervalued Asset strategy continues
to perform well and is raising assets with
FUM of over $450 million, while Rory Powe’s
European Equity strategy has had very strong
performance and we are beginning to market
that strategy.

At FRM, we completed the acquisition of the
fund of funds business of Bank of America Merrill
Lynch, adding a $1.1 billion portfolio of multi-
strategy and strategy-focused funds to FRM,
supported by a proven distribution platform.
From an asset raising perspective we made
good progress in our managed accounts offering
and were awarded a $2.0 billion mandate by a
large US-based State Pension Plan and two fund
of funds mandates from UK local government
pension schemes, totalling $0.4 billion during
the year.

To complement our organic growth, we
continue to look at other possible acquisitions,
in the private markets, fund of funds and long
only spaces, seeking to ensure we remain
disciplined on price, structure and cultural fit.
The asset management M&A environment was
very robust last year, and despite reviewing a
large number of opportunities we were unable
to find acquisition targets on reasonable terms.
We remain patient.

B U S I N E S S D E V E LO PM E N T
During the year we made good progress in
integrating the businesses acquired during 2014
and we continued to develop options for growth
across our investment businesses.

We saw strong organic growth at AHL during
the year with $2.1 billion of net flows. The
business continues to become more diversified
by product with over 60% of assets now in non-
traditional strategies. The Numeric business
continues to perform well and since acquisition
in September 2014, Numeric has raised gross
assets of $6.5 billion, with total FUM increasing
25% to $19.0 billion. During the year good
progress was made to integrate Numeric’s
operations onto the Man platform.

At GLG we completed the acquisitions of
Silvermine and NewSmith at the beginning of the
year and we continue to attract talent to broaden
out both our alternatives and long only product
offering. In the Alternatives business Himanshu
Gulati joined in early 2015 as Head of US Special

D I S T R I B U T I O N E F F E C T I V E N E S S
2015 saw a 5% increase in gross sales to $22.9
billion, with strong Numeric sales being partially
offset by lower sales of GLG equity long short
strategies compared to 2014. Sales for the
year included mandates from three different
institutional clients which were each over $1
billion. Redemptions during the year were
$22.6 billion, up from $18.6 billion in 2014, and
included $2.8 billion of redemptions from one
client in the Japan Core Alpha strategy despite
strong performance.

The majority of the demand continues to come
from institutions with institutional sales in the
period constituting 67% of total sales. Over
the past five years our business has become
much more institutional in nature with 74% of
FUM now run for institutions globally. Our third-
party retail business continues to be extremely
important to us, but we hope to be a beneficiary
over time of a continued trend whereby large
institutional clients seek to put more money to
work with fewer managers. This trend has been

1 Numeric’s net asset weighted alpha for the year ended 31 December 2015 is calculated using the asset weighted
average of the performance relative to the benchmark for all non-restricted strategy composites (representing
approximately two-thirds of Numeric’s FUM) available net of the highest management fees and, as applicable,
performance fees that can be charged.

seen in our own business over the last three
years and presents an opportunity for us in the
long run.

From a geographical perspective EMEA
continues to be our biggest market, with sales
from this region comprising 61% of the total
in 2015. The critical North American market
remains a key geographical focus for future
growth and $5 billion of total sales were from
the Americas in 2015, up around 160% from
2014. 24% of assets are now managed on behalf
of North American clients. Sales from the Asia
Pacific region comprised 17% of the total which
included three mandates totalling $1.6 billion.

E F F I C I E N CY
Having completed the cost reduction
programme ahead of schedule in 2014, our
focus in 2015 shifted towards sustaining
our focus on efficiency and ensuring that
our cost base enables us to address both
the opportunities and risks in our business
appropriately. We continue to invest in new
investment talent as outlined above and there
are a number of areas in which we are investing
in the infrastructure of our business which will
be reflected in increased capital expenditure
over the next few years.

Our balance sheet remains strong and liquid
and as we have previously outlined we have
increased the capacity of our seed capital
programme to help to grow the business as we
launch new products over time. Our surplus
capital stands at around $480 million proforma
for second half earnings and our final dividend
and accordingly we retain the flexibility to take
advantage of acquisition opportunities.

O U T LO O K
We continue to operate in a challenging and
uncertain environment, as amply demonstrated
by markets year to date. However after the
progress made against our strategic objectives
in 2015, we are better positioned as a Group to
grow our business profitably over time. We have
a more diversified offering to clients and a range
of attractive options for growth. If we are able to
continue to deliver superior risk adjusted returns
for our clients we will be able to grow assets
steadily by leveraging our global distribution.
As we continue to manage our business and
balance sheet efficiently, we can in turn provide
attractive returns for our shareholders.

I would like to conclude by thanking the
management team and everyone at Man for
the commitment, expertise and hard work they
have contributed this year enabling the firm to
continue to make good progress against each
of our strategic objectives.

E M M A N U E L R O M A N
Chief Executive Officer

Man Group plc Annual Report 2015 11

STRATEGIC REPORT

O U R B U S I N E S S M O D E L

The success of our business model begins and
ends with investment performance: our investment
managers must deliver strong, risk adjusted long-
term returns for our investors.

S
T

K
E
I
L

S
I
R

R
O

O
I
R
O

G
U

N
I
T
T
A
E

E
P

E
T
S

O P E R A T I N G
A N D A L L O C A T I N G
C A P I T A L
E F F I C I E N T L Y

G R O W T H

H I R I N G O R A C Q U I R I N G T H E
B E S T I N V E S T M E N T T A L E N T

12 Man Group plc Annual Report 2015

Performance

Distribution

Growth

Operating
efficiency and
capital discipline

Man Group’s investment managers have expertise
in a diverse range of strategies which offer
investment returns matched to investor appetite
for risk and reward. We aim to generate superior
risk-adjusted returns for our clients through the
quality of our research, the talent of our investment
managers and the strength of our operations and
risk infrastructures.

See pages 18 to 25 for our performance review

Man Group is able to offer a wide range of
liquid investment strategies and formats across
geographies to meet the needs of the investor.
These include quantitative and discretionary, long
only and long short, single and multi-manager.
We distribute our products and solutions directly
to institutions and to private investors via a unique
global network of intermediaries.

See pages 04 to 05 for more about distribution

We have a diverse business with many options for
long-term growth. In addition to growing assets
through performance and sales we look to grow
the business by attracting talent, adding investment
teams and taking advantage of acquisition
opportunities where we can generate an attractive
return on capital.

See pages 06 to 07 for more about growth

At the core of our investment management and
distribution is strong operational infrastructure,
risk management, people management and
governance, which ensures the sustainability of our
business model and enables us to take advantage
of new business opportunities. We strive to
maintain our operating discipline and manage our
balance sheet efficiency.

Man Group plc Annual Report 2015 13

STRATEGIC REPORT

S T R A T E G I C F R A M E W O R K

Markets remain volatile, creating a challenging and uncertain
environment in which to operate. Against this backdrop, we
continue to focus on the areas we can control and on creating a
diversified business with multiple options for growth, leaving us
better positioned to deal with different market conditions.

Strategic priorities

Risks

1 Performance
Generating superior risk adjusted returns
for our clients

Man Group identifies its principal risks across the firm and
assesses their likely impact. We measure and monitor the
size of our risks, and implement controls and transactions
to reduce and hedge exposures in order to ensure that they
stay within our risk appetite framework.

Related strategic
priority

2 Distribution
Ensuring distribution effectiveness

Investment underperformance risk
This is the key risk Man Group has to accept if it is
to undertake its business.

3 Growth
Developing options for growth across
our investment businesses

4 Operating efficiency and
capital discipline
Operating as efficiently as possible,
both from a cost and a balance sheet
perspective

See pages 15 to 16 for how we performed against our strategic
priorities

14 Man Group plc Annual Report 2015

Regulatory risk
Man Group is licensed in 13 jurisdictions, which
results in it being subject to a matrix of regulations.

1 2 3 4

Balance sheet market risk
The risk of Man Group losing capital due to a
decline in the value of the seeding book and/or the
Group having insufficient liquidity resources to meet
its obligations in volatile market conditions.

1 3 4

Operational risk
Resulting from human error, inadequate or failed
internal processes and systems or from external
events.

Information security risk
The risk of loss resulting from cyber-crime,
malicious disruption to our networks or from
the theft, misplacing, interception, corruption or
deletion of information.

Discretionary trading risk
The risk that investment managers either
intentionally or unintentionally fail to execute and/
or book trades correctly, or fail to adhere to
investment mandates or regulatory rules.

Credit/counterparty risk
A counterparty with which the funds or Man Group
have financial transactions fails to deliver back
investor or shareholder assets.

Legal risk
The global nature of Man Group’s business, with
corporate and fund entities located in multiple
jurisdictions and a diverse investor base make it
subject to a wide range of laws and regulations.

Reputational risk
The risk that an incident or negative publicity
undermines our reputation as a leading alternative
investment manager.

1 2 3 4

Key staff retention risk
The risk that a key person to the business leaves or
is unable to perform their role.

1 2 3 4

See pages 34 to 37 for our full risk profile

Key performance indicators (KPIs)

Remuneration

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.

Executive director remuneration is directly linked to strategy
and performance, with particular emphasis on matching
rewards to results over the long term.

Investment performance of
key funds against relevant
benchmarks

Net FUM flows for the period
as a percentage of opening
FUM (Target 0%–10%)

AHL – not met
FRM – met
GLG – met
Numeric – met

0.4%

Related strategic priority
1

Related strategic priority
1 2 3

Adjusted management fee
EBITDA margin (Target
25%–40%)

Adjusted management fee
EPS growth (Target 0%–20%
plus RPI)

27.2%

Related strategic priority
1 2 3 4

1.0%

Related strategic priority
1 2 3 4

See pages 26 and 27 for full key performance indicators

Linked to strategy
A substantial portion of executive director
remuneration is linked to success in implementing
the Company’s strategy.

Progress against the Group’s strategic priorities
and Group key performance indicators (KPIs)
provide key metrics for determining the short-term
annual cash bonus and the long-term deferred
bonus.

See pages 71
to 74 of the
Directors’
remuneration
report for more
information

Performance related
The variable components of total remuneration are
linked to performance, and the long-term deferred
bonus is awarded in shares further aligning
interests with shareholders.

See pages 71
to 74 of the
Directors’
remuneration
report for more
information

High pay requires high performance. Achieving the
maximum pay requires sustained high performance
over several years.

Long-term shareholder alignment
The structure of pay is designed to reflect the
long-term nature of the Group’s business. The
long-term deferred bonus is awarded in shares with
the vesting period set at three to five years after
each three-year performance period, creating a six
to eight-year period in total during which executive
reward is fully aligned with shareholder interests.

Shareholder engagement
The Remuneration Committee actively seeks
to understand shareholder preferences and be
transparent in explaining its policy and practice.
During 2015 the Remuneration Committee
Chairman met personally with a number of major
shareholders and certain shareholder voting bodies
to obtain feedback on the Remuneration policy and
to respond to any areas of interest or concern.

See pages 64
to 66 and pages
73 to 74 of
the Directors’
remuneration
report for more
information

See pages
65 and 70 of
the Directors’
remuneration
report for more
information

Man Group plc Annual Report 2015 15

STRATEGIC REPORT

P R O G R E S S A G A I N S T S T R A T E G Y

During the year we have made progress against the strategic
priorities set out in last year’s Annual Report, aimed at generating
superior risk adjusted returns for our clients and positioning the
firm for future growth, whilst controlling costs and maximising the
efficiency of our balance sheet.

Strategic priorities

Objectives we set in 2015

How we performed against those objectives Objectives for 2016

Performance
Generating superior risk adjusted
returns for our clients

– Continued focus on research at AHL to build new markets and

– 110 new markets added to AHL’s trading programmes during 2015

– Continued to focus on research at AHL by delivering new models

asset classes

– Key research staff at Numeric have had the opportunity to spend

and accessing new markets

– Collaboration between AHL and Numeric to further enhance

time working in London with their new colleagues

– Collaboration between AHL and Numeric to further enhance

research efforts in both managers

– Focus on improving areas of underperformance in GLG

alternatives strategies in 2014

– Significant improvement in GLG equity long short performance

research efforts in both managers

with the strategy delivering net returns of 7.6% in 2015

– Focus on improving areas of underperformance in certain GLG

alternatives and long only strategies in 2015

Distribution
Ensuring distribution effectiveness

– Market AHL’s momentum strategies off the back of strong

– $4.7 billion of gross sales at AHL in 2015 including $1.9 billion into

– Market AHL’s strategies given their solid three-year track record

performance in 2014

momentum strategies and $2.0 billion into AHL Dimension

– Continue to leverage Man Group’s global distribution capability to

– Develop and launch UCITS products at Numeric to build track

– $4.4 billion of gross sales at Numeric in 2015 and $6.5 billion since

grow assets in acquired businesses

records and market to investors over time

acquisition including approximately $2.0 billion related to leveraging

– Continue to improve coverage and asset raising in the US

– Leverage Man Group’s global distribution capability to grow assets

Man Group’s global distribution capability

– At FRM continue to partner with institutional clients to provide

in acquired businesses

– $5.0 billion of gross sales in North America in 2015 including a $2.0

managed account solutions and advisory services for their hedge

– Continue to improve coverage and asset raising in the US

billion mandate win from a state pension plan at FRM

fund allocations

– Continue to develop relationships with existing clients with a

focus on both asset raising as well as asset retention

Growth
Developing options for growth across
our investment businesses

– Continue to develop additional momentum and non-momentum

– Launched Evolution Frontier, which applies AHL’s core momentum

– Continue to innovate at AHL by delivering new strategies and

products at AHL

– Continue to look for high-calibre investment talent at GLG to

support the growth of our existing products as well as to support
the expansion of our alternatives and long only product offering
– Continue to look at other possible bolt-on acquisitions ensuring
that we remain disciplined on price, structure and cultural fit

models to an innovative set of markets

accessing new data

– Hired new teams at GLG focusing on Event Driven investing

– Continue to look for high-calibre investment talent at GLG to

and European Mid-Cap and a team that seeks to capitalise on

support the growth of our existing products as well as to support

US distressed opportunities in the alternatives business and an

the expansion of our alternatives and long only product offering

Emerging Markets team in the long only business

– Continue to focus on the US as a region for growth both from a

– Completed acquisitions of Silvermine and NewSmith. Silvermine

distribution and acquisition perspective

provides GLG with increased expertise in US credit markets and

– Continue to look at other possible acquisitions, for example in

the NewSmith deal helps to strengthen GLG’s equity platform,

private markets and long only strategies, ensuring that we remain

while enhancing our footprint in the Japanese market

disciplined on price, structure and cultural fit

– Enhanced FRM’s business with the completion of an important

new distribution relationship with Bank of America Merrill Lynch

through the acquisition of its fund of hedge funds offering

– Focus on sustaining our efficiency and ensuring that our cost base
enables us to address the risks and opportunities in our business
appropriately

– Integrate the operational functions of our acquired businesses
– Maintain focus on balance sheet efficiency including ensuring our

seeding portfolio is managed effectively

– Businesses acquired in 2014 and early 2015 now fully integrated

– Focus on sustaining our efficiency and ensuring that our cost

on the Man platform

base enables us to address the risks and opportunities in our

– Maintained cost discipline allowing for investment in infrastructure

business appropriately

in certain parts of the business

– Maintain focus on balance sheet efficiency including ensuring our

– Expanded seeding programme with a VaR limit of $75 million set

seeding portfolio is managed effectively

– Completion of $175 million share repurchase

Operating efficiency and
capital discipline
Operating as efficiently as possible,
both from a cost and a balance
sheet perspective

16 Man Group plc Annual Report 2015

Strategic priorities

Performance

Generating superior risk adjusted

returns for our clients

Objectives we set in 2015

How we performed against those objectives Objectives for 2016

– Continued focus on research at AHL to build new markets and

asset classes

– 110 new markets added to AHL’s trading programmes during 2015
– Key research staff at Numeric have had the opportunity to spend

– Continued to focus on research at AHL by delivering new models

and accessing new markets

– Collaboration between AHL and Numeric to further enhance

time working in London with their new colleagues

– Collaboration between AHL and Numeric to further enhance

research efforts in both managers

– Focus on improving areas of underperformance in GLG

alternatives strategies in 2014

– Significant improvement in GLG equity long short performance

research efforts in both managers

with the strategy delivering net returns of 7.6% in 2015

– Focus on improving areas of underperformance in certain GLG

alternatives and long only strategies in 2015

Distribution

Ensuring distribution effectiveness

– Market AHL’s momentum strategies off the back of strong

performance in 2014

– Develop and launch UCITS products at Numeric to build track

records and market to investors over time

– Leverage Man Group’s global distribution capability to grow assets

in acquired businesses

– Continue to improve coverage and asset raising in the US

– $4.7 billion of gross sales at AHL in 2015 including $1.9 billion into

momentum strategies and $2.0 billion into AHL Dimension

– Market AHL’s strategies given their solid three-year track record
– Continue to leverage Man Group’s global distribution capability to

– $4.4 billion of gross sales at Numeric in 2015 and $6.5 billion since
acquisition including approximately $2.0 billion related to leveraging
Man Group’s global distribution capability

– $5.0 billion of gross sales in North America in 2015 including a $2.0

billion mandate win from a state pension plan at FRM

grow assets in acquired businesses

– Continue to improve coverage and asset raising in the US
– At FRM continue to partner with institutional clients to provide

managed account solutions and advisory services for their hedge
fund allocations

– Continue to develop relationships with existing clients with a

focus on both asset raising as well as asset retention

Growth

Developing options for growth across

our investment businesses

products at AHL

– Continue to look for high-calibre investment talent at GLG to

support the growth of our existing products as well as to support

the expansion of our alternatives and long only product offering

– Continue to look at other possible bolt-on acquisitions ensuring

that we remain disciplined on price, structure and cultural fit

– Continue to develop additional momentum and non-momentum

– Launched Evolution Frontier, which applies AHL’s core momentum

– Continue to innovate at AHL by delivering new strategies and

models to an innovative set of markets

accessing new data

– Hired new teams at GLG focusing on Event Driven investing

– Continue to look for high-calibre investment talent at GLG to

and European Mid-Cap and a team that seeks to capitalise on
US distressed opportunities in the alternatives business and an
Emerging Markets team in the long only business

– Completed acquisitions of Silvermine and NewSmith. Silvermine
provides GLG with increased expertise in US credit markets and
the NewSmith deal helps to strengthen GLG’s equity platform,
while enhancing our footprint in the Japanese market

– Enhanced FRM’s business with the completion of an important
new distribution relationship with Bank of America Merrill Lynch
through the acquisition of its fund of hedge funds offering

support the growth of our existing products as well as to support
the expansion of our alternatives and long only product offering
– Continue to focus on the US as a region for growth both from a

distribution and acquisition perspective

– Continue to look at other possible acquisitions, for example in

private markets and long only strategies, ensuring that we remain
disciplined on price, structure and cultural fit

Operating efficiency and

capital discipline

Operating as efficiently as possible,

both from a cost and a balance

sheet perspective

– Focus on sustaining our efficiency and ensuring that our cost base

enables us to address the risks and opportunities in our business

appropriately

– Integrate the operational functions of our acquired businesses

– Maintain focus on balance sheet efficiency including ensuring our

seeding portfolio is managed effectively

– Businesses acquired in 2014 and early 2015 now fully integrated

on the Man platform

– Maintained cost discipline allowing for investment in infrastructure

in certain parts of the business

– Expanded seeding programme with a VaR limit of $75 million set
– Completion of $175 million share repurchase

– Focus on sustaining our efficiency and ensuring that our cost
base enables us to address the risks and opportunities in our
business appropriately

– Maintain focus on balance sheet efficiency including ensuring our

seeding portfolio is managed effectively

Man Group plc Annual Report 2015 17

STRATEGIC REPORT
M A N A H L
S C I E N C E A P P L I E D T O F I N A N C E

Established in 1987, Man AHL is a leading
quantitative investment manager with funds
under management of $16.9 billion. A pioneer
in systematic trading, AHL offers alternative
and traditional strategies to a predominantly
institutional client base, in a variety of funds
and customisable managed accounts.

Headquartered in London, AHL employs over
115 investment professionals in six locations
and benefits from a unique collaboration with
the University of Oxford.

Tim Wong
Chairman, AHL

Sandy Rattray
Chief Executive Officer, AHL

18 Man Group plc Annual Report 2015

S T R AT E G I E S OV E RV I E W
AHL broadly offers four types of investment
programme:
– Momentum: AHL’s institutional

flagship programme, AHL Alpha, uses
sophisticated algorithms to identify
trends. The original investment strategy
of AHL, trend following has been able to
profit in both rising and falling markets
and exhibits low correlation to other asset
classes, notably equities. In addition to
futures and forwards instruments that
are typically traded by trend-following
managers, AHL specialises in trading,
through the AHL Evolution Programme,
a range of non-traditional markets that
are highly liquid, typically OTC, and
are not widely traded by peers. These
include interest-rate swaps, credit and
power derivatives, for example, which
have been highly resilient to choppy
market conditions that resulted from
unprecedented levels of central bank
intervention in the years immediately
following the Credit Crisis. In 2015 AHL
broadened its trend-following offering
further through the AHL Evolution Frontier
Programme, which leverages operational
and execution strengths in order to
access less liquid markets.

– Multi-strategy: AHL’s flagship multi-
strategy programme, AHL Dimension,
comprises a broad mix of high-conviction
systematic models, spanning technical,
fundamental, and momentum styles.
It utilises a wide universe of highly
liquid markets covering the major asset
classes of equity, FX, fixed income
and commodities, and incorporates
an allocation to the AHL Evolution
programme. Because of the range of
strategies employed, multi-strategy
programmes are designed to perform in
a wide variety of market environments.
– Sector-based: These strategies allow
investors to access specialised, sector
or theme specific investment strategies
across equity, currency and volatility
markets.

– Alpha capture: These strategies use
quantitative techniques to capture the
best ideas from leading equity brokers
to construct long only portfolios.

D I V E R S I F I CAT I O N A N D
I N S T I T U T I O N A L I S AT I O N
Over the course of 2015, AHL continued the
transition to being a diversified quantitative
manager, whilst maintaining an emphasis on
momentum. The AHL business has become
more diversified by product (for example
the AHL Dimension and AHL Evolution
Programmes now comprise around 50% of
total AHL assets between them), and net flows
in AHL Dimension accounted for around 90% of
total net flows for Man AHL in 2015.

In addition, AHL’s shift to becoming a largely
institutional fund manager has occurred at the
same time as our increasing development of
new strategies: 74% of our clients are institutional
investors today. We have found that many
institutional investors around the world value a
rigorous systematic approach. In particular, the
fact that we are more transparent than most
other styles of investing has been important to
these clients. With no emotion involved in the
investing process, the mood or even presence
of any particular individual at AHL has rather little
day to day impact on performance.

G R OW T H
We are very positive on the future of systematic
investing. We live in a world where the amount
of available data is increasing at an incredible
rate – an oft quoted study suggests that 90% of
the world’s data is less than two years old. Only
computer-driven processes are able to harness
this amount of data and make sense of it. We
also live in a world where you are increasingly
likely to be flown in an aeroplane by computer,
where your car will contain an enormous
amount of computer code and will in the next
few years very likely become self-driving.

Our bodies are kept alive by complex algorithms
in hospital intensive care wards. So it would be
remarkable if systematic investing were not to
increase significantly.

There will of course be the naysayers, and it
remains the case that some types of information
are hard to process (corporate bond covenants
for example). But the idea that humans can
forecast and adapt to regime change while
systematic strategies cannot is untrue on
several levels. Humans have generally proven
quite poor at adapting to regime change, and
machine learning in particular can pick up very
rapidly on new environments. Much of our
research efforts are in this area today, and we
are excited about the future for AHL and for the
opportunity to serve our clients.

FUM by strategy

$16.9bn

Traditional trend following
Non-traditional trend following
Multi-strategy
Sector based, Alpha capture, other

$bn

6.7
5.2
3.0
2.0

Performance across AHL funds Annualised net returns

Fund (inception date)

1yr

3yr

5yr

Inception

AHL Alpha (17.10.95)
AHL Diversified (26.03.96)
AHL Evolution (26.09.05)
AHL Dimension (03.07.06)
HFRI Fund Weighted Composite Index (31.12.89)

1.5%
-2.7%
3.2%
6.9%
-1%

7.1%
8.1%
13.2%
8.5%
3.6%

3.6%
3.0%
14.7%
4.3%
2.3%

12.5%
13.2%
14.8%
6.3%
10.1%

Source: Man database
AHL Alpha – AHL Strategies PCC ltd: Class Y AHL Alpha USD from 25 Sept 2012 to 30 Sept 2013, AHL Alpha plc prior.
AHL Alpha (Cayman) Limited from 30 Sept 13. The track record has been adjusted to reflect the proposed fee structure
of the AHL Alpha Programme (1% management fee, 20% performance fee).

AHL Diversified – Man AHL Diversified (Guernsey) USD from 29 Oct 2012, Man AHL Diversified plc prior.

AHL Evolution – AHL (Cayman) SPC – Class A1 USD Shares from 30/11/12 linked to AHL Investment Strategies SPC:
Class E AHL Evolution USD Notes from 30/11/11 and prior to this AHL Strategies PCC Ltd: Class G AHL Evolution USD
Shares. AHL returns are shown on a month end to month end basis to be directly comparable to competitors. Hence
returns use estimates and will differ from the officially reported figures that are based on finals.

AHL Dimension is represented by AHL Strategies PCC Limited: Class B AHL Dimension USD Shares from 3 July 2006 to
31 May 2014, and by AHL Dimension (Cayman) Ltd – USD Shares from 1 June 2014. Performance is net of all fees.

Man Group plc Annual Report 2015 19

STRATEGIC REPORT

M A N G L G
G R E A T M I N D S , T H I N K I N G D I F F E R E N T L Y

2015 was an important year for Man GLG as we
celebrated our 20 year anniversary. GLG was originally
established in 1995 and has evolved over the past two
decades to become a leading discretionary fund
manager that offers a comprehensive range of
alternative and traditional strategies.

From the beginning, GLG was defined by its
entrepreneurial spirit and culture of excellence.
We have built on this culture over the last 20 years,
continuing to attract exceptional talent and broaden
our range of expertise, whilst remaining completely
focused on delivering performance to our clients.

Mark Jones
Co-Chief Executive Officer, GLG

Teun Johnston
Co-Chief Executive Officer, GLG

20 Man Group plc Annual Report 2015

S T R AT E G I E S OV E RV I E W
GLG manages a diverse range of alternative
and traditional investment strategies that
focus on equities and credit as well as multi-
asset investment strategies.
– Equities: GLG’s equities business

comprises a range of alternative and long
only strategies with investment expertise
covering each of the major regions
and specialist sectors. A wide range of
investment approaches and styles are
pursued by the various investment teams.

– Credit: GLG’s alternative and long only

credit strategies span the credit spectrum
and capital structure. Our alternative
credit strategy incorporates a diverse
range of approaches and asset classes
including relative value, distressed debt,
event driven, capital structure arbitrage
and convertible bond arbitrage strategies.
Our long only credit strategies include
investing in corporate bonds, convertible
bonds and asset-backed securities with a
range of approaches applied to each.

– Multi-asset: GLG’s Multi-asset strategies

consist of alternative and long only
strategies. Our multi-asset strategies
comprise a variety of investment
approaches and styles.

FO C U S A N D R E C E N T D E V E LO PM E N T S
We believe that success in discretionary fund
management is largely determined by the
calibre of investment professionals managing
our investment strategies and the strength of
the operating environment. We continually strive
to strengthen our business and recently have
focused on:
1. Broadening our long only offering
2. Improving our alternative product mix
3. Developing our structured credit capability

Our focus has been to add high calibre
investment teams within our long only business
in order to diversify our client offering. Within
equities, we hired a UK focused value team
and a European focused growth team during
2013/2014 while adding an Emerging Markets
strategy in late 2015. Our European growth and
UK value funds have both achieved first quartile
rankings since launch and have gained traction
in the marketplace. By contrast the Total
Return strategy which was launched in 2013
underperformed and as a result was closed in
the middle of 2015.

In terms of our alternative equities strategies,
we recently hired teams focusing on Event-
Driven investing and European Mid-Cap, both
of which are areas we believe have high alpha
potential. In early 2015, we also employed a
highly experienced team that seeks to capitalise
on US distressed opportunities. Additionally, we

continue to broaden the range of investment
strategies managed within our flagship
European Long Short fund.

Early 2015 also proved to be significant in terms
of merger activity, with the completion of the
acquisition of US CLO manager Silvermine
Capital Management in January, and the
acquisition of the investment management
business of NewSmith LLP. The Silvermine
transaction provides GLG with increased
expertise in US credit markets and expands
the firm’s North American presence. From a
similar perspective, the NewSmith deal helps
to strengthen GLG’s equities platform, while
enhancing our footprint in the Japanese market.

PR I O R I T I E S FO R 2 016
Our key focus will continue to be on delivering
strong performance. We will also aim to
broaden our product range as compelling
opportunities arise.

One such example is the development of our
Emerging Markets Fixed Income business.
We recently announced the hiring of Guillermo
Osses, a highly experienced and successful
Emerging Markets Fixed Income portfolio
manager. Guillermo joined GLG in early 2016
and will be based in New York. We aim to
launch a series of Emerging Market Fixed
Income strategies managed by Guillermo and
his team in H2 2016.

FUM by strategy

GLG track record 1 April 1997 to 31 December 2015

GLG Alternative Strategies
Dollar-Weighted Composite1
GLG Long Only Dollar
Weighted Composite2

MSCI World Net Total Return Index
hedged to USD monthly return
Citigroup World Government
Bond Index

600

500

400

300

200

100

$30.5bn

Equity alternative
Equity long only
Credit and convertibles alternative
Credit and convertibles long only
Multi strategy alternative

$bn

5.7
12.5
9.7
1.7
0.9

Source: Man database, Bloomberg and MSCI. There is no guarantee of trading performance and past or projected
performance is not a reliable indicator of future performance. Returns may increase or decrease as a result of currency
fluctuations. Please note that the HFRI index performance over the past 4 months is subject to change. World stocks:
MSCI World Net Total Return Index hedged to USD.

1 Represented by the GLG Alternative Strategies Dollar-Weighted Composite. GLG alternative strategy dollar-weighted
average returns are calculated as the composite performance of the alternative strategy funds and funds that have
closed, in addition to managed accounts managed in accordance with alternative strategies, weighted by the sum of
the prior month-end AUM.

2 Represented by the GLG Long Only Dollar-Weighted Composite. GLG long only dollar-weighted average returns are

calculated as the composite performance of the long only strategy funds and funds that have closed, in addition to
managed accounts managed in accordance with long only strategies, weighted by the sum of the prior month-end
AUM.

Man Group plc Annual Report 2015 21

STRATEGIC REPORT

M A N F R M
D Y N A M I C A N D O N - G O I N G P A R T N E R S H I P S

Man FRM is a global alternative investment specialist,
with a predominantly institutional client base.
Established in 1991, FRM joined forces with Man Group
in 2012. We provide an open architecture, full service
hedge fund offering, with customised and advisory
solutions, commingled strategies, a leading,
technologically innovative managed account platform
and Clarus, a sophisticated online reporting tool.

With 52 investment professionals based in London,
New York, Tokyo, Guernsey and Pfäffikon (Switzerland),
FRM manages $12.3 billion. Our multi-manager solutions
include multi-strategy and customised portfolios.

Keith Haydon
Chief Investment Officer, FRM

Michelle McCloskey
President, FRM

22 Man Group plc Annual Report 2015

A B R OA D E R O F F E R I N G
Since linking with Man Group, FRM has
broadened its capabilities in risk management,
research and hedge fund solutions provision,
while leveraging the benefits of a global
investment platform. In 2014, FRM successfully
enhanced its presence in the North American
market after joining forces with Pine Grove Asset
Management LLC, a US-based credit-focused
multi-manager firm. Pine Grove elevated FRM’s
suite of investment offerings, including SEC-
registered US 40 Act funds and complementary
multi-manager hedge fund products.

In the second quarter of 2015, FRM built on
its involvement in the US market by assuming
responsibility for several multi-strategy and
strategy-focused alternative funds previously run
by Merrill Lynch Alternative Investments. This
has considerably expanded both FRM’s range
of funds and its appeal to US investors. Working
with the wealth management network of Bank of
America Merrill Lynch, FRM is able to offer US 40
Act and other funds, and grow our business in
the world’s largest investment market.

M A N AG E D AC C O U N T S
FRM operates one of the leading buy-side
managed account platforms with FUM of $8.9
billion invested across portfolio and customised
managed accounts. For each customised
managed account client, FRM creates a unique,
customised managed account solution that
draws on our suite of risk, operational and
administrative services. In 2015, this specialist
hedge fund service attracted additional globally
recognised institutional investors. We expect
further client success in 2016 as institutional
investors combine expanding the scope of their
investment universe with a determination to
benefit from best-in-class levels of transparency,
risk management and operational control
through FRM’s managed account solutions.

FUM by strategy

$12.3bn

Diversified FoHFs
Thematic FoHFs
Segregated funds
Infrastructure managed accounts

I N N OVAT I V E S O LU T I O N S
In 2015, FRM worked with a range of new and
existing clients to design bespoke investment
portfolios and develop innovative approaches to
fee levels. An example of this is our developing
relationship with the UK’s Local Government
Pension Scheme. We have pioneered an
approach that provides each local plan with
a bespoke investment solution customised
for its pension needs, but which allows all the
schemes that join the platform to benefit from
improved fee levels created by the effects of
increased scale. We expect further progress
with this initiative and others in the coming year.

A LT E R N AT I V E B E TA
Recently, FRM has worked with clients to boost
portfolio risk efficiency and generate return
streams that do not depend on ever rising
asset prices. We term this approach ‘alternative
beta’, and in 2015 this evolved into a stand-
alone investment solution. This development
demonstrates both the expansion of FRM’s
capabilities as well as the synergy benefits that
institutional investors can leverage from Man’s
group-wide expertise. At the end of 2015 we
managed around $680 million in alternative beta
allocations and we are encouraged by the level
of client interest this product is attracting.
We believe that institutional investors’ appetite for
the risk/reward opportunities offered by hedge
funds continues to grow. FRM’s commitment to
performance and client service is expected to
help our business progress in 2016.

FRM Diversified II performance

FO C U S FO R 2 016
2016 is a special landmark – FRM is celebrating
its 25th anniversary of advising and serving
hedge fund investors. It also coincides with the
coming of age of our business in North America
where we have enjoyed renewed success in
partnering with institutional clients to provide
managed account solutions and advisory
services for their hedge fund allocations.

As a leading hedge fund investor, we have
developed a number of in-house solutions
to address the challenges faced in our own
portfolios. In recent years, the greatest demand
has been to foster sufficient levels of risk to
generate the return profiles that our clients need
to meet their obligations.

Drawing on the resources of one of the world’s
pre-eminent investment groups, FRM offers a
comprehensive suite of innovative hedge fund
solutions to help investors generate better
risk-adjusted returns. Our capabilities, including
a multi-format range of liquid alternative
investment options and proprietary risk
management software tools, are set to develop
further in 2016.

We work with clients globally to share ideas
and source the best hedge fund investment
solutions for the challenges they face. FRM’s
commitment to this will shape our focus in 2016
and beyond.

FRM Diversiﬁed II
Citigroup World Government Bond Index
MSCI World Net Total Return Index

600

500

400

300

200

100

$bn

5.0
1.5
3.0
2.8

Source: Man database
FRM Diversified II: To highlight the performance and risks associated with FRM Diversified II Fund SPC - Class A USD
(‘the fund’) prior to Jan 2004, FRM has created the FRM Diversified II pro forma using the following methodology: i) for
the period Jan 1998 to Dec 2003, by using the returns of Absolute Alpha Fund PCC Limited – Diversified Series Share
Cell (‘AA Diversified - USD’) adjusted for fees and/or currency, where applicable. For the period Jan 2004 to Feb 2004,
the returns of the fund’s master portfolio have been used, adjusted for fees and/or currency, where applicable. Post
Feb 2004, the fund’s actual performance has been used, which may differ from the calculated performance of the
track record. There have been occasions where the 12-months’ performance to date of FRM Diversified II has differed
materially from that of AA Diversified. Strategy and holdings data relates to the composition of the master portfolio.

Man Group plc Annual Report 2015 23

STRATEGIC REPORT
M A N N U M E R I C
F U N D A M E N T A L L Y - D R I V E N

Man Numeric’s quantitative approach to investing is
disciplined and analytical, yet reflective and collegial.
Numeric’s goal is to maximise the total dollars of
excess return in clients’ portfolios while taking a
prudent level of risk.

With 29 investment professionals based in Boston,
Numeric manages $19.0 billion across a range of long
only and long short, fundamentally based strategies.

Mike Even
President & Chief Executive Officer, Numeric

Shanta Puchtler
Chief Investment Officer – Director of Research, Numeric

24 Man Group plc Annual Report 2015

S T R AT E G I E S OV E RV I E W
Numeric’s fundamentally-driven systematic
investment process seeks to outperform
the market by buying inexpensive stocks
with improving fundamentals and catalysts
for growth. The firm generates alpha
by outperforming regional and global
benchmarks in the US, Europe, Japan and
Emerging Markets, and by delivering returns
from its long short market neutral strategies.
Numeric manages assets for institutional
clients globally, including corporate
and public pension plans, foundations,
endowments, and sovereign funds.
– Long only: Numeric has been managing
quantitative long only equity strategies
since our first US large cap strategy
was launched in 1989. The investment
philosophy and models we use are based
on our long-standing beliefs in valuation
and information flow signals. We now
manage strategies utilising this same
investment philosophy in US, non-US,
regional, and global equities across
various styles and market capitalisations.
Our disciplined portfolio construction
process is designed to identify alpha
and control sector and stock-specific
exposure.

– Alternative: Numeric has managed
market neutral strategies since 1990
with the launch of a US market neutral
strategy. We currently manage market
neutral strategies in US, non-US, regional,
and global equities. Our market neutral
strategies are benchmarked to the US
Treasury Bill Rate and are designed
to benefit from both long and short
positions. The portfolios are designed to
be dollar and sector neutral.

I N I T I AT I V E S
From the point of acquisition by Man Group in
September 2014 to the end of 2015, Numeric’s
assets grew by 25% to a total of $19 billion
driven by strong performance and sales into
both long only and alternatives strategies.

During 2015 sales totalled $4.4 billion and since
acquisition have been $6.5 billion. In the latter
half of 2015, Numeric started to benefit from
working with Man Group’s distribution network,
generating approximately $2 billion of sales.
Performance remains strong with over 90%
of Numeric’s current quantitative strategies
outperforming their selected benchmark over
one, three and five years.

During 2015, Numeric launched several new key
strategies, including UCITS funds, leveraging
Man Group’s resources and expertise and
offering investors in the European market
access to two of the firm’s core strategies for
the first time. The UCITS funds include the
Man Numeric Emerging Markets Equity, Man
Numeric Alternative Market Neutral Equity,
Man Numeric US Large Cap Equity, and Man
Numeric Global Equity funds. We also launched
the Man Numeric International Small Cap
Offshore and the Man Numeric International
Alpha funds.

The integration activities have allowed Numeric
to benefit from Man Group’s infrastructure,
technology, globalisation of compliance efforts
and some of its distribution capabilities to
further support our strategies.

Organisationally, the Numeric team has had
a productive year focusing on research,
exploring collaboration opportunities with Man
Group, and hiring and training new people.
Additionally, key research staff from Numeric
have had the opportunity to spend time working
in London with their new colleagues, providing
an opportunity for the sharing of ideas and
expertise.

LO O K I N G A H E A D
Numeric has expanded across a broad range of
geographies and hedge fund styles to meet the
expectations and aspirations of our investors
and our people.

Looking forward, our business plans will remain
focused on building strategic relationships
with key institutional clients including private
and public pension plans, endowments and
foundations, and funds of funds. Our core
principles have been in place since the firm’s
founding in 1989 and our business plan remains
the same; namely, we strive to add value
to our clients’ portfolios above their stated
benchmarks using our proprietary quantitative
investment process and commitment to
research initiatives.

In addition, Numeric’s research efforts will focus
on identifying new asset classes and regions
to exploit market inefficiencies. It will continue
to innovate and grow without sacrificing either
capacity or its focus on alpha generation.

FUM by strategy

Numeric net asset weighted alpha

2.8%

3.0%

$19.0bn

Alternatives
Global long only
Emerging markets long only
US large cap long only
US small cap long only

$bn

1.3
10.8
2.1
2.9
1.9

2014

2015

Source: Man database. Numeric’s net asset
weighted alpha for the years to 31 December 2015
and 31 December 2014 is calculated using the asset
weighted average of the performance relative to the
benchmark for all non-restricted strategy composites
(representing approximately two-thirds of Numeric’s
FUM) available net of the highest management fees and,
as applicable, performance fees that can be charged.

Man Group plc Annual Report 2015 25

STRATEGIC REPORT
C H I E F F I N A N C I A L O F F I C E R ’ S R E V I E W

Jonathan Sorrell
Chief Financial Officer

K E Y PE R FO R M A N C E I N D I CATO R S
Our financial KPIs illustrate and measure the
relationship between the investment experience
of our fund investors, our financial performance
and the creation of shareholder value over
time. Our KPIs are used on a regular basis
to evaluate progress against our four key
priorities: performance, distribution, growth
and efficiency.

The results of our KPIs this year continue to
reflect the volatile operating environment, with
strong net investment outperformance for
Numeric, solid performance from FRM and
GLG, and mixed performance for AHL with AHL
Diversified, the KPI strategy, underperforming
other AHL strategies. Net inflows achieved in
quant strategies were almost completely offset
by outflows in discretionary strategies. The shift
towards lower margin institutional assets has
continued to lower blended net management
fee margins, however the discipline we have
maintained regarding our cost base has
reduced the impact on our profitability and
EPS growth.

OV E RV I E W
Our financial results in 2015 reflect mixed
performance against a challenging market
backdrop, with a range of returns across AHL’s
strategies, a solid year for GLG and FRM’s
strategies, and strong net outperformance from
Numeric compared to benchmarks.

As Manny has noted, Man continues to
focus on cost efficiency as a source of value.
This year total costs before adjusting items
increased by $79 million, driven largely by
the impact of acquisitions, the compensation
structure of certain GLG strategies and adverse
year on year foreign exchange movements.

FUM increased by 8% from $72.9 billion at
the beginning of the year to $78.7 billion at
31 December 2015. We added $6.1 billion of
FUM through the acquisitions of Silvemine,
NewSmith and the BAML fund of funds
business, with the remainder of the movement
in FUM reflecting net inflows of $0.3 billion for
the year and positive investment performance
of $2.4 billion, partly offset by adverse foreign
currency and other movements ($3.0 billion).

Net management fee revenue increased by
6% from $715 million to $759 million in 2015,
primarily as a result of the increase in average
FUM of 29%, driven by the inclusion of Numeric
FUM for a full year in 2015 and FUM acquired
in the first half of 2015. Offsetting this, average
net management fee margins have continued to
decline over the year as a result of the ongoing
mix shift toward lower margin institutional
assets and long only funds, with institutional
assets now constituting 74% of total FUM and
long only constituting 42% of total FUM.

Performance fee revenues have decreased by
11% from $340 million to $302 million, largely
as a result of lower performance fees from AHL
after a strong year in 2014, partially offset by
an increase in performance fees from Numeric
following strong performance.

As a result of these revenue and cost drivers,
our adjusted profit before tax was $400 million,
down 17% from $481 million the prior year, and
adjusted diluted earnings per share were 21.1
cents (2014: 24.4 cents). Our statutory profit
before tax was $184 million (2014: $384 million),
reflecting adjusting items of $216 million, which
primarily relate to amortisation of purchased
intangible assets and increases in the fair value
of the contingent consideration payable in
relation to Numeric as a result of better than
expected flows and margins. The business
continues to generate strong operating cash
flows. Cash flows from operating activities,
excluding working capital movements, were
$402 million for the year.

Our balance sheet remains strong and liquid
with net tangible assets of $0.7 billion or 41
cents per share at 31 December 2015. Our
regulatory capital surplus is $453 million
at 31 December 2015, and we have a net
cash position of $437 million. We continue
to enhance the efficiency of our capital and
funding. We renegotiated our revolving credit
facility during the year, reducing it in size from
$1,525 million to $1,000 million, and with a
reduction in costs and an extension to June
2020. In the first half, we completed a $175
million share repurchase, acquiring 3% of our
issued share capital.

26 Man Group plc Annual Report 2015

K E Y P E R F O R M A N C E I N D I C AT O R S

Investment performance

Target: Key fund vs benchmark

Actual

Benchmark

AHL 2015
-2.7

7.9

3.4

0.9

33.8

32.0

12.7

13.9

2014

Numeric 2015

3.0%

0.0

20142

2.8%

0.0

GLG 2015
3.6

-3.6

2014

-5.9

-0.6

FRM 2015
1.0

0.5

2014

2.7

3.1

The investment performance KPI measures the net
investment performance for our four managers (AHL,
Numeric, GLG and FRM). For AHL, GLG and FRM,
investment performance is represented by key funds
against relevant benchmarks. The Numeric KPI has
been added with effect from 1 January 2015, and
monitors the net asset weighted outperformance or
underperformance (alpha)1 based on a predetermined
benchmark by strategy. The target for the investment
performance KPI is to exceed the relevant
benchmarks.

The key funds and the relevant benchmarks are
AHL Diversified vs. three key peer asset managers
for AHL (the target being to beat two of the three
peers), the GLG Alternative Strategies Dollar-Weighted
Composite vs. HFRX for GLG and FRM Diversified II
vs. HFRI Fund of Funds Conservative Index for FRM.
For Numeric, net asset weighted outperformance
is based on a benchmark against competitors by
Numeric strategy.

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 three out of the four performance
targets. FRM and GLG both met the benchmark in
2015 as their performance metrics exceeded their
relevant benchmark. Numeric had positive net alpha
in 2015 and therefore met the KPI. AHL did not meet
the target for 2015 as the performance of its key fund
was below all three of the relevant peer benchmarks.
Further investment performance information is
provided on pages 10 to 11.

2 Numeric net outperformance was not reported as a KPI in 2014 due to the acquisition of this business on

5 September 2014.

Adjusted management fee EBITDA margin %
Target: 25%-40%

Net flows %
Target: 0%-10% net inflows

Adjusted management fee EPS growth %
Target: 0%-20% +RPI

36.0

30.3

27.2

-6.3

6.1

0.4

-14

2013

2014

2015

2013

2014

2015

2013

2014

2015

This KPI measures adjusted management fee EBITDA
as a percentage of net revenues (gross management
fee revenue and income from associates less cash
distribution costs). Our adjusted management fee
EBITDA margin is a measure of our underlying
profitability. The adjusted management fee EBITDA
margin of 27.2% was within the target range for the
year ended 31 December 2015. This margin has been
declining as a result of the roll off of higher margin
guaranteed product FUM and the general product mix
shift from higher margin retail assets to lower margin
institutional and long only assets.

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
within the target range in 2015 with a net inflow of
0.4%, compared to a net inflow of 6.1% for the year to
31 December 2014. The reduced level of net inflows
in 2015 is largely as a result of higher redemptions,
including a large one-off redemption from the Japan
CoreAlpha fund during the period.

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 adjusting items, divided by the
weighted average 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 of 1.0% was not within the target range
for 2015 (target of 0%-20% plus RPI of 1.2%). The
adjusted management fee EPS growth of 1.0% in
2015 is a result of the accretive impact of the share
repurchase programme which has reduced the
number of shares, largely offset by a 2% decrease in
net management fee profits.

Man Group plc Annual Report 2015 27

STRATEGIC REPORT
C H I E F F I N A N C I A L O F F I C E R ’ S R E V I E W C O N T I N U E D

F U N D S U N D E R M A N A G E M E N T ( F U M )

$bn

FUM at 31 December 2014
Sales
Redemptions

Net inflows/(outflows)
Investment movement
Foreign currency movement
Other movements
Acquisitions of Silvermine, BAML

fund of fund assets and NewSmith

FUM at 31 December 2015

Alternative

Long only

Quant (AHL/
Numeric)

Discretionary
(GLG)

Fund of funds
(FRM)

Quant (AHL/
Numeric)

Discretionary
(GLG)

Total excluding
Guaranteed

Guaranteed

12.9
4.7
(2.0)

2.7
0.6
(0.4)
0.6

–

16.4

14.5
3.9
(4.7)

(0.8)
0.4
(0.9)
(1.0)

4.1

16.3

10.8
3.3
(2.7)

0.6
(0.2)
(0.2)
(0.2)

1.1

11.9

16.7
4.4
(2.6)

1.8
0.1
–
–

–

18.6

16.0
6.6
(10.2)

(3.6)
1.6
(0.7)
–

0.9

14.2

70.9
22.9
(22.2)

0.7
2.5
(2.2)
(0.6)

6.1

77.4

2.0
–
(0.4)

(0.4)
(0.1)
(0.2)
–

–

1.3

Total

72.9
22.9
(22.6)

0.3
2.4
(2.4)
(0.6)

6.1

78.7

Q UA N T A LT E R N AT I V E PR O D U C T S ( A H L / N U M E R I C )
Quant alternative FUM increased by 27% during the year, primarily as a
result of net inflows and positive investment performance. Sales were
$4.7 billion, which included three institutional mandates totalling $2.4
billion into the Dimension and Alpha strategies. Redemptions were
$2.0 billion, and were mainly from retail investors in AHL Diversified and
AHL Alpha. The positive investment movement was a result of strong
performance for AHL Dimension, AHL Evolution, and AHL Alpha.
Negative foreign exchange movements were due to 18% of Quant
alternatives FUM being denominated in Australian Dollars. The positive
other movements relate to re-gearing.

D I S C R E T I O N A RY A LT E R N AT I V E PR O D U C T S (G LG )
Discretionary alternative FUM increased by $1.8 billion during the year.
The acquisitions of Silvermine and NewSmith added $4.1 billion to FUM.
Net outflows of $800 million were mainly from European and North
American equity strategies. The positive investment performance was
driven by strong performance in the equity long short strategies. Negative
foreign exchange movements related primarily to the strengthening of
the US Dollar against the Euro and Sterling. At 31 December 2015, 56%
of Discretionary alternative FUM was denominated in US Dollars, 36% in
Euros and 3% was in Sterling. The negative other movements relate to
Silvermine and Pemba maturities.

F U N D O F F U N D S PR O D U C T S ( F R M )
Fund of funds FUM increased by $1.1 billion during the year, primarily
as a result of the Bank of America Merrill Lynch fund of funds portfolio
acquisition in the first half of the year. Sales of $3.3 billion included
$2.0 billion from a large North American based pension fund into an
infrastructure mandate. Redemptions of $2.7 billion included $700
million from a European pension fund’s infrastructure investment and
$600 million from FRM Diversified strategies. The negative investment
performance primarily related to some of the larger managed account
mandates. The negative foreign exchange movements were primarily
due to the strengthening of the US Dollar against the Japanese Yen and
Euro. At 31 December 2015, 56% of alternative fund of fund FUM was
denominated in US Dollars, 31% in Yen and 5% in Euro.

Q UA N T LO N G O N LY PR O D U C T S ( A H L / N U M E R I C )
Quant long only FUM increased by $1.9 billion during the year, primarily
as a result of net inflows. The net inflows for Numeric mainly related to
$900 million for Numeric Global Strategies, $800 million for Numeric US
Small Cap strategies, and $400 million for Numeric Emerging Markets.
Although investment performance in quant long only products was
broadly flat for the year, net asset weighted outperformance for Numeric
in 2015 was 3.0% alpha1. At 31 December 2015, 98% of quant long only
FUM was denominated in US Dollars.

1 Numeric’s net asset weighted alpha for the year to 31 December 2015 is calculated
using the asset weighted average of the performance relative to the benchmark for
all non-restricted strategy composites available (representing approximately two-
thirds of Numeric’s FUM) net of the highest management fees and, as applicable,
performance fees that can be charged.

28 Man Group plc Annual Report 2015

D I S C R E T I O N A RY LO N G O N LY (G LG )
Discretionary long only FUM decreased by 11%, driven by net outflows.
Sales were $6.6 billion and included $4.4 billion into Japan CoreAlpha,
$800 million into global fixed income strategies, $600 million into European
equity strategies and $400 million into UK equity strategies. Redemptions
were $10.2 billion, of which $7.2 billion related to Japan CoreAlpha,
including $2.8 billion of redemptions from a single client in the first half of
the year. The positive investment performance was primarily a result of
strong investment performance from Japan CoreAlpha. The NewSmith
acquisition added $900 million to discretionary long only FUM. Negative
foreign exchange movements related to the strengthening of the US
Dollar against Sterling and Japanese Yen. At 31 December 2015, 58% of
discretionary long only FUM was denominated in Sterling, 19% was in Yen
and 14% was in US Dollars.

G UA R A N T E E D PR O D U C T S
Guaranteed product FUM, our highest margin product grouping,
reduced by $700 million in 2015. There were no sales during the year and
redemptions totalled $400 million. The weighted average life to maturity of
the guaranteed product range is 3.6 years, with $500 million scheduled
to mature in 2016, the majority of which will mature during H1 2016, and
$100 million in 2017. Investment performance for guaranteed products
was negative during the year. Negative foreign exchange movements
were as a result of 67% of FUM being denominated in Australian Dollars.

S U M M A RY I N C O M E S TAT E M E N T
Investment performance and fund flows drive the economics of
our business. Management fees are typically charged for providing
investment management services at a percentage of each fund entity’s
gross investment exposure or NAV. Performance fees are typically
charged as a percentage of investment performance above a benchmark
return or previous higher valuation ‘high water mark’.

Man is fundamentally a people business and the majority of our costs
comprise payments to individuals whether they are our investment
managers who manage investor assets, third-party intermediaries or
internal sales staff who distribute our products, or the teams that manage
our operations and infrastructure.

Management and other fees
Share of after tax profit of associates
Distribution costs

Net management fee revenue
Performance fees (including investment

income/gains1)

Net revenue

Asset servicing
Compensation
Other costs

Total costs

Net finance expense

Adjusted profit before tax

Adjusting items

Statutory profit before tax

Adjusted net management fee profit before

tax

Adjusted net performance fee profit before

tax

Year ended
31 December
2015

Year ended
31 December
2014

833
3
(77)

759

326

1,085

(32)
(462)
(177)

(671)

(14)

400

(216)

184

194

206

810
9
(104)

715

367

1,082

(27)
(391)
(174)

(592)

(9)

481

(97)

384

198

283

Diluted EPS (statutory)

10.0 cents

20.5 cents

Adjusted net management fee EPS

10.2 cents

10.1 cents

Adjusted diluted EPS

21.1 cents

24.4 cents

Includes the adding back of $9 million (2014: nil) of third-party share of losses relating
to line-by-line consolidated fund entities.

G R O S S M A N AG E M E N T F E E S A N D M A R G I N S
Gross management fees increased by 3% during the year. While average
assets went up 29% year on year, the total gross management fee
margin decreased from 131 basis points for the year ended 31 December
2014 to 106 basis points for the year ended 31 December 2015. The
total net management fee margin (defined as gross management fees
less external distribution costs) has decreased from 114 basis points to
96 basis points in 2015. These reductions are due to a continued mix
shift towards institutional assets, particularly in the alternatives quant
category, and the full year impact of including Numeric’s assets (acquired
in September 2014) which have a blended margin of around 40 basis
points. The reduction in margin is less at the net level as there are higher
distribution costs associated with retail FUM than institutional FUM. This
product mix shift and consequent reduction in overall margin is likely to
continue as we sell more open ended alternative and long only product,
particularly to institutions, and there are no sales of guaranteed products.

During 2015, the alternatives quant net management fee margin
reduced by 50 basis points as a result of the continued mix shift towards
institutional assets, with around 80% of the net inflows from institutional
investors into AHL Dimension and AHL Alpha, where the gross margin
was around 1%. The inclusion of a full year of Numeric quant alternatives
assets, which have a margin of around 1%, has also been a contributing
factor. Going forward, it is expected that this margin will decline further
with the continued shift towards institutional assets.

Man Group plc Annual Report 2015 29

STRATEGIC REPORT

C H I E F F I N A N C I A L O F F I C E R ’ S R E V I E W C O N T I N U E D

N E T M A N AG E M E N T F E E R E V E N U E

Year ended
31 December 2015

Year ended
31 December 2014

Net
margin

1.5%
1.0%
0.8%
0.3%
0.8%
4.6%

235
170
83
60
121
78
9

Net
margin

1.9%
1.2%
0.9%
0.3%
0.7%
4.1%

188
207
96
20
109
73
13

756

1.0%

706

1.1%

759

715

Quant alternatives
Discretionary alternatives
Fund of fund alternatives
Quant long only
Discretionary long only
Guaranteed
Other income1

Net management fee revenues
before share of after tax profit
of associates

Share of after tax profit of

associates

Net management fee revenues

1 Other income primarily relates to distribution income from externally managed

products.

Net management fee margins in the discretionary alternative category
reduced by 26 basis points during the year, primarily as a result of the
Silvermine acquisition in the first half where margins are around 44
basis points.

The net margin for the fund of funds category was 6 basis points lower
compared to 2014. Looking forward we would expect the alternatives
fund of fund margin to trend down as we see a greater proportion of
sales into lower margin mandates, including infrastructure managed
account mandates where margins are between 15 to 25 basis points.

The long only quant net management fee margin has remained
consistent with the prior year at 34 basis points as the Numeric inflows in
2015 have been at a similar margin to the existing long only quant FUM.

The long only discretionary net management fee margin increased by
7 basis points as a result of $2.8 billion of redemptions from a single
client which were assets at a lower margin than the existing long only
discretionary FUM.

The guaranteed product net management fee margin increased by 59
basis points compared to the year ended 31 December 2014. In 2014,
the margin decreased as a result of one-off accelerated amortisation of
placement fees related to redemptions and the net de-gear in the first half
of the year.

PE R FO R M A N C E F E E S ( I N C LU D I N G I N V E S T M E N T I N C O M E /
G A I N S )
Gross performance fees for the year were $302 million compared to
$340 million in 2014, $218 million (2014: $272 million) from AHL (including
$22 million relating to guaranteed products, compared to $25 million in
2014), $37 million (2014: $37 million) from GLG, $40 million (2014: $23
million) from Numeric and $7 million (2014: $8 million) from FRM. At 31
December 2015, around 42% of AHL open ended products ($7 billion)
were above performance fee high water mark and of the $7.4 billion
performance fee eligible Numeric products, 92% were outperforming the
relevant benchmark at 31 December 2015. Around 34% of eligible GLG
assets ($3.7 billion) were above high water mark and around a further
38% ($4.1 billion) within 5% of earning performance fees, and FRM
performance fee eligible products were on average approximately
4.3% below high water mark.

30 Man Group plc Annual Report 2015

Man Group benefits from a portfolio of performance fee streams across a
variety of strategies that are charged on a regular basis at different points
in the year. 98% of AHL FUM is performance fee eligible, of which 64%
have performance fees that crystallise annually, 23% daily or weekly, and
13% monthly. The majority of GLG’s performance fees crystallise semi-
annually in June or December. Around 50% of Numeric performance
fee eligible FUM crystallises annually in November, with the remainder
crystallising at various points during the year.

Investment gains of $24 million (2014: $27 million), including the adding
back of $9 million of third-party share of losses (2014: nil), primarily relate
to gains on seeding investments. Third-party share of losses relates to
certain fund entities in which Man holds an investment which require line-
by-line consolidation of the fund into the Group’s results, as a result of a
control assessment as defined by the applicable accounting standards.
The funds requiring line-by-line consolidation in the year to 31 December
2015 made a loss, and therefore the $9 million credit represents the third-
party share of these losses.

D I S T R I B U T I O N C O S T S
Distribution costs comprised $74 million of investor servicing fees and
$3 million of placement fees.

Investor servicing fees are paid to intermediaries for ongoing investor
servicing. Servicing fees have decreased by $15 million to $74 million
in 2015 primarily due to the continued mix shift towards institutional
assets, particularly in the alternatives quant category, and the roll-off of
guaranteed product FUM.

Placement fees are paid for product launches or sales and are capitalised
and amortised over the expected investment holding period. The reduction
in placement fees is due to limited new payments in recent years and the
roll-off of amortisation of the previously capitalised balances.

A S S E T S E RV I C I N G
Asset servicing costs (including custodial, valuation, fund accounting and
registrar functions) were $32 million (2014: $27 million). Asset servicing
costs equate to around 5 to 6 basis points on FUM, excluding Numeric,
and vary depending on transaction volumes, the number of funds, and
fund NAVs. The $5 million increase in asset servicing compared to 2014
is largely due to the increase in average FUM over the year.

C O M PE N S AT I O N C O S T S
Compensation costs comprise fixed base salaries, benefits, variable
bonus compensation (cash and amortisation of deferred compensation
arrangements) and associated social security costs.

Total compensation costs, excluding adjusting items, increased from
$391 million in 2014 to $462 million in 2015, an increase from 36% to
43% of net revenue. This was driven by the increase in headcount due to
current and prior year acquisitions ($34 million), higher GLG performance
related compensation ($24 million), and a less favourable hedged US
Dollars to Pounds sterling rate in 2015 compared to the hedged rate in
2014 ($10 million). The compensation structure for the GLG equity long
short strategies teams is based on gross profits, which in 2015 were
in excess of performance fees generated by the strategies given they
started the year below high water mark. Additionally, compensation
costs include an increased year-on-year charge of $5 million as a result
of the 2014 change in application of the accounting policy for deferred
compensation, which impacts the charges relating to deferred share and
fund awards granted from 2015 onwards.

OT H E R C O S T S
Other costs, excluding adjusting items, were $177 million for the year
compared to $174 million for the year to 31 December 2014. These
comprise cash costs of $161 million (2014: $150 million) and depreciation
and amortisation of $16 million (2014: $24 million). The $11 million, or 7%,
increase in cash costs reflects the impact of the less favourable hedged
sterling rate in 2015 ($10 million) and to a lesser extent the costs of the
newly acquired businesses ($6 million), partially offset by continued
efforts to remain disciplined on costs which has resulted in a lower
underlying other costs base compared to 2014. The $8 million decrease
in depreciation and amortisation is due to lower capital expenditure in
recent years, which is expected to increase in the future due to higher
2015 investment in operating platforms and business infrastructure
($13 million) and planned capital expenditure of between $40 million
and $50 million over the next two to three years.

N E T F I N A N C E E X PE N S E
Net finance expense, excluding adjusting items, was $14 million for the
year (2014: $9 million). The increase is due to the full year interest charge
for the ten-year fixed rate reset callable guaranteed subordinated notes
(Tier 2 capital) issued in September 2014, as well as the write off the
remaining $2 million of capitalised costs relating to the previous revolving
credit facility, which was renegotiated in June 2015. Finance expense
includes a charge of $3 million relating to the undrawn revolving credit
facility, which is as a result of the annual charge reducing from $4 million
to $2 million on renegotiation of the facility in June 2015.

A D J U S T E D PR O F I T B E FO R E TA X E S
Adjusted profit before tax is $400 million compared to $481 million
for the previous year. The adjusting items in the year of $216 million
(pre-tax) are summarised in the table below and detailed in Note 2 to
the Group financial statements. The directors consider that the Group’s
profit is most meaningful when considered on a basis which excludes
acquisition and disposal related items (including non-cash items such as
amortisation of purchased intangible assets and deferred tax movements
relating to the recognition of tax losses in the US), impairment of assets,
restructuring costs, and certain non-recurring gains or losses, which
therefore reflects the recurring revenues and costs that drive the Group’s
cash flow.

Adjusting items $m

Acquisition related professional fees and other integration

costs

Impairment of FRM goodwill
Insurance recovery for legal claims
Revaluation of contingent consideration creditors
Unwind of contingent consideration discount
Amortisation of acquired intangible assets
Other adjusting items (net)

Total adjusting items (excluding tax)

Recognition of deferred tax asset (see opposite)

Year ended
31 December
2015

(4)
(41)
6
(62)
(17)
(92)
(6)

(216)

A D J U S T E D N E T M A N AG E M E N T F E E A N D N E T PE R FO R M A N C E
F E E PR O F I T B E FO R E TA X
Adjusted net management fee profit before tax was $194 million
compared to $198 million in 2014 as the increase in gross management
fees was more than offset by an increase in costs. Adjusted net
performance fee profit before tax of $206 million (2014: $283 million) for
the year reflects the lower performance fees of AHL, in conjunction with
the above outlined GLG bonus allocation which is not directly attributable
to performance fees generated in the year.

Gross management and other fees
Share of after tax profit of associates
Less:
Distribution costs
Asset services
Compensation
Other costs
Net finance expense

Adjusted net management fee profit

before tax

Performance fees
Gains on investments and other financial

instruments1

Less:
Compensation
Finance expense

Year ended
31 December
2015

Year ended
31 December
2014

833
3

(77)
(32)
(351)
(177)
(5)

194

302

(111)
(9)

810
9

(104)
(27)
(310)
(174)
(6)

198

340

(81)
(3)

Adjusted net performance fee profit

before tax

206

283

1 Includes the adding back of third-party share of losses relating to interests in

consolidated funds as shown on the Group income statement.

TA X AT I O N
The effective tax rate on adjusted profits was 10% for the year, which
is consistent with the effective tax rate for 2014. This is lower than the
underlying rate of around 13% due to the release of tax provisions that
are no longer needed.

The underlying rate of 13% in 2015 is lower than the underlying rate of
17% in 2014 due to a lower UK tax rate and a higher proportion of profits
being earned in the US where we are paying a minimal level of tax due
to relief from available past operating losses and tax amortisation of
acquired intangible assets. We have $225 million of accumulated US tax
losses which we can offset against the future profits from US entities
and will reduce taxable profits. In addition, we have $537 million of tax
deductible goodwill and intangibles, largely relating to the Numeric (2014)
and Ore Hill (2008) acquisitions, which is amortised for tax purposes in
the US over 15 years and which will also reduce the US taxable profit in
future periods. We therefore continue to expect not to pay federal tax in
the US for a significant number of years. Based on forecast US taxable
profits and consistent with the methodology applied in 2014, Man has
recognised a deferred tax asset of $19 million, which represents probable
tax savings over a three year forecast period due to utilisation of these
losses and tax amortisation of intangibles. This has resulted in an
$11 million credit to the tax expense in 2015, following an $8 million
credit in 2014, which are included as adjusting items.

Man Group plc Annual Report 2015 31

STRATEGIC REPORT
C H I E F F I N A N C I A L O F F I C E R ’ S R E V I E W C O N T I N U E D

Balance sheet $m

Cash and cash equivalents
Fee and other receivables

Total liquid assets
Payables

Net liquid assets
Investments in fund products and other

investments
Pension asset
Investments in associates
Leasehold improvements and equipment

Total tangible assets
Borrowings
Net deferred tax liability

Net tangible assets
Goodwill and other intangibles

Shareholders’ equity

31 December
2015

31 December
2014

607
303

910
(750)

160

581
48
30
44

863
(149)
(10)

704
1,511

2,215

738
396

1,134
(697)

437

460
45
30
52

1,024
(149)
(36)

839
1,595

2,434

L I Q U I D I T Y
Operating cash flows were $355 million during the year and cash and
cash equivalents balances were $586 million at year end, excluding cash
relating to consolidated fund entities.

Cash at 31 December 2014
Operating cash flows before working capital movements
Working capital movements (including seeding)
Payment of dividends
Acquisition of subsidiaries, net of cash acquired
Share repurchase (including costs)
Payment of acquisition related contingent consideration
Other movements

Cash and cash equivalents

Less cash held by consolidated fund entities

Cash at 31 December 2015

Year ended
31 December
2015

738
402
(47)
(193)
(38)
(176)
(46)
(33)

607

(21)

586

Working capital movements principally relate to an increase in seeding
investments of $173 million, including fair value adjustments, partially
offset by a decrease in loans to funds of $53 million and a decrease in fee
receivables of $71 million at the year end.

In June we renegotiated our revolving credit facility, reducing its size
from $1,525 million to $1,000 million, and extending the maturity to 2020
(with two one-year extension options). The facility remains available and
undrawn and the reduction in the size of the facility, coupled with an
improved credit rating from Fitch (from BBB to BBB+), has resulted in
annual commitment fee savings of around $3 million. The management
of liquidity and capital are explained in Note 15 and Note 23 to the Group
financial statements, respectively.

CA S H E A R N I N G S ( E B I T DA )
The Group continues to generate strong cash earnings. As the Group
has a number of non-cash items in the income statement it is important
to focus on cash earnings to measure the true earnings generation of our
business. The table below gives a reconciliation of adjusted profit before
tax to adjusted EBITDA. The main differences are net finance expense,
depreciation and amortisation, and deferred compensation charges
relating to share and fund product awards. Our adjusted EBITDA/net
revenue margin was 38.8% (2014: 44.8%), which can be divided between
margin on management fees of 27.2% (2014: 30.3%) and performance
fees of 66.0% (2014: 73.8%). The EBITDA management fee margin has
decreased compared to 2014 as a result of the continued product mix
shift from higher margin retail assets to lower margin institutional and long
only assets, and the EBITDA performance fee margin has decreased
largely as a result of performance fee variable compensation paid in
relation to certain GLG strategies, as outlined on page 30.

R E C O N C I L I AT I O N O F A D J U S T E D PB T TO A D J U S T E D E B I T DA

Adjusted PBT
Add back:
Net finance expense
Depreciation
Amortisation of capitalised computer

software and placement fees

Current year amortisation of deferred

compensation

Less: Deferred compensation awards

relating to the current year

Adjusted EBITDA

Year ended
31 December
2015

Year ended
31 December
2014

400

481

14
13

(64)

422

9
21

(79)

492

B A L A N C E S H E E T
The Group’s balance sheet is strong and liquid.

Cash and cash equivalents have decreased during the year largely
as a result of dividends on ordinary shares ($193 million), the share
repurchase and associated costs ($176 million) and a net increase in
seeding investments ($173 million) and the purchase of Silvermine,
NewSmith and the BAML fund of funds business, net of cash acquired
($38 million), partially offset by other cash inflows from operating activities
($528 million). Goodwill and other intangibles have decreased in 2015
due to amortisation of $98 million, partially offset by the acquisitions of
Silvermine, NewSmith and the BAML fund of funds business.

32 Man Group plc Annual Report 2015

G O I N G C O N C E R N
The directors have concluded that there is a reasonable expectation
that Man has adequate resources to continue in operational existence
for the foreseeable future, and have accordingly prepared the Group
financial statements on a going concern basis. Please refer to the
viability statement on page 34 and also to Note 1 to the Group financial
statements for further details.

R E G U L ATO RY CA PI TA L
Man is compliant with the FCA’s capital standards and has continued to
maintain significant surplus regulatory capital throughout the year. At 31
December 2015, surplus regulatory capital over the regulatory capital
requirements was $453 million.

The increase in the Group financial resources of $48 million during 2015
primarily relates to:

(1) H2 2014 post-tax net performance fee income and other reserve

movements of $169 million;

(2) H1 2015 post-tax net performance fee income and other reserve

movements of $113 million (H2 2015 performance fees will be added
once audited in February 2016); partly offset by

(3) The share repurchase programme of $176 million (including costs);

and

(4) The acquisitions of Silvermine, NewSmith and the BAML fund of funds
business, which have increased the intangibles deduction from Tier 1
capital by $58 million.

The increase in the Group financial resources requirement of $14 million
primarily relates to a net increase of $53 million driven by seeding
investments in fund products, partly offset by the impact of a lower
capital requirement on various receivables balances ($14 million), loans to
funds ($14 million) and cash ($11 million).

G R O U P ’ S R E G U L ATO RY CA PI TA L P O S I T I O N

Permitted share capital and reserves
Less deductions (primarily goodwill and

other intangibles)

Available Tier 1 Group capital
Lower Tier 2 capital – subordinated debt
Other Tier 2 capital

Group financial resources
Less financial resources requirement

Surplus capital

31 December
2015

31 December
2014

2,087

2,101

(1,485)

(1,564)

602
149
3

754
(301)

453

537
149
20

706
(287)

419

D I V I D E N D S A N D S H A R E R E PU R C H A S E S
Man’s dividend policy is that we will pay out at least 100% of adjusted
net management fee earnings per share (EPS) in each financial year by
way of ordinary dividend. In addition, Man expects to generate significant
surplus capital over time, primarily from net performance fee earnings.
Available surpluses, after taking into account our required capital
(including accruals for future earn-out payments), potential strategic
opportunities and a prudent buffer, will be distributed to shareholders
over time, by way of higher dividend payments and/or share repurchases.
Whilst the Board considers dividends as the primary method of returning
capital to shareholders, it will continue to execute share repurchases
when advantageous.

Adjusted net management fee EPS is considered the most appropriate
basis on which to routinely pay ordinary dividends as this represents the
most stable and regenerating earnings base of the business, and enables
the Board to utilise performance fee earnings each year in the most
advantageous manner to support the Group’s strategy.

The Board is proposing a final dividend for 2015 of 4.8 cents per share,
which together with the interim dividend of 5.4 cents per share, equates
to the adjusted net management fee EPS for 2015 of 10.2 cents per
share. The reconciliation of adjusted net management fee EPS to
statutory profits is provided in Note 11 to the Group financial statements
(page 107).

In addition to the proposed 2015 final dividend, in line with the above
stated policy, the Board has decided to retain all of the surplus capital
generated by the business to fund potential acquisitions. Conditions
may of course change and the directors will review the decision in line
with normal practice throughout 2016. Details of the share repurchase
programme conducted in 2015 are given in Note 23 to the Group financial
statements on page 121.

The proposed final dividend equates to around $81 million, which is
more than covered by the Group’s available liquidity and regulatory
capital resources. As at 31 December 2015, the Group’s cash, less those
balances ring-fenced for regulatory purposes, amounted to $0.5 billion
and the undrawn committed revolving credit facility was $1.0 billion,
as set out in Note 15 to the Group financial statements. The Group
regulatory capital surplus, before these distributions, was $453 million
at the year end, as shown on this page. Man Group plc’s distributable
reserves are $1.9 billion before payment of the proposed final dividend
or execution of the share repurchases.

Key dates relating to the proposed final dividend are: ex-dividend date 21
April 2016; record date 22 April 2016; AGM to approve the final dividend 6
May 2016; and payment date 13 May 2016. Further details on the Group’s
dividend can be found in the Shareholder Information section on page 139.

As at 31 December 2015 there has been no change to the Internal Capital
Guidance scalar that is applied as part of the calculation of the financial
resources requirement.

J O N AT H A N S O R R E L L
Chief Financial Officer

Man Group plc Annual Report 2015 33

STRATEGIC REPORT
R I S K M A N A G E M E N T
A N I N T E G R A T E D A P P R O A C H T O R I S K M A N A G E M E N T

from left to right
Geoff Galbraith, Global Head,
Operations & Technology
Jonathan Eliot, Chief Risk Officer
Jasveer Singh, General Counsel

Risk management is an essential component
of our approach, both to the management of
investment funds on behalf of investors, and
the management of Man Group’s business
on behalf of shareholders.

Ultimate responsibility for risk management rests
with Man Group’s Board, however, accountability
is embedded throughout all layers of the
business. Our risk management framework
requires that the business operates within
acceptable risk tolerances, as defined by the
Board’s risk appetite. Our governance structure
provides a foundation for ongoing oversight in a
dynamic environment. Independent fund boards
are responsible for protecting the interests of
fund investors.

D E V E LO PM E N T S I N 2 015
Investment underperformance continues
to be the biggest risk facing the Group.
A diverse product range gives Man
shareholders protection against concentrated
underperformance from any one sector.
The Group has continued to bolster its broad
range of investment styles and products
in key markets.

The expansion of our diversified product
offering is supported by our balance sheet,
which we have utilised to further increase the
capacity of the seeding programme. 2015
has seen the launch of several new GLG and
Numeric funds, as well as the growth of the
collateralised loan obligation (CLO) business
in Europe and North America. Whilst the
Group is exposed to a decline in value of these
investments, supporting the development
of new products increases and diversifies
revenues further.

Our operating model is reliant on technology
therefore the heightened threat from
cyber‑crime remains an area of increased
focus for the Group.

Man Group is currently regulated by 16
regulators in 13 jurisdictions; the Group
continues to focus on keeping our operational
and risk management frameworks effective for
our evolving global business. In the ‘Principal
risks and mitigants’ section on pages 36 to
37 we have noted a number of regulatory
developments. Regulation continues to evolve
at different paces across the world.

We continue to seek the most efficient ways
to fund our regulatory capital and liquidity
requirements. In May, we completed a share
repurchase, returning $175 million of capital to
shareholders.

Our counterparty risk exposures at both
corporate and fund level are closely monitored.
The risk to the Group’s balance sheet from
counterparty defaults remains low. We
are conscious, however, of the continued
risk of individual events, or downturns in
market sentiment and we continue to take a
conservative approach to counterparty selection.

A S S E S S M E N T O F PR I N C I PA L R I S KS
The directors confirm that they have carried
out a robust assessment of the principal risks
facing the Company, including those that
would threaten its business model, future
performance, solvency or liquidity.

The directors describe these principal risks
and explain how they are being managed or
mitigated on pages 36 to 37.

V I A B I L I T Y S TAT E M E N T
– The Directors confirm that they have a

reasonable expectation that the Group will
continue to operate and meet its liabilities,
as they fall due, for the next three years.
The Directors’ assessment has been
made with reference to the Group’s
current position and prospects, the
Group’s strategy, the Board’s risk appetite
and the Group’s principal risks and how
these are managed, as described in this
section of the Annual Report. A three year
period was selected as this is consistent
with the Group’s business planning
horizon.

– The strategy and associated principal
risks form the basis of the Group’s
medium‑term plan. This covers a three
year period, and includes downside
scenario testing. The Group’s medium‑
term plan is built by aggregating the
expected business performance across
the Group, and then stressing key
business assumptions (particularly those
regarding investment performance and
fund flows).

– The plan is also stress tested in a

number of downside scenarios as part
of the Group’s Internal Capital Adequacy
Assessment Process (ICAAP). The Board
also receives regular updates throughout
the year of the internally assessed level of
economic capital requirement, relative to
available capital supply.

– The medium‑term plan and ICAAP

assessments are augmented throughout
the year by regular briefings at the Audit
& Risk Committee by business unit heads
on strategy, risk and controls, as well as
dashboards across risk, compliance,
finance and internal audit. The principal
risks are considered within the Board’s
risk appetite framework.

34 Man Group plc Annual Report 2015

M A N ’ S R I S K A PPE T I T E S TAT E M E N T S
The risk appetite statements are set by the
Board and cover all significant risk categories.
They apply to both the investment management
functions and Man Group itself. The statements
express the Board’s appetite for risk, promote
a risk aware culture and set out objectives and
boundaries for Man Group’s business.

The primary goal of risk management is to
support the achievement of the Group’s
objectives by encouraging an appropriate
balance between risk‑seeking and risk‑averse
activities, in a controlled and regulatory
compliant context.

The governance framework and control
environment within the Group have been
designed to manage risks in accordance with
risk appetite. The Board and ARCom receive
regular reporting on the Group’s risk profile and
adherence with risk appetite. In the event that
breaches to risk appetite occur, these will be
resolved in line with the Group’s procedures
and processes. The statements are reviewed
periodically by the Board.

A summary of the new risk appetite statements
is available at www.man.com.

M A N G R O U P ’ S G OV E R N A N C E

The committees below have been given a
mandate by the Board and the CEO to oversee
the risk management framework. These
committees provide assurance to the Board
that risk has been managed according to the
risk appetite statements.

B OA R D

C E O

AU D I T A N D R I S K C O M M I T T E E

E X E C U T I V E C O M M I T T E E

The Executive Committee is accountable
for all risks assumed in the business and is
responsible for the execution of appropriate
risk management discipline.

The Audit and Risk Committee (ARCom) is a
committee of the Board which has oversight
of the Assurance functions (see page 57 for
further detail).

R I S K & F I N A N C E C O M M I T T E E

The Risk & Finance Committee (RAF) oversees the operational, regulatory and reputational risks
faced by the Group and the internal control environment. It also approves actual and contingent use
of the Group Balance Sheet and monitors the adequacy of economic capital and liquidity buffers.
The RAF is chaired by the Chief Risk Officer (CRO).

T H R E E L I N E S O F D E F E N C E

1S T

2 N D

3 R D

B U S I N E S S
M A N AG E M E N T

C O M PL I A N C E

‘ I N B U S I N E S S ’
R I S K
M A N AG E M E N T

R I S K

I N T E R N A L
AU D I T

E X T E R N A L
AU D I T

O PE R AT I O N A L
M A N AG E M E N T

The overall risk management framework at
Man Group is based on the three lines of
defence, and is overseen by the Audit and Risk
Committee as delegated by the Board.

The framework instils the principles of direct
responsibility for risk management in each
business unit. Embedding accountability
at the business level is the ‘first line of defence’.

The business units are monitored by a number
of risk control functions (i.e. Risk, Compliance),
which form the ‘second line of defence’.

The independent review and oversight
provided by Internal Audit is the ‘third line of
defence’, which independently evaluates the
adequacy and effectiveness of the Group’s
risk management, control and governance
processes.

Although Man Group and the investors in its
products are susceptible to losses, we believe
our risk management framework supports
long‑term value through the process of risk‑
aware decision making.

Man Group plc Annual Report 2015 35

STRATEGIC REPORT
P R I N C I P A L R I S K S
A N D M I T I G A N T S

Our comprehensive risk framework
includes strategic, financial and operational
risks to both Man Group and our funds.

R I S K S

M I T I G A N T S

1. Investment underperformance risk
Fund underperformance on an absolute basis, relative to a benchmark
or relative to peer groups would reduce FUM and may result in lower
subscriptions and higher redemptions. This risk is exacerbated at times
of volatile markets. This may also result in dissatisfied clients, negative
press and reputational damage.

Lower FUM results in lower management fee revenue and
underperformance results in lower performance fees, if any.

The breakdown of Man Group’s FUM and revenue margins by product
line are shown on pages 28 and 30 respectively.

Adverse market moves and high volatility may sharply increase the
demands on the liquid resources in Man Group’s funds. Market stress
and increased redemptions could result in the deterioration of fund
liquidity and in the severest cases this could lead to the gating of funds.

2. Regulatory risk
Man Group offers an increasingly wide range of investment products
covering multiple strategies from a global network of offices. It is licensed
in 13 jurisdictions, which results in Man Group being subject to a matrix
of regulations.

Man Group is regulated by 16 regulators. The Financial Conduct Authority
in the UK is the lead regulator.

Notable regulatory developments include the upcoming implementation
of UCITS V, MiFID II and the Market Abuse Regulation.

3. Balance sheet market risk
The main sources of market risk are:

Man Group uses capital to seed new funds as part of the ongoing
business to build our fund offering and expand product distribution. Man
Group is exposed to a decline in value of the seeding book.

Man Group underwrites the risks related to the UK defined benefit
pension plan which closed to new members in 1999 and future accrual
in 2011. The plan is fully funded, but is exposed to changes in net asset
versus liability values.

Volatile markets can place additional, often short term, demands on
the balance sheet. Man Group is exposed to having insufficient liquidity
resources to meet its obligations.

4. Operational risk
Operational risk is defined as the risk resulting from inadequate or failed
internal processes, people, systems, or from external events.

Man Group continues to outsource a number of functions that were
previously performed internally. The risk is that the outsourced service
providers do not perform as required, resulting in knock‑on implications
for our business as a whole.

Acquisitions into the Group introduce short‑term integration risks.

This is the key risk Man Group has to accept if it is to undertake its
business. Man Group’s investment businesses each have clearly defined
investment processes designed to target and deliver on the investment
mandate of each product.

Fund and manager performance is closely monitored, and we focus on
hiring and retaining highly skilled professionals who are incentivised to
perform within the parameters of their mandate.

Man Group’s diversified range of products and strategies across
the alternatives marketplace mitigates the risk to the business from
underperformance of any particular strategy.

Man Group conducts regular liquidity tests on its funds and endeavours
to manage resources in such a way as to meet all demands for fund
redemptions according to contractual terms.

Man Group supports proportionate and thoughtful global regulation and
initiatives that develop the regulatory environment.

Man Group continuously assesses whether the products it markets comply
with new regulations as they emerge and change. In this respect, the
Company conducts an independent review process for all products.

Man Group continues to liaise directly and indirectly with competent
authorities e.g. FCA, IOSCO, ESMA, HMT, NFA, DFSA and CSRC through
its Compliance department which consists of approximately 42 specialists
covering Corporate, Investment Management, Sales and Marketing and
Financial Crime. Compliance is located across six jurisdictions.

Requests for seeding capital are assessed on their strategic rationale for
the business. Approvals are granted by the Seed Investment Committee
(SIC), which is comprised of senior management, Risk and Treasury.
Investments are subject to risk limits, an exit strategy and are hedged to a
benchmark where appropriate. The positions are monitored regularly by
Group Risk and reviewed by the SIC.

Asset reallocations by the UK pension plan trustees in 2015 sought to
minimise the Equity and net UK interest rate risks. Longevity risk remains
but is uncorrelated to Man Group’s other risks.

Man Group has access to a revolving credit facility and maintains a
liquidity surplus.

Risk and Control Self‑Assessment (RCSA) is at the core of our assessment
of operational risks. Key risk indicators and operational risk events are
regularly reviewed so that our assessment of operational risks correctly
reflects the Group’s operational risk profile. These assessments are
subject to independent review by Risk and Internal Audit, who also provide
assurance over the adequacy of the Group’s control processes.

Man Group’s operations team have implemented a methodology
(including KPI monitoring) to confirm that outsourced service providers
are delivering as required. This process is monitored by the Risk &
Finance Committee and ARCom.

Man Group’s executive team is experienced in managing integrations.
Our risk and compliance teams independently review the assessment of
integration risks and the appropriateness of risk mitigation plans.

36 Man Group plc Annual Report 2015

R I S K S

M I T I G A N T S

5. Information security risk
Technology and information security are central to Man Group’s
business. Information security risk is defined as the risk of loss resulting
from cyber‑crime, malicious disruption to our networks or from the theft,
misplacing, interception, corruption or deletion of information.

Cyber‑crime attacks continue to grow in terms of scale and complexity.
We have deployed a number of preventative and detective controls to
defend our IT systems against cyber‑attack. These include penetration
tests, monitoring for targeted attacks, regular security awareness
training for employees, a specialist security company monitoring
our networks and regular access reviews. However, the fast pace of
innovation by cyber‑criminals makes it particularly challenging to assess
the effectiveness of our defences and deliver protection against this
increasing threat.

6. Discretionary trading risk
The risk that investment managers either intentionally or unintentionally
fail to execute and/or book trades correctly, or fail to adhere to investment
mandates or regulatory rules. This includes insider dealing and market
abuse, misrepresenting trading positions/trades and misallocation
between funds. Man Group may need to compensate for any losses
arising from such trades, as well as face the possibility of fines, lawsuits
and reputational damage.

Front office systems provide automated checks and controls at portfolio
and trade level. Each investment management business has dedicated
risk management personnel who monitor portfolio profiles and provide
independent challenge.

In addition all fund managers are required to undertake regular
mandatory training so that they are aware of due processes and their
responsibilities related to the placing of trades.

7. Credit/counterparty risk
The risk that a counterparty with which the funds or Man Group have
financial transactions becomes distressed.

Shareholders and investors in Man funds and products are exposed
to credit risk of prime brokers, clearing houses, depository banks and
guarantee providers.

Man Group also provides loans to guaranteed products, and so is
subject to counterparty risk to certain investor funds.

Man Group diversifies its deposits across a number of the strongest
financial counterparties, each of which is approved and regularly
reviewed for creditworthiness by the Counterparty Monitoring
Committee, a sub committee of the Risk and Finance Committee. The
Group Risk function monitors the credit spreads and ratings of the
approved counterparties on a daily basis.

Guaranteed products are closely monitored, and leverage is actively
adjusted such that the risk of default related to balance sheet loans to
funds is small.

8. Legal risk
The global nature of Man Group’s business, with corporate and fund
entities located in multiple jurisdictions and a diverse investor base makes
it subject to a wide range of laws. Failure to comply with these laws and
regulations may put Man Group at risk of fines, lawsuits or reputational
damage.

Man Group operates a global legal framework which underpins all
aspects of its business and is resourced by experienced legal teams.

These teams are physically located in Man Group’s key jurisdictions
helping them to understand the context and impact of any legal
requirements.

In response to the financial crisis, an unprecedented number of new
laws have arisen which are applicable to Man Group. While the legislative
response has been global, implementation is local which leads to
variations of approach between key jurisdictions. Failure to stay abreast
of, analyse and respond to these new and varied laws may expose Man
Group to the risks outlined above.

Emphasis is placed on proactively analysing new legal developments to
assess likely impacts and mitigate risks.

9. Reputational risk
The risk that an incident or negative publicity undermines our reputation
as a leading alternative investment manager. Reputational damage could
result in significant redemptions from our funds, and could lead to issues
with external financing, credit ratings and relations with our outsourcing
providers.

Our reputation is dependent on both our operational and fund
performance. Integrity is fundamental to ensuring Man Group is able
to attract investment in funds. Our governance and control structure
helps mitigate operational concerns, and our attention to people and
investment processes aim to establish that we comply with accepted
standards of investment management practice.

10. Key staff retention risk
The risk that a key person to the business leaves or is unable to perform
their role.

Man Group has been able to attract and retain an array of talented
individuals across the Group. Business and investment processes are
designed with a view to continue this trend and minimise the impact of
losing any key individuals. However, the nature of Man’s business means
that this is a risk that Man Group must accept.

Man Group plc Annual Report 2015 37

STRATEGIC REPORT
P E O P L E A N D C O R P O R A T E R E S P O N S I B I L I T Y

PEOPLE
In investment management our people are our assets and
losing them is one of our biggest risks. We focus on
delivering superior performance and excellent client
service by attracting, developing and retaining the best
individuals. By coaching and encouraging our people to
be the best within a highly meritocratic culture, we retain
them as they become leaders in their field.

E M PLOY E E S

1,230

People by function %

December
2015

December
2014

December
2013

June
2011

Investment management
Sales and Marketing
Product and Client Operations and Technology
Central management and support

Note:
Job function based on Business Unit, not individual role.

To achieve superior performance for our clients
and shareholders we need to have the right
people in the right roles, fully motivated and
competitively paid. We are very conscious of the
need to provide appropriate development for
our highly talented and increasingly international
workforce. Encouraging effective collaboration
and teamwork across the Company, within the
bounds of regulation and good governance, is a
key part of our strategy.

TA L E N T
It remains vitally important to maintain a strong
pipeline of talented individuals for the future
of the business. Our investment management
graduate programme and structured summer
internship programme launched in 2014
remain extremely popular and have enabled
us to attract high quality junior talent. We
currently have seven trainees on the graduate
programme and have five more graduate
trainees (two of whom were 2015 interns) joining
in 2016. Each graduate undertakes a two-year
programme, rotating through placements in
AHL, FRM, GLG and Sales which will equip
them with a broad knowledge of our products
and overall business. Following the success of
the 2014 and 2015 summer intern programmes,
we have hired another five interns who will
spend ten weeks with us in the summer of
2016, working on key projects with a view to
successful interns being offered a place on the
following year’s graduate programme.

We focus on retention through our annual
performance evaluation and continuous
succession planning processes. The annual
review is a valuable opportunity for managers to
give individuals feedback on their performance
and how their careers can progress with the
Company, particularly during difficult times.
Our ongoing succession planning process
is designed to mitigate continuity risks by

identifying key individuals for retention and
further development. During 2015 we had a
number of internal moves which have enabled
us to support individual career development
and cross-train high potential employees. We
were also pleased to see minimal voluntary
resignations of key individuals during 2015
against the backdrop of a general reduction in
voluntary turnover versus 2014.

During 2015, the acquisitions of NewSmith LLP
and Silvermine resulted in the arrival of a new
pool of talent at the firm, and we welcomed 38
new members of staff in total.

We also made a number of key hires throughout
the year including Moni Sternbach who joined
Man GLG to run a European Mid-Cap Fund,
Asim Nurmohamed who joined Man GLG
as a Senior Portfolio Manager in the equity
alternatives team and more recently Guillermo
Osses who was hired to run an Emerging
Markets debt fund for Man GLG. Outside of
investment management, Kate Squire joined
Man as Head of Compliance & Regulatory.

In 2013, we hired apprentices for the first
time in the UK through participation in the
Evening Standard’s Ladder for London
initiative – a scheme which helps tackle
youth unemployment in London. Our second
cohort of apprentices joined in April 2015 in
Operations, Technology, Finance, Legal and
Administration. To ensure the apprentices
received maximum benefit from their work
placements, they were supported by
supervisors, assigned buddies and human
resources. They were also given regular
exposure to management through discussion
sessions at which they provided progress
updates to members of the senior leadership
team. The programme gives the apprentices
wide-ranging and valuable experience which

38 Man Group plc Annual Report 2015

will help them build their careers. One 2013
apprentice was successful in receiving an offer
of a full-time permanent position following
completion of the apprenticeship. We are keen
to continue supporting this initiative so intend to
take on another cohort of apprentices in 2016.

H E A D C O U N T
Some organic growth along with the acquisitions
mentioned previously mean Group headcount
including contractors and consultants has
increased from 1,078 at 31 December 2014 to
1,230 at 31 December 2015. The ratio of support
function employees to front office remains
approximately one to one, which we believe to
be in line with industry best practice.

R E M U N E R AT I O N & B E N E F I T S
Our remuneration policies and practices are
designed to enable us to remain competitive
in the increasingly global markets in which
we operate. Remuneration packages include
combinations of the following elements – salary,
annual performance bonus and deferred
share/fund awards, along with other non-cash
benefits. The bonus deferral arrangement is a
key mechanism for focusing employees on Man
Group’s long-term performance.

Employee welfare is an important consideration
and we regularly benchmark our benefits
packages to ensure we are competitive and
in line with the market. During 2015 we again
conducted a full review of our benefits offerings,
resulting in new/improved benefits to be
introduced in 2016. One such example in the
UK is the introduction of a new benefit option
which offers increased flexibility to purchase
additional life cover (in excess of the core cover
amount) for staff members and their partners.
During 2015 we again offered our UK-based
employees the opportunity to participate in
the Man Group Sharesave Scheme at the
maximum limit and discount allowed by HMRC.

See pages 64 to 87 for the Directors’
remuneration report

E Q UA L I T Y A N D D I V E R S I T Y
Man Group’s culture is based on mutual
respect for others and discrimination by any
individual on the grounds of age, disability,
gender, race, religion, sexual orientation or
educational background is not tolerated. We
offer tangible support through our employee
assistance programmes, which are designed
to assist individuals with aspects of their lives
outside the workplace which may affect their
ability to perform.

Full and fair consideration is given by Man to
applications for employment made by disabled
persons, having regard to their aptitudes and
abilities. Man Group’s Global Inclusion Policy
outlines our commitment to ensuring a diverse
workforce and our opposition to discrimination
of any form, including on the basis of disability.
The Company ensures that disabled persons
are fairly treated in respect of training and
career development. For those who become
disabled during their employment, reasonable
adjustments are made and ongoing support is
provided as required to enable the individual to
continue working.

Achieving a better balance between male and
female employees across the business and
particularly at a senior level, is a challenge
many financial services organisations face and
it continues to be a key priority for Man Group.
We remain committed to promoting gender
diversity at all levels, and we currently have two
women in senior roles who sit on the Executive
Committee (as shown in the table overleaf). Our
recruitment policy has the objective of securing
50% female representation on long lists of
candidates (internal and external) for senior
roles and we engage executive search firms
who have signed up to the Voluntary Code of
Conduct on gender diversity and best practice.
Agency partners have been asked to read and
acknowledge our Global Inclusion Policy.

E M PLOY E E T U R N OV E R

Staff by gender %

Total
workforce

Male
Female

Senior
managers

Board of
directors

Man Group plc Annual Report 2015 39

STRATEGIC REPORT

P E O P L E A N D C O R P O R A T E R E S P O N S I B I L I T Y C O N T I N U E D

We also currently have several initiatives in place
to support and encourage our female talent.
Man Group continues to develop DRIVE as an
internal support network, with a programme of
regular events to inform and support women
within the firm, as well as providing networking
opportunities both internally and externally.
Alongside this initiative, Man Group has also
developed and piloted a mentoring programme
for high potential employees, one key aim
of this is to help and retain female talent. An
additional initiative agreed in 2015 was a pilot
returner programme – this scheme targets
individuals who have taken a career break
and now wish to return to the workforce. We
focused our search on candidates with front
office experience and were pleased to shortlist
several high calibre female applicants for
interviews, with a view to any new hires joining
by Q2 2016. The programme offers a level of
flexibility in terms of working hours, and we are
starting to see an increase in flexible working
more generally around the business – a positive
step to support the large proportion of our
workforce who have children or other caring
responsibilities.

Man Group is committed to increasing female
participation in its graduate programme, and in
2015 we predominantly focused our campus
marketing activity in direct support of this
objective, by focusing on relevant university
courses, societies and clubs that helped
inform our targeted recruitment. Furthermore,
we have started to sponsor the European
Girls’ Mathematical Olympiad as part of our
effort to support and encourage female talent
in the potential pipeline for financial services
careers. There is evidence that these initiatives
are beginning to have an impact as we saw
twice as many females attending our graduate
assessment centres in 2015 as had attended
in previous years, with two female candidates
being selected for our 2016 graduate intake.

During 2015, Man initiated partnerships with
SEO London and Investment 2020 to help us
source talent from more diverse backgrounds,
and we have been pleased to see increased
diversity in our graduate and intern applications
as a result of these collaborative efforts.

Man Group strongly believes in the benefits
of a diverse and multi-cultural workforce and
is confident that the current multifaceted
approach will enable the firm to progress its
diversity agenda.

M A N G R O U P E X E C U T I V E C O M M I T T E E

Manny Roman

Chief Executive Officer, Man Group

Eric Burl

Co-Head, Global Sales & Marketing and Head of Man Americas

Jonathan Eliot

Chief Risk Officer

Luke Ellis

Mike Even

President, Man Group

President & Chief Executive Officer, Numeric

Geoff Galbraith

Global Head, Operations & Technology

Robyn Grew

Global Head, Legal & Compliance

Keith Haydon

Chief Investment Officer, FRM

René Herren

Deputy Head, Global Sales & Marketing

Teun Johnston

Co-Chief Executive Officer, GLG

Mark Jones

Co-Chief Executive Officer, GLG

Pierre Lagrange

Chairman, Man Asia & Senior Managing Director, GLG

Michelle McCloskey

President, FRM

Shanta Puchtler

Chief Investment Officer – Director of Research, Numeric

Tim Rainsford

Co-Head, Global Sales & Marketing

Sandy Rattray

Chief Executive Officer, AHL

Jasveer Singh

General Counsel

Jonathan Sorrell

Chief Financial Officer

Tim Wong

Chairman, AHL

E M PLOY E E S H A R E
OW N E R S H I P

5.7%

40 Man Group plc Annual Report 2015

D E V E LO PM E N T, E N G AG E M E N T A N D
S U PP O R T
In order to maximise the potential of our
employees, we work with all areas of the
business to support training and development
needs. This covers a wide range of initiatives
including technical courses, team development
and individual executive coaching. In 2015, we
introduced a new soft skills training programme,
offering bite size modules with each focusing
on a different core topic. We also introduced a
senior mentoring programme which pairs Board
members with individuals on the Executive
Committee to offer further development to our
senior executives. 360˚ review processes are
increasingly being used to gather feedback,
enabling individuals to receive comments from
a number of sources which supports their
development. In addition, we run a number of
in-house educational events such as Business
Education sessions and informal breakfast
discussions hosted by members of the
Executive Committee.

Employees receive regular updates and
presentations on Company results and
major decisions which affect them through
face to face meetings or, if necessary, via
video link. The Man intranet is used to
provide supplementary updates from senior
management on all aspects of our business
and is a crucial part of the dissemination of
knowledge and information.

Maintaining high levels of engagement from our
workforce is vital in order to sustain our position
as an industry market leader. During 2015 we
conducted a global employee survey to gather
feedback on areas such as culture, leadership,
career opportunities and communication. We
achieved an excellent response rate (77%)
and saw good evidence of job satisfaction
and trust in the senior leadership team, along
with positive endorsement of our business
principles. We also now offer long service
awards to recognize those individuals who have
completed 10 years’ and 20 years’ service with
the Company.

Our Global Mobility Programme enables us
to meet specific business needs within given
markets or business areas. Assigning people
overseas assists us in attracting, retaining and
developing our people in order to meet our
business goals and strengthen our geographic
footprint. This creates a diverse talent pool with
varied perspectives and enhanced sharing of
our knowledge base.

B U S I N E S S PR I N C I PL E S
At Man Group, we are committed to conducting
our business in accordance with the principles
outlined below, which we believe will enable
us to be the best we can be and which we
continue to embed within all areas of the
business. We strive to deliver outstanding
results for our clients, whose interests always
come first and are the focus of our firm. We aim
for excellence and expect the highest standard
of quality of work from everyone across the firm.

We always do the right thing, conducting
our business with the highest standards of
behaviour, honesty and integrity. We continue
to invest in talent, technology and research
to ensure we provide a differentiated offering,
underpinned by leading experience, expertise
and innovation. We provide an inclusive work
environment, where reward and progression are
based solely on merit.

Man Group’s business principles are designed to
distil and define the firm’s key priorities, focus and
culture. The principles are displayed in Man Group’s
offices internationally to promote a common
understanding of the firm’s values:

Performance

Excellence

First, foremost and always, we focus
on delivering superior risk adjusted
performance.

Good is not enough, we strive
to be excellent in all we do.

Clients

Differentiation

Our clients are at the heart of
everything we do.

We seek to be differentiated
and original in our thinking.

Responsibility

Meritocracy

We always do the right thing and
conduct our business with the
highest standards of integrity.

We succeed through talent,
commitment, diligence and
teamwork.

Man Group plc Annual Report 2015 41

STRATEGIC REPORT
P E O P L E A N D C O R P O R A T E R E S P O N S I B I L I T Y C O N T I N U E D

CORPOR ATE RESPONS IBILIT Y
Our corporate responsibility strategy is to pursue
and evidence where possible the high standards
of behaviour, both corporate and individual, which
underpin our reputation and maintain the trust and
loyalty of our key stakeholders. We focus on five
key areas of corporate responsibility:

WO R L D C L A S S G OV E R N A N C E A N D R I S K
M A N AG E M E N T
Man Group strives to deliver the highest
standards of governance and risk management.
We have long recognised the importance of
corporate governance practices that help
to ensure effective oversight and strong
accountability. With our scale, we are well-
positioned to implement and manage these
practices effectively across our platform, as we
strive to deliver industry leading governance
and risk management.

R E S P O N S I B I L I T I E S TO O U R M A R K E T
PL AC E
Man Group is committed to the highest
standards of ethical conduct and actively
supports collaboration of the alternative
asset management industry in developing
and committing to standards of responsible
investment.

The Hedge Fund Standards were drawn
up in 2007 to address key issues relating to
the hedge fund industry and best practice,
covering the areas of disclosure, valuation,
risk management, fund governance and
shareholder conduct. Man Group is a founding
signatory of the Hedge Fund Standards Board
(HFSB) which was fully established in 2008 as
a guardian to the Standards with the goal of
creating a framework for promoting integrity,
transparency and good governance in the
industry.

M A N AG I N G O U R PE O PL E
Man Group aims to create an environment
which enables our staff to reach their full
potential. We encourage our teams to work
together to help each other develop and
succeed professionally and personally by
providing a workplace which is healthy, safe,
and offers guarantees of fairness and equal
opportunities. As a responsible business,
we constantly review our procedures which
support the development and retention of
talent including performance management
programmes, flexible working policies,
health and well-being initiatives, and our
comprehensive benefits scheme.

42 Man Group plc Annual Report 2015

C O N T R I B U T I N G TO O U R C O M M U N I T I E S
Man Group is actively involved in charitable
initiatives and volunteering opportunities
local to the firm’s offices through its ManKind
Programme. ManKind gives employees the
opportunity to take two additional days paid
leave per annum to volunteer with charities
supported by the Man Charitable Trust or with a
charity of their choice. Furthermore, we have a
worldwide commitment to promoting literacy in
children, underscored through our sponsorship
of the Man Booker Prize. We are very conscious
of the impact of our organisation on our
community and have taken steps to ensure we
are contributing positively to those around us.

PR OT E C T I N G T H E E N V I R O N M E N T
Whilst our environmental impact is relatively
limited, we strive to deliver clear and transparent
reporting that makes sense of the measurable
elements within our control and respond to
external risk and expectations. We look to
take all practicable and economic measures
to conserve and reduce energy consumption
at our offices around the world. We monitor
our impacts using Credit 360, a system that
measures relevant data and generates reports
which provide practical guidance in identifying
our impacts and managing their reduction.

M A N G R O U P ’ S L I T E R A R Y
S P O N S O R S H I P S

Man Group sponsors two
major literary prizes – the
annual Man Booker Prize
for Fiction and the recently
evolved Man Booker
International Prize.

A Brief History of Seven Killings, by Marlon
James, Man Booker Prize winner 2015.

The 2015 Man Booker International Prize
was awarded to Hungarian author László
Krasznahorkai. On announcing the winner,
Chair of judges Marina Warner commented:

“László Krasznahorkai is a visionary writer
of extraordinary intensity and vocal range
who captures the texture of present day
existence in scenes that are terrifying,
strange, appallingly comic, and often
shatteringly beautiful.”

The 2015 prize highlighted the growing
importance of quality fiction in translation,
with eight out of ten of the finalists having
been originally published in a language other
than English.

Sponsorship of the prizes underscores Man
Group’s charitable focus on literacy and
education as well as the firm’s commitment
to excellence and entrepreneurship. Together
with the wider charitable activities of the
Booker Prize Foundation, the prizes play a very
important role in promoting literary excellence
on a global scale that the firm is honoured
to support.

2015 shortlist.

Man Group plc Annual Report 2015 43

Man Group has sponsored the Man Booker
Prize for Fiction since 2002. Launched in
1969, the prize receives worldwide recognition
and aims to promote excellence in fiction by
awarding the best full-length novel published
in the English language that year. 2014 saw the
expansion of the prize to include entries from
writers of all nationalities, writing originally in
English and published in the UK.

Winning the Man Booker Prize is considered the
ultimate accolade by many writers. As former
prize-winner Graham Swift commented:

“Prizes don’t make writers and writers
don’t write to win prizes, but in the near-
glut of literary awards now on offer… it’s
the one which, if we’re completely honest,
we most covet.”

Jamaican-born writer Marlon James won
the 2015 Man Booker Prize for Fiction with
his novel A Brief History of Seven Killings, a
686-page epic with over 75 characters and
voices. Through a myriad of voices, the book
retells the near mythic assassination attempt of
Bob Marley, to create a rich, polyphonic study
of violence, politics and the musical legacy of
Kingston of the 1970s.

“It moves at a terrific pace and will
come to be seen as a classic of our
times”, said Michael Wood, Chair of
judges. James was presented with the
Prize by HRH The Duchess of Cornwall
and Man Group’s Chief Executive Officer,
Emmanuel Roman, on 13 October 2015,
at London’s Guildhall.

Man Group is also the sponsor of the Man
Booker International Prize, which, from 2016,
will be awarded annually on the basis of a single
book, translated into English and published
in the UK, rather than as previously every two
years for a body of work. Both novels and
collections of short stories will now be eligible
for the prize.

STRATEGIC REPORT

C H A R I T A B L E T R U S T

Whilst the broader economic environment in the United
Kingdom has arguably improved compared to recent
years, our experience is that the voluntary sector remains
in a state of transition. Small charities continue to be
challenged by the public sector spending cuts despite
their credible efforts to secure funding from the private
sector which itself is emerging from the recession amidst
a volatile economic and political landscape.

Registered charity no: 275386

In 2015, the Trust continued to focus its grant-
making activity on charities that were able to
demonstrate an improvement in literacy and
numeracy skills whilst more broadly raising
educational attainment. Literacy and numeracy
skills are acknowledged as being essential to
the happiness, health and economic wellbeing
of individuals and society. It is well documented
that low levels of these skills lead to a large
number of poor outcomes and are linked
to unemployment or dependence on state
benefits, low wages and poor health.

The Trust continued to utilise its reserves in 2015,
spending $615,000 on charitable donations
and employee engagement programmes in
the period. Wherever practicable, the Trust
seeks to leverage the grants made to charities
by encouraging them to raise capital through
other funding sources at the same time. In the
UK our supported projects benefited thousands
of vulnerable children, young people and
adults living in disadvantaged neighbourhoods,
providing them with the essential skills they
need to succeed in life and make a positive
contribution to society.

Our supported charities also gained from the
time and effort given by Man Group employees
through our ManKind community volunteering
programme. ManKind gives employees the
opportunity to take two additional days paid
leave per annum to volunteer with charities
supported by the Man Charitable Trust or with
a charity of their choice. The positive social
benefits that stem from employees’ skills,
experience and knowledge can make a real
difference to local communities. Volunteering
also provides a highly cost-effective and
valuable method of achieving positive learning
and development benefits for our employees
and we are delighted that once again a good
proportion of Man employees volunteered their
time, experience and skills during the past year.

44 Man Group plc Annual Report 2015

Man volunteers provided support to those
in need in the local community, undertaking
a range of activities including running
financial literacy programmes and weekly
reading sessions for primary school children,
transforming outdoor spaces and sorting and
packaging food at a local foodbank. Man Group
has also hosted a number of career insight
days at the London offices, providing staff
the opportunity to share their knowledge and
experience, and giving young people an insight
into the professional world in order to enhance
their employability skills and careers education,
whilst inspiring them to access careers they
might not know about.

Man Group employees often take part in charitable

fundraising on behalf of the Man Charitable Trust
annual charity.

Employees additionally took part in a number
of volunteering and fundraising activities for our
annual charity, the Children’s Cancer Recovery
Project, supporting their work with children and
families coping with a child’s cancer diagnosis.
Employees ran, jumped out of aeroplanes,
baked cakes and raised funds through a
“Christmas jumper” day.

We would like to express our thanks to all the
Man employees who supported our charitable
programmes during the year and to those who
donated via their Give as You Earn accounts.
In 2016, the Trust intends to continue to provide
support to charities that are able to evidence
their ability to improve literacy and numeracy
outcomes.

F E AT U R E D G R A N T S
The Man Charitable Trust
awards grants to charities
that work towards raising
the levels of literacy and
numeracy in the UK.
Examples of Grants
awarded in 2015 include:

C I T Y G AT E WAY

City Gateway exists to bring hope to local
communities living in intergenerational poverty
and social exclusion. They work to build trust
with some of the most vulnerable individuals
and tackle complex needs with a well-rounded
and personalised approach that sees award
winning results. City Gateway builds bridges
to the hardest-to-reach individuals to advise,
mentor and train people for healthier lives, a
solid education for career progression and life-
changing work opportunities.

The Trust’s donation has gone towards funding
the Formal Education Programme for 2015-17,
which specifically targets teaching 19-24 year
olds in English and Mathematics.

W E S T S I D E S C H O O L

Westside School provides an alternative
education approach supporting pupils aged
13-16 years who have been excluded from
mainstream schooling. Westside became a free
school in 2014, the first alternative provision in
London, and offers seven GCSE’s with English,
Mathematics, Science and Computer Science
as core subjects along with Citizenship, Child
Development and Art, as well as a range
of vocational courses including Cooking,
Mechanics, and Hair & Beauty. The school
deals with a wide range of students’ needs,
from autism, dyslexia, to anger management
issues and English as an Additional Language.

The Trust’s donation has supported the Student
Development Programme, which aims to
upgrade current methods and procedures,
equipping the students so that they can
confidently sit their GCSEs and gain the life
skills that enable them to participate fully and
productively in the wider community.

L I F T FO R L E A R N I N G

LIFT for Learning is a charitable development
hub creating and delivering projects to inspire
learning. It is dedicated to inspiring the belief
that every child, young person and adult
deserves a fair and equal chance to flourish in
education, by harnessing the digital medium as
a powerful tool for building traditional literacy
skills and the new forms of digital literacy. The
charity aims to make targeted interventions
that reach and engage those most at risk of
long-term social exclusion and to exemplify
successful ways of advancing the acquisition
of literacy.

The Trust’s donation has supported the
development of an online safety project
“Protecting The Most Vulnerable Children
Online”. This strategy aims to fill a major gap in
the current provision, as children struggling with
literacy have very little grasp of what personal
information actually means which results in
vulnerability online.

S PR I N G B OA R D FO R C H I L D R E N
Springboard works to improve the life
opportunities of disadvantaged children
who are at risk of being left behind in the
education system due to literacy challenges.
The charity aims to service children in socially
and economically disadvantaged areas, to
help them acquire basic literacy skills and
help raise their expectations of themselves
and their future.

The Trust’s donation has gone towards
supporting the Springboard Expert programme,
for children facing the greatest learning
challenges, who need highly trained specialists
to teach them strategies for reading and writing
that are tailored to their needs.

Man Group plc Annual Report 2015 45

STRATEGIC REPORT
B O A R D O F D I R E C T O R S

Jon Aisbitt
Chairman of the Board and Chairman of
the Nomination Committee

Richard Berliand
Independent non-executive director

Date of appointment
Jon was appointed to the Board as a
non-executive director in August 2003
and was appointed non-executive
Chairman in September 2007.

Date of appointment
Richard was appointed to the Board
as a non-executive director in January
2016.

Background and career
Prior to joining the Board, Jon was
a Partner and Managing Director in
the Investment Banking Division of
Goldman Sachs based in New York,
London and Sydney.

Background and career
Richard held a number of senior roles at
J.P. Morgan over a 23 year career at the
bank, including Global Head of Prime
Services, Global Head of Cash Equities
and Chairman of J.P. Morgan’s Market
Structure practice.

Areas of expertise
Jon has over 20 years’ experience
in international corporate finance. He
has significant technical knowledge
of capital markets and the complex
regulatory backdrop in which they
operate. Since being appointed as
Chairman of Man Group, Jon has
navigated the Company and the
Board through significant change and
has encouraged the development
of the Group’s strategy through the
introduction of new and diversified
investment styles.

Areas of expertise
Richard has a wealth of experience
in the financial services sector
gained through a number of senior
executive roles. He also brings
extensive experience from a diverse
range of international non-executive
positions, providing him with a valuable
understanding of the current regulatory
environment.

Phillip Colebatch
Senior Independent Director
and Chairman of the Remuneration
Committee

Date of appointment
Phillip was appointed to the Board as
a non-executive director in September
2007. He was appointed as Chairman
of the Remuneration Committee in
2008 and Senior Independent Director
in August 2013.

Background and career
Before joining the Board, Phillip was
a member of the Executive Board of
Credit Suisse Group, first as Chief
Financial Officer and then as CEO of
Credit Suisse Asset Management.
Phillip was subsequently a member
of the Executive Board of Swiss
Reinsurance Company.

Areas of expertise
Phillip has extensive strategic, financial,
operational and markets experience
gained through his various senior
positions in global financial institutions.

Current external roles
Jon is Deputy Chairman of New
Forests Company Holdings Limited
(African sustainable forestry and
timber processing) and a non-
executive director of Pro Bono Bio plc
(biotechnology).

Current external roles
Richard is Deputy Chairman of
Deutsche Börse AG in Frankfurt and
a non-executive director of Rothesay
Life Limited. He is also Chairman of
ITRS Global Holdings Limited, a non-
executive director of Mako Europe Ltd
and a member of the CFTC Global
Markets Advisory Committee in
Washington D.C.

Current external roles
Phillip is a non-executive director of
Lend Lease Corporation and is on
the Boards of Trustees of the LGT
Group Foundation and the Prince of
Lichtenstein Foundation.

Committee membership
Jon is Chairman of the Nomination
Committee and a member of the
Remuneration Committee. He attends
Audit and Risk Committee meetings by
invitation.

Committee membership
Richard is a member of the
Remuneration Committee and the
Nomination Committee. Following
the Board search for an appropriate
director to succeed Phillip Colebatch
as Chairman of the Remuneration
Committee, it is intended that Richard
will assume this role following the
Company’s 2016 AGM.

Committee membership
Phillip is Chairman of the Remuneration
Committee and a member of the Audit
& Risk Committee and the Nomination
Committee. Following the Board search
for an appropriate director to succeed
Phillip as Chairman of the Remuneration
Committee, it is intended that Richard
Berliand will assume this role following
the Company’s 2016 AGM.

46 Man Group plc Annual Report 2015

John Cryan
Independent non-executive director

Andrew Horton

Matthew Lester

Lord Livingston of Parkhead

Emmanuel Roman

Independent non-executive director

Independent non-executive director and

Chief Executive Officer

and Chairman of the Audit and Risk

Chairman designate

Committee

Date of appointment
John was appointed to the Board as a
non-executive director in January 2015.

Date of appointment

Andrew was appointed to the Board

Matthew was appointed to the Board

Ian was appointed to the Board as a

Emmanuel (Manny) was appointed

as a non-executive director in August

as a non-executive director in May 2011.

non-executive director and Chairman

to the Board in May 2011. He was

2013.

designate in January 2016.

appointed President of Man Group

in August 2012 and Chief Executive

Officer in February 2013.

Background and career
John is Co-CEO of Deutsche Bank AG.
He previously held a number of senior
roles at UBS AG over a career spanning
more than 25 years with the banking
group, during which time he served
as Group Chief Financial Officer and
Chairman and CEO of UBS AG EMEA.
Following his time at UBS, John was
president of Temasek International’s
European Operations.

Areas of expertise
John has extensive knowledge of
international financial markets gained
from experience at leading global
financial institutions and brings
significant knowledge of the regulatory
environment in which Man Group
operates.

Background and career

Andrew has served on the Board of

Matthew is Chief Finance Officer of

Ian served as Minister of State for Trade

Manny joined Man as Chief Operating

Beazley plc since 2003, first as Group

Royal Mail plc. He was Group Finance

and Investment from 2013 to 2015. Prior

Officer in October 2010 following the

Finance Director and since 2008, as

Director of ICAP from 2006 to 2010

to this, he was Group Chief Executive

acquisition of GLG. He joined GLG in

Chief Executive Officer. Prior to his time

and prior to that held a range of senior

Officer of BT Group Plc, having

2005 as Co-Chief Executive Officer

at Beazley, Andrew held a number of

finance roles at Diageo, including

previously served as Chief Executive

after 18 years with Goldman Sachs

financial positions within ING, NatWest

Group Financial Controller and Group

Officer of BT Retail and as Group Chief

where he was Co-Head of Worldwide

and Lloyds bank.

Treasurer.

Financial Officer. Before joining BT, he

Global Securities and Co-Head of the

was Chief Financial Officer of Dixons

European Securities Division.

Group plc.

Areas of expertise

Andrew has over 25 years of broad

Matthew has substantial financial

With almost two decades of board

Manny has a strong and varied

financial services experience with

management and regulatory

level FTSE 100 experience, Ian

investment management background

significant exposure to operating at

expertise. He also has significant

brings extensive knowledge and

and extensive trading, operational and

Board level. Given Andrew’s banking,

listed company experience acquired

understanding of successfully growing

business management experience.

financial markets and insurance

background, he is well placed to

through his role at ICAP and through

a complex international business and

Since his appointment as CEO,

the flotation of Royal Mail plc on the

navigating regulatory environments

Manny has led the Company in

contribute to Man Group’s strategic

London Stock Exchange. Matthew’s

around the world. He has a strong

diversifying its product range and

development, risk management

and financial reporting. Andrew’s

international experience has also

experience, coupled with his role

track record of innovative leadership

increasing its international presence

as Chairman of Man Group’s Audit

that will be invaluable to the Board and

through disciplined acquisitions. He

and Risk Committee, allows him to

executive team.

allowed him to provide valuable input

provide substantial insight into the

to Man Group’s increased international

Group’s financial reporting and risk

presence.

management processes.

also has overseen the restructure of

the Company’s cost base. Details of

Manny’s achievements during 2015 can

be found on page 71.

Current external roles
John is Co-CEO of Deutsche Bank AG.

Current external roles

Andrew is Chief Executive Officer of

Matthew is Chief Finance Officer of

Ian is a serving member of the House of

Manny is a trustee of the Hedge Fund

Beazley plc.

Royal Mail plc. He is also on the main

Lords. He is Deputy Chairman of Dixons

Standards Board Limited and a non-

Committee of the Hundred Group of

Carphone plc and a non-executive

executive director of Penguin Random

Finance Directors where he chairs

director of Celtic plc and Belmond Ltd.

House Limited.

the Investor Relations and Markets

Committee.

Committee membership
John is a member of the Nomination
Committee.

Committee membership

Andrew is a member of the Audit and

Matthew is Chairman of the Audit and

Ian is a member of the Audit and Risk

Manny regularly attends Audit and Risk

Risk Committee and the Nomination

Risk Committee and a member of the

Committee, Remuneration Committee

Committee.

Nomination Committee.

and Nomination Committee.

and Nomination Committee meetings

by invitation. He is Chairman of the

Executive Committee.

the Nomination Committee

and Chairman of the Remuneration

Committee

Date of appointment

Jon was appointed to the Board as a

Richard was appointed to the Board

Phillip was appointed to the Board as

John was appointed to the Board as a

non-executive director in August 2003

as a non-executive director in January

a non-executive director in September

non-executive director in January 2015.

and was appointed non-executive

2016.

Chairman in September 2007.

2007. He was appointed as Chairman

of the Remuneration Committee in

2008 and Senior Independent Director

in August 2013.

Background and career

Prior to joining the Board, Jon was

Richard held a number of senior roles at

Before joining the Board, Phillip was

John is Co-CEO of Deutsche Bank AG.

a Partner and Managing Director in

J.P. Morgan over a 23 year career at the

a member of the Executive Board of

He previously held a number of senior

the Investment Banking Division of

bank, including Global Head of Prime

Credit Suisse Group, first as Chief

roles at UBS AG over a career spanning

Goldman Sachs based in New York,

Services, Global Head of Cash Equities

Financial Officer and then as CEO of

more than 25 years with the banking

London and Sydney.

and Chairman of J.P. Morgan’s Market

Credit Suisse Asset Management.

group, during which time he served

Structure practice.

Phillip was subsequently a member

as Group Chief Financial Officer and

of the Executive Board of Swiss

Chairman and CEO of UBS AG EMEA.

Reinsurance Company.

Following his time at UBS, John was

president of Temasek International’s

European Operations.

Areas of expertise

Jon has over 20 years’ experience

Richard has a wealth of experience

Phillip has extensive strategic, financial,

John has extensive knowledge of

in international corporate finance. He

in the financial services sector

operational and markets experience

international financial markets gained

has significant technical knowledge

gained through a number of senior

gained through his various senior

from experience at leading global

of capital markets and the complex

executive roles. He also brings

positions in global financial institutions.

financial institutions and brings

significant knowledge of the regulatory

environment in which Man Group

operates.

regulatory backdrop in which they

extensive experience from a diverse

operate. Since being appointed as

range of international non-executive

Chairman of Man Group, Jon has

positions, providing him with a valuable

navigated the Company and the

understanding of the current regulatory

Board through significant change and

environment.

has encouraged the development

of the Group’s strategy through the

introduction of new and diversified

investment styles.

Current external roles

Jon is Deputy Chairman of New

Richard is Deputy Chairman of

Phillip is a non-executive director of

John is Co-CEO of Deutsche Bank AG.

Forests Company Holdings Limited

Deutsche Börse AG in Frankfurt and

Lend Lease Corporation and is on

(African sustainable forestry and

a non-executive director of Rothesay

the Boards of Trustees of the LGT

timber processing) and a non-

Life Limited. He is also Chairman of

Group Foundation and the Prince of

executive director of Pro Bono Bio plc

ITRS Global Holdings Limited, a non-

Lichtenstein Foundation.

(biotechnology).

executive director of Mako Europe Ltd

and a member of the CFTC Global

Markets Advisory Committee in

Washington D.C.

Committee membership

Jon is Chairman of the Nomination

Committee membership

Richard is a member of the

Committee membership

Phillip is Chairman of the Remuneration

John is a member of the Nomination

Committee and a member of the

Remuneration Committee and the

Committee and a member of the Audit

Committee.

Remuneration Committee. He attends

Nomination Committee. Following

& Risk Committee and the Nomination

Audit and Risk Committee meetings by

the Board search for an appropriate

Committee. Following the Board search

invitation.

director to succeed Phillip Colebatch

for an appropriate director to succeed

as Chairman of the Remuneration

Phillip as Chairman of the Remuneration

Committee, it is intended that Richard

will assume this role following the

Berliand will assume this role following

Company’s 2016 AGM.

the Company’s 2016 AGM.

Jon Aisbitt

Richard Berliand

Phillip Colebatch

John Cryan

Chairman of the Board and Chairman of

Independent non-executive director

Senior Independent Director

Independent non-executive director

Andrew Horton
Independent non-executive director

Matthew Lester
Independent non-executive director
and Chairman of the Audit and Risk
Committee

Lord Livingston of Parkhead
Independent non-executive director and
Chairman designate

Emmanuel Roman
Chief Executive Officer

Date of appointment
Andrew was appointed to the Board
as a non-executive director in August
2013.

Date of appointment
Matthew was appointed to the Board
as a non-executive director in May 2011.

Date of appointment
Ian was appointed to the Board as a
non-executive director and Chairman
designate in January 2016.

Date of appointment
Emmanuel (Manny) was appointed
to the Board in May 2011. He was
appointed President of Man Group
in August 2012 and Chief Executive
Officer in February 2013.

Background and career
Andrew has served on the Board of
Beazley plc since 2003, first as Group
Finance Director and since 2008, as
Chief Executive Officer. Prior to his time
at Beazley, Andrew held a number of
financial positions within ING, NatWest
and Lloyds bank.

Background and career
Matthew is Chief Finance Officer of
Royal Mail plc. He was Group Finance
Director of ICAP from 2006 to 2010
and prior to that held a range of senior
finance roles at Diageo, including
Group Financial Controller and Group
Treasurer.

Background and career
Ian served as Minister of State for Trade
and Investment from 2013 to 2015. Prior
to this, he was Group Chief Executive
Officer of BT Group Plc, having
previously served as Chief Executive
Officer of BT Retail and as Group Chief
Financial Officer. Before joining BT, he
was Chief Financial Officer of Dixons
Group plc.

Background and career
Manny joined Man as Chief Operating
Officer in October 2010 following the
acquisition of GLG. He joined GLG in
2005 as Co-Chief Executive Officer
after 18 years with Goldman Sachs
where he was Co-Head of Worldwide
Global Securities and Co-Head of the
European Securities Division.

Areas of expertise
Andrew has over 25 years of broad
financial services experience with
significant exposure to operating at
Board level. Given Andrew’s banking,
financial markets and insurance
background, he is well placed to
contribute to Man Group’s strategic
development, risk management
and financial reporting. Andrew’s
international experience has also
allowed him to provide valuable input
to Man Group’s increased international
presence.

Areas of expertise
Matthew has substantial financial
management and regulatory
expertise. He also has significant
listed company experience acquired
through his role at ICAP and through
the flotation of Royal Mail plc on the
London Stock Exchange. Matthew’s
experience, coupled with his role
as Chairman of Man Group’s Audit
and Risk Committee, allows him to
provide substantial insight into the
Group’s financial reporting and risk
management processes.

Areas of expertise
With almost two decades of board
level FTSE 100 experience, Ian
brings extensive knowledge and
understanding of successfully growing
a complex international business and
navigating regulatory environments
around the world. He has a strong
track record of innovative leadership
that will be invaluable to the Board and
executive team.

Areas of expertise
Manny has a strong and varied
investment management background
and extensive trading, operational and
business management experience.
Since his appointment as CEO,
Manny has led the Company in
diversifying its product range and
increasing its international presence
through disciplined acquisitions. He
also has overseen the restructure of
the Company’s cost base. Details of
Manny’s achievements during 2015 can
be found on page 71.

Current external roles
Andrew is Chief Executive Officer of
Beazley plc.

Current external roles
Matthew is Chief Finance Officer of
Royal Mail plc. He is also on the main
Committee of the Hundred Group of
Finance Directors where he chairs
the Investor Relations and Markets
Committee.

Current external roles
Ian is a serving member of the House of
Lords. He is Deputy Chairman of Dixons
Carphone plc and a non-executive
director of Celtic plc and Belmond Ltd.

Current external roles
Manny is a trustee of the Hedge Fund
Standards Board Limited and a non-
executive director of Penguin Random
House Limited.

Committee membership
Andrew is a member of the Audit and
Risk Committee and the Nomination
Committee.

Committee membership
Matthew is Chairman of the Audit and
Risk Committee and a member of the
Nomination Committee.

Committee membership
Ian is a member of the Audit and Risk
Committee, Remuneration Committee
and Nomination Committee.

Committee membership
Manny regularly attends Audit and Risk
Committee, Remuneration Committee
and Nomination Committee meetings
by invitation. He is Chairman of the
Executive Committee.

Man Group plc Annual Report 2015 47

GOVERNANCE
B O A R D O F D I R E C T O R S C O N T I N U E D

Dev Sanyal
Independent non-executive director

Nina Shapiro
Independent non-executive director

Jonathan Sorrell
Chief Financial Officer

Date of appointment
Nina was appointed to the Board as a
non-executive director in October 2011.

Date of appointment
Jonathan was appointed to the Board
as Chief Financial Officer in June 2012.

Date of appointment
Dev was appointed to the Board as a
non-executive director in December
2013.

Background and career
Dev has held a number of senior
financial and line management positions
with BP in a global career spanning
25 years. Positions include Group
Treasurer, Chairman of BP Investment
Management, Business Chief
Executive, Executive Vice President,
Strategy and Integration and member of
BP’s Group Executive Committee.

Areas of expertise
Dev has extensive knowledge of capital
markets, asset and risk management,
trading and foreign exchange gained
from his role as BP Group Treasurer
and Chairman of BP Investment
Management Ltd. He also has broad
international experience and wide
ranging operational expertise in senior
executive roles and is, therefore, able
to contribute to the development and
execution of Man Group’s business
strategy and global relationships.

Background and career
Nina held several senior management
and operating roles at the World Bank
and has led numerous investments
in emerging markets. From 2000
to 2011, Nina was a member of the
Management Group and was Vice
President, Finance, and Treasurer of
the International Finance Corporation
(the World Bank’s private sector
arm). In that role she managed liquid
asset investment and capital market
fundraising.

Areas of expertise
With extensive experience in
international financial markets and
in-depth knowledge of investment in
emerging markets, Nina has particular
insight into financial policy and market
development. This perspective helps to
support Man Group in its international
expansion.

Current external roles
Dev currently serves at BP as Chief
Executive, Alternative Energy,
Executive Vice President, Regions
with responsibility for Europe and Asia
regions and a member of the Group
Executive Committee. He is also a
member of the Accenture Global
Energy Board, a member of the Board
of Advisors of The Fletcher School of
Law and Diplomacy and Vice Chairman
of the Centre for China in the World
Economy at Tsinghua University.

Current external roles
Nina is a director of Zyfin (an originator
of ETFs for emerging markets) and
Mountain Partners (an accelerator
for early technology ventures). She
also is on the Advisory Boards of
Zurich Insurance Group’s Investment
Management Advisory Council, the
New Silk Route PE Fund and the
Carbon Trust.

Committee membership
Dev is a member of the Audit and
Risk Committee and the Nomination
Committee.

Committee membership
Nina is a member of the Remuneration
Committee and the Nomination
Committee.

48 Man Group plc Annual Report 2015

Background and career
Jonathan joined Man in August 2011
as Head of Strategy and Corporate
Finance. Prior to this, he spent 13 years
at Goldman Sachs, where he worked in
the Investment Management, Securities
and Investment Banking Divisions,
latterly leading investments in a broad
range of hedge fund firms.

Areas of expertise
Jonathan’s experience of financial
markets, particularly his extensive
knowledge of the hedge fund industry
and strong background in strategy
and execution, has supported the
development of Man’s strategy,
including M&A activity that has
strengthened Man’s footprint in the
US. He has also brought clear focus on
financial efficiency through the delivery
of challenging cost saving initiatives
and the restructuring of Man Group’s
balance sheet. Details of Jonathan’s
achievements during 2015 can be
found on page 72.

Current external roles
Jonathan is a director of Nephila
Holdings Limited.

Committee membership
Jonathan regularly attends Audit and
Risk Committee meetings by invitation
and attends Remuneration Committee
meetings for certain items of business.
He is also a member of the Executive
Committee.

C O R P O R A T E
G O V E R N A N C E R E P O R T

Jon Aisbitt
Chairman

Dear Shareholder

I am pleased to report to you on the Board’s activities and development
in my last year as Chairman of Man.

As indicated in my Chairman’s statement, after a year of major
acquisition in 2014 the Board’s focus turned to reviewing against plan
the performance of the businesses acquired, monitoring the progress
of their integration into Man’s operational infrastructure and testing the
risk management which had been put in place. The Board also reviewed
Man’s investment in people, exploring the success of the new investment
managers hired into GLG, the development and mobility of the internal
talent pool and the dissemination throughout the Group of the set of core
business principles introduced by the executive team in 2014.

2015 was also a year of building future talent for the Board. While Phillip
Colebatch was leading the search for my successor as Chairman, I
concentrated on the search for his successor as Remuneration Committee
Chairman. Both appointments were successfully completed around the
turn of the year and will provide excellent leadership for the future.

I am pleased to have had the opportunity to lead Man’s Board for the last
nine years through a period of profound change for the business and the
industry as a whole. I would like to thank my fellow Board members and
the executive management for their unfailing support and effort through
what have often been uncertain and testing times. I am confident in the
strength of the team that I hand over to Ian and wish my colleagues all the
best for the opportunities and challenges that lie ahead.

Jon Aisbitt
Chairman

Man Group plc Annual Report 2015 49

GOVERNANCE

C O R P O R A T E G O V E R N A N C E R E P O R T
C O N T I N U E D

B OA R D LE A D E R S H I P

E X PE R I E N C E

I N T E R N AT I O N A L

Board composition
One of my most important jobs during my time as Chairman has been
to build a Board which has the right balance of skills, experience and
outlook to meet the changing needs of the business and to provide
maximum support and challenge to the executive team. The nature and
structure of Man’s business has evolved significantly over the last nine
years and the changes in the profile of the Board reflect the scale of that
change. While all its members continue to have in-depth financial and
fund management experience of various kinds, the Board has been fully
refreshed in recent years with the appointment of four independent non-
executive directors who are serving executives in other companies. These
individuals bring current operational experience and insights which are
highly valued by Man’s executive team. The analyses of our membership
opposite show the strength of the Board’s membership in terms of the
range of relevant experience our directors offer and the period over which
they have been building their knowledge of the business.

One of the areas where we still have progress to make is the promotion
of further diversity. As part of this, we are exploring different ways to
attract appropriate female candidates to the Board and hope that a
new approach, as detailed in the Nomination Committee report, will
prove successful during 2016. I feel, nonetheless, that I am leaving Ian
with a very experienced, high quality and committed executive and
non-executive team. Full details of individual Board members’ career
experience and role on the Board are given on pages 46–48.

Board roles and relationships
The way in which Board members work together is as important as
the individual skills they bring. I have, as Chairman, enjoyed a strong
relationship with our CEO. Full details of our respective roles on the
Board are given on our website. Manny’s response to my non-executive
colleagues is constructive and candid and the executive team is always
open to the Board’s requests for more detail and insights into the
business, whether that be on the tracking of acquisitions, the success of
new hires or on industry and external market trends. The executives very
much welcome the sharing of advice and experience by Board members
who, as full time executives elsewhere, are working on similar challenges
in their own organisations. These include issues such as cyber protection,
the roll-out and testing of business principles, and management
development and succession. There is a strong and growing appetite
on the part of every Board member to maximise the non-executives’
contribution to all areas of the Board’s operation and to leverage the skills
and experience they offer.

Our non-executives also meet as a separate group on occasion without
the executive team. They take advantage of informal dinners to hear at
first hand about the business from Executive Committee members and
other senior management below Board level. This also gives the Board
the opportunity to test management development and succession
planning needs and to get a better sense of the talent available to provide
the executive leadership of the future.

Our Senior Independent Director (SID), Phillip Colebatch, has played a
vital role this year in his leadership of the search for my successor, details
of which are given in the Nomination Committee report. As Chairman of
the Remuneration Committee, he led the shareholder consultation on
the changes to our remuneration policy and our ongoing programme
of shareholder engagement on remuneration during the year. Details
of these activities are given in the Directors’ Remuneration report. A full
outline of Phillip’s role as SID is given on our website.

50 Man Group plc Annual Report 2015

100%

F I N A N C E

100%

O PE R AT I O N A L

64%

R I S K M A N AG E M E N T

55%

Tenure years

TE N U R E

0-3 years
3-6 years
6+ years

AT TE N DA N C E R ECO R D

Jon Aisbitt, Chairman

Phillip Colebatch1

John Cryan

Andrew Horton1

Matthew Lester

Emmanuel Roman

Dev Sanyal

Nina Shapiro

Jonathan Sorrell

46
36
18

Attendance
record

10/10

9/10

10/10

9/10

10/10

Note:
1 Owing to conflicting business commitments, Phillip Colebatch and Andrew

Horton were each unable to attend one meeting. However, they received and
reviewed the papers to be considered in advance and directed questions to the
Chairman which were addressed in the meeting.

Non-executive independence and consideration of conflicts
I believe that, as shown in the feedback from our external Board
evaluation, our non-executive directors bring a robust scrutiny and level
of challenge to management proposals. Their independence is regularly
assessed as part of the annual Board evaluation and we consider each
one to be totally independent in spirit and in role. In-depth due diligence
at the time of each director’s appointment ensures that any potential

conflicts of interest are fully explored. Board members are required to notify
me on a continuing basis of any changes in their external appointments
or interests which may create a potential conflict with their service on
the Board in order that the implications may properly be addressed. The
appointment of John Cryan as co-CEO of Deutsche Bank last July was
carefully considered by the Board and the executive team. As a result, we
concluded that the potential conflict of interest arising from his executive
position at Deutsche Bank meant that he should step down from his
position as Chairman and member of the Remuneration Committee but
that he should remain on the Board as a non-executive director.

Board direction and oversight
The Board’s principal responsibility is to promote the long-term success
of the Company in line with its culture and values. In doing this, it must
ensure that it delivers the right balance between short-term and long-
term objectives and creates sustainable shareholder value. To provide
oversight of financial reporting and risk management and to protect
shareholder interests in respect of executive remuneration and the future
leadership of the business, it delegates certain functions to three main
Board Committees whose functions are summarised below.

BOA R D

AU D IT A N D R I S K CO M M IT TE E

R E M U N E R ATI O N
CO M M IT TE E

N O M I N ATI O N
CO M M IT TE E

– Reviews the integrity of the Company’s
financial reports and statements prior to
approval by the Board.

– Reviews and reports to the Board on the
effectiveness of Man’s risk management
and internal controls framework.
– Recommends to the Board the

appointment of the external auditor
and reviews the effectiveness and
independence of the external auditor.
– Approves the Internal Audit plan and

reviews the effectiveness of the Internal
Audit function and management’s
response to their findings.

– Recommends to the Board for approval

the principles and structure of the
Company’s executive remuneration policy.

– Recommends to the Board for approval
the quantum of the Company’s variable
compensation pool.

– Recommends to the Board for approval
the annual objectives and compensation
for individual executive directors.

– Approves the compensation for Executive
Committee members and FCA Code staff.

– Determines the contractual termination
terms for executive directors and any
severance payments.

– Keeps the Board’s skill and experience
base under regular review in light of
business changes and agrees with
the Board the role specification for any
proposed new appointments.

– Conducts the search and selection

process for new directors and
recommends proposed appointees to the
Board.

– Reviews senior executive development

and succession plans to ensure continuity
of resource at, and just below, Board level.
– Reviews and recommends the renewal of
non-executive director appointments.

See pages 57 to 60 for the Audit
and Risk Committee Report

See pages 64 to 87 for the Directors’
Remuneration Report

See pages 61 to 63 for the Nomination
Committee Report

Full Committee terms of reference, which are approved by the Board, can be found on our website. Details of the work of the Committees during the
year are given in the separate Committee reports highlighted above.

Matters reserved for Board decision
In discharging its responsibility for the direction and governance of
the business, the Board has adopted a schedule of matters which are
reserved for its decision alone. These are key matters determining the
purpose, value and structure of the business including:
– Strategy
– Oversight of business performance
– Major acquisitions and disposals and new business developments
– Capital structure and corporate status
– Risk appetite, risk management and internal controls
– Annual Budget and Medium Term Plan
– Borrowings and Treasury policies
– Financial reporting and communications with shareholders
– Dividends
– Board appointments

A full list of the matters reserved for Board decision is available on our
website.

All other matters fall within the responsibility and decision of the CEO who
has established a separate Group authorities framework through which
he delegates certain decisions to individuals and specific management

groups. The CEO is assisted in managing the business by the Executive
Committee which operates under his direction and authority. The
Executive Committee helps implement the Board approved strategy and
manages financial and operational performance. It is also accountable
for all risks assumed in the business and for the execution of appropriate
risk management discipline. Executive Committee membership is given
on page 40.

Board meetings and agendas
The Board held ten formal meetings during 2015, including a one-and-
a-half day strategy review. The tables on page 52 give a sense of the
Board’s core agenda at every meeting, the recurring annual cycle of
business and specific items of focus in 2015. Man’s President, Luke Ellis,
regularly attends meetings to give the Board an update on the progress
and performance of Man’s investment managers and to provide insights
into industry performance and market trends. Executives from Investment
Management, Sales, Operations and Group Risk are invited to report
direct to the Board on progress and business developments within
their areas. The Global Head of Legal and Compliance keeps the Board
updated on any regulatory issues arising in the business, new areas of
FCA focus and the potential impact of external regulatory developments.

Man Group plc Annual Report 2015 51

GOVERNANCE
C O R P O R A T E G O V E R N A N C E R E P O R T
C O N T I N U E D

A R E A S O F BOA R D FO C U S I N 2 015

Regular core agenda

– CEO review of markets and economic backdrop, investment

– Reports by Committee Chairmen on matters discussed at previous

performance, fund flows and people moves

– Updates on acquisition opportunities
– Review of financial performance against plan

Committee meetings

– Business updates including Group Risk Dashboard, Investor Relations

Update and Operations and Technology Report

Full year programme

February
– Reviewed and approved 2014 Group bonus pool and executive

September
– Reviewed external risks which posed a potential threat to Man’s

directors’ remuneration on the recommendation of the Remuneration
Committee

– Approved Final FY15 Budget and FY15–17 Medium Term Plan
– Approved 2014 final dividend and $175 million share buyback
– Undertook annual review of the effectiveness of the Group’s risk

management and internal control processes

– Approved 2014 Annual Report

March
– Approved a new Directors’ remuneration policy for vote by

shareholders

– Approved the Notice of 2015 AGM

business

– Discussed talent management and succession planning initiatives

including front office recruitment activity

– Discussed an update by the Operations and Technology team on the
objectives, strategy and outlook for their part of the business in 2016
and beyond

November
– Presentation on Global Sales strategy and progress from the Co-

Heads of Global Sales

– Reviewed the assumptions for the FY16 Budget and FY16–18 Medium

Term Plan

– Received an update on cyber security assessment, staff awareness

May
– Reviewed the seeding book and approved an increase in the cap and

training and protection

– Discussed Board succession and diversity initiatives

the value at risk limit (VaR)

– Started regular tracking of progress against plan on recent acquisitions
– Considered pre-AGM feedback on Directors’ remuneration policy

December
– Reviewed 2015 from a market perspective – changes in register,

June
– Approved the refinancing of the Revolving Credit Facility (RCF) at a

reduced level ($1 billion)

– Board Strategy review (see further details below)

July
– Reviewed and approved the 2015 ICAAP
– Discussed feedback from employee survey and management actions

buyside sentiment and price volatility

– Preliminary approval of FY16 Budget and FY16-18 Medium Term Plan

subject to year end numbers

– Received presentations on machine learning by AHL and the

development of Man’s alternative beta solution by the CIO of FRM

– Discussed the output of the 2015 Board evaluation
– Reviewed non-executive directors’ fees and the annual update on

directors’ external appointments

– Approved revised terms of reference for the Audit and Risk and

proposed in response

Remuneration Committees

– Discussed action points from the Board Strategy review
– Considered Half-Year Risk Update
– Approved 2015 interim dividend and Interim Report
– Approved 2015 Sharesave Offer
– Reviewed and approved updated Global Inside Information Policy,

Share Dealing Code and disclosure of inside information procedures

– Reviewed and approved updated schedule of matters reserved for

Board decision

Board Strategy review:

– Received presentation from Barclays Strategic Consulting on hedge

– Reviewed the build out of AHL beyond trend following and its

fund trends and outlook

collaboration with Numeric

– Discussed strategic objectives in relation to product development,

Sales capacity and growth

– Reviewed the restructuring and development of the GLG alternatives

– Reviewed FRM performance and flows
– Reviewed Numeric integration and strategic direction
– Reviewed Global Sales plans with particular focus on the US growth

business, the build out of the long only franchise and the development
of the CLO business

strategy

52 Man Group plc Annual Report 2015

B OA R D ACC O U NTA B I LIT Y

Board responsibility for risk management and internal controls
In accordance with the 2014 UK Corporate Governance Code
(the “Code”), the Board is required to monitor the Company’s risk
management and internal control systems on an ongoing basis and,
at least annually, carry out a review of their effectiveness and report on
this review to shareholders. Details of the Company’s ongoing process
for identifying, evaluating and managing the principal risks faced by the
Company are contained in the Risk management section on pages 34 to
37, together with details of those principal risks and their related mitigants.
A summary of the Company’s risk management and internal control
systems, including those relating to the financial reporting process, is
given below. These systems have been in place throughout the year and
up to the date of this report.

Financial reporting controls
The Group operates a financial controls framework which is designed
to provide assurance that proper accounting records are adequately
maintained and that financial information used within the business and
for external publication is reliable and free from material misstatement,
thereby safeguarding the Company’s assets.

This framework is managed through a process whereby control owners
certify that key preventative and detective controls have been performed

and are operating effectively. These include balance sheet reconciliations
and financial statement preparation processes. A sample of these control
certifications is independently spot checked to provide assurance that
they have been correctly certified.

During the year, formal monitoring of the results of the certification
process is carried out by senior management. Any material points of note
are escalated to the Audit and Risk Committee (ARCom).

Financial reporting
Fair, balanced and understandable assessment
The processes that were developed and reported on last year to
support the Board’s presentation of a fair, balanced and understandable
assessment of the Company’s position and prospects have also been
applied during 2015. Particular reliance is placed on the conclusions
and recommendations arising from the ARCom’s comprehensive review
of the Interim and Annual Report to ensure that there is consistency
between the narrative reporting and the financial information. Further
details of the ARCom’s review process can be found on page 58. All
contributors to the Company’s financial statements and Annual Report
are made aware of the fair, balanced and understandable requirement.
Executive Committee members and the heads of relevant business units
carry out an extensive review and verification exercise to support the
accuracy of the disclosures.

Board review of risk management and internal control systems
The Company’s risk management and internal control systems aim to safeguard assets, maintain proper accounting records and provide
assurance that the financial information used in the business and published externally is robust and reliable. The systems are designed to manage
key risks, rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against
material misstatement or loss. The systems comply with the FRC’s Guidance on Risk Management, Internal Control and Related Financial and
Business Reporting.

Whilst the Board retains overall responsibility for the Group’s systems of risk management and internal control, it has delegated oversight of this to
the ARCom.

To support its ongoing risk oversight responsibilities, the ARCom regularly reviews and considers:
– summary dashboards for risk, internal controls, the financial controls framework and compliance;
– presentations on the strategy and risk and control profile of the Group’s key business areas and in-depth reviews of the Group’s business functions;
– reports from the Risk & Finance Committee which monitors the effectiveness of risk mitigation through regular review of Risk and Control Self-

Assessments carried out by management as the first line of defence, scenario analysis, key risk indicators and operational risk event reports; and

– reports from Internal Audit regarding the operation and effectiveness of internal controls. The Internal Audit programme is designed to provide

objective assurance on the business areas, key controls and processes that are most significant in terms of the Group’s risk profile.

During the year, a number of operational and regulatory matters that had occurred were reported to the ARCom. Whilst Man sought to improve its
processes as a result, these matters were not considered sufficiently material in number or nature either to require separate disclosure in the financial
statements or to indicate that the control environment had not been working effectively.

The report from the Chairman of the ARCom on pages 57 to 60 provides further information on how the ARCom has discharged its risk oversight
responsibilities during the year.

The Board receives regular reports from the Chairman of the ARCom, business management and Group Risk on the risks to the achievement of
the Group’s operational and financial objectives, together with assurance that the level of risk retained is consistent with and being managed in
accordance with the Board’s risk appetite and with business planning. These reports include current and forward looking assessments of capital
and liquidity adequacy and a summary ‘risk dashboard’.

Annual review of risk management and internal controls
In addition to its ongoing monitoring of the Group’s risk management and internal controls, the Board has conducted a specific annual review of their
effectiveness during the year and for the period up to the date of this Annual Report. This review covered all principal risks and included a review of
all significant operational risk events and Internal Audit findings raised during the period. The Board also considered the potential impact of certain
risks identified by the business, the outcome of the firm-wide Risk and Control Self-Assessment process performed by business management and
the quality of the controls in place to mitigate these risks.

Following this review, the Board concluded that the Group’s risk management processes were effective and that there were no significant
weaknesses or failings in the system of internal controls.

Man Group plc Annual Report 2015 53

GOVERNANCE
C O R P O R A T E G O V E R N A N C E R E P O R T
C O N T I N U E D

B OA R D E FFECTI V E N E S S

Board induction
We arrange a comprehensive and tailored induction programme for our
non-executive directors as soon as possible after their appointment. The
programme is built around one-to-one meetings with members of our
Executive Committee, the Heads of Group functions and the Company
Secretary covering the broad areas of business set out in the table below.

Ian Livingston and Richard Berliand, who joined the Board in January
2016, have recently worked through this programme. In addition, Ian
has spent time talking to Board members and other people in the
business about all aspects of Man’s operation and culture. In his role
as Remuneration Committee member and prospective Remuneration
Committee Chairman, Richard received a briefing on current themes and
developments in executive remuneration for FTSE companies and Man’s
particular positioning and challenges. He will also have meetings with our
remuneration advisers and legal advisers on remuneration matters.

We always seek feedback from our new Board members on the content
and format of the induction programme in order to keep it refreshed
and well targeted. Further details of the programme can be found on
our website.

Board education and development
Man’s business
Board members regularly identify business areas and external market
trends about which they would like a better understanding. In 2015
the Board was keen to learn more about the development of Man’s
alternative beta product and participated in an in-depth discussion with
the CIO of FRM about the scale of the opportunity and the challenges
and risks attached. This is a key growth area which the Board will follow
closely in 2016. It was also interested to learn from the AHL team about
the application of machine learning in terms of pattern prediction and
recognition to the development of AHL models. Understanding the drivers
of the Sales opportunity and making further inroads into the US market
continue to be high on the Board’s agenda. In response to this interest,
the Co-Heads of Global Sales discussed with the Board the prospects for
and limitations on sales growth in different countries and the challenges
attaching to the achievement of the 2016 Global Sales budget.

Regulation
Our Board members are committed to keeping up-to-date on the ever
widening range of regulatory issues which may impact their governance
responsibilities. Details of briefings and workshops offered by external
firms are circulated by the Company Secretary as an adjunct to the
discussion of specific regulatory topics at Board meetings by our
auditors, remuneration and other advisers. During the year the Board
received refresher training on the Disclosure and Transparency Rules in
respect of the protection and timely disclosure to the market of inside
information as context for its review of the Company’s updated inside
information and share dealing code processes.

B O A R D I N D U C T I O N P R O G R A M M E

B U S I N E S S R E V I E W

M A R K E T
P O S I T I O N I N G &
PE R C E P T I O N

R E G U L ATO RY
E N V I R O N M E N T

PE O PL E , C U LT U R E
A N D VA LU E S

B OA R D PR O C E D U R E S
& G OV E R N A N C E
F R A M E WO R K

– Strategic direction and

priorities

– Analysis of markets in
which Man operates
– Overview of AHL, GLG,

– Review of financial and
market performance
– Recent analyst and
media coverage

– Analysis of shareholder

– Overview of the
Group’s key
compliance and
regulatory policies
– Recent changes in

FRM and Numeric
– Sales and distribution
– Operations and
technology

– Risk appetite and

framework

base and investor
perception
– Shareholder
engagement

regulatory landscape

– Hot topics and key

priorities for regulators
including relevant
thematic reviews
– Impact of upcoming

regulatory
developments on the
Group including MiFID
II, UCITS V and Senior
Manager Regime

– Discussion of key
business principles

– Key people and
succession plans

– HR priorities including
diversity, training and
talent pipeline
– HR structure

and outsourcing
arrangements

– Board processes and

relationships

– Board interaction with
key business areas
– Overview of listed

company structure and
governance framework

– Listed company

obligations

– Directors’ duties and

responsibilities

54 Man Group plc Annual Report 2015

The IDDAS report was presented to the Board in December 2015
and reviewed in more detail at the February 2016 meeting. The Board
discussed the themes arising and agreed a number of actions to address
the main areas identified for development in 2016 on which we will report
next year.

Review of individual performance
I met and discussed with each of the directors individually the evaluation
feedback on their contributions to the Board during the year. These
conversations identified areas where directors might bring additional
benefit to the Board and explored opportunities for their further
development in the role. Phillip Colebatch, in his role as SID, provided
feedback to me on my contribution as Chairman.

S H A R E H O LD E R E N G AG E M E NT

The Board is committed to maintaining an ongoing dialogue with
investors and is keen to understand the views of major shareholders.
The Head of Investor Relations regularly attends Board meetings to report
on important changes in the share register, share price performance,
investor sentiment and areas of enquiry. The Board also receives regular
detailed feedback on investor perceptions of the CEO and CFO.

Institutional investors
The Company has developed a comprehensive investor relations
programme through which the Head of Investor Relations, CEO and
CFO maintain a continuous dialogue with institutional investors on
performance, plans and objectives. This is achieved through one-to-one
meetings throughout the year and participation in UK, US and European
investor roadshows and investor conferences. Details of the 2015
Calendar of Investor Events are provided on the following page.

During 2015, the Chairman of the Remuneration Committee and the
Company Secretary spent considerable time consulting with major
shareholders and shareholder representative bodies on proposed
adjustments to the executive incentive limits within our remuneration
policy. Further details of this engagement on remuneration matters are
provided in the Directors’ Remuneration report on page 65.

Key areas which the CEO and CFO have discussed with investors during
the year have been:
– Progress of recent acquisitions, in particular Numeric
– Progress on US distribution
– M&A – potential new acquisitions
– Flows pipeline

2015 Board evaluation
In considering its approach to the 2015 evaluation, the Board took
account of the planned succession in the first half of 2016 of a Chairman
who was new to Man and who would wish to introduce his own ideas
on the operation and effectiveness of the Board. It was also aware of the
ongoing search for and appointment of a new non-executive director and
prospective Remuneration Committee Chairman. In these circumstances
the Board decided that, after two internal evaluations, there would be
value in carrying out an external evaluation but that this should be done
on a light touch basis. The evaluation was structured around one-to-
one conversations with Board members to cover action points arising
from the 2014 evaluation and to stimulate comment on areas of current
interest and on things which it was considered the Board did least well.
It was also agreed that there should be conversations with a number
of senior executives who regularly attended Board meetings to test the
level of Board challenge of their proposals and ask what further support
and contribution Board members could provide. The intention was that
the evaluation should be structured as a forward looking review with the
emphasis on what could be achieved in the future.

IDDAS Limited was selected to carry out the work, focusing on the
effectiveness of the Board, the contribution of individual directors, and
the operation of the Audit and Risk Committee and the Nomination
Committee. IDDAS Limited has no other connection with the Company.
The effectiveness of the Remuneration Committee was the subject of
an internal review facilitated by the Company Secretary. The findings
and priority areas of focus arising from the Committee evaluations
are discussed in the separate Committee reports. A summary of the
key strengths and main areas for development identified in the Board
evaluation is set out below.

K E Y A R E A S O F
P R O G R E S S / S T R E N G T H

– Board composition: the appointment of new non-executive

directors has strengthened the industry and corporate experience
on the Board and resulted in a well balanced team.

– Board relationships and challenge: relationships are described
as open, respectful and constructive. Board members feel able
to contribute and challenge freely; there are healthy differences of
opinion and no signs of group think.

– Ethics: Board members expressed a high degree of confidence in

the ethical standards set for the business by the CEO.

– Secretariat: the Board feels well served in matters of governance

and administration by the Company Secretariat.

M A I N A R E A S F O R
D E V E L O P M E N T

– Strategy: drilling down on the big strategic questions including the
direction of the industry, the acquisition strategy and the delivery of
value from Man’s existing and future footprint.

– Investment in people: monitoring the outcomes of investment in

people against a more detailed strategy.

– Talent and succession: reviewing the executive talent pool,

seeking more interaction with the senior team below the CEO and
creating robust succession plans for the top roles.

Man Group plc Annual Report 2015 55

GOVERNANCE

C O R P O R A T E G O V E R N A N C E R E P O R T
C O N T I N U E D

Private investors
Our private investors are encouraged to access the Company’s Interim
and Annual Reports and half-year and final results presentations on
our website. Other useful information such as historic dividend records
and shareholder communications is also available on the website.
Shareholders can use the site to access our Registrars’ Shareview
website (www.shareview.co.uk) where their shareholding account can be
managed online.

We are always keen to understand the views of and answer questions
from private investors and offer a dedicated shareholder mailbox
(shareholder@man.com) for this purpose. We also have a separate
mailbox for use in respect of AGM queries (agm@man.com).

Shareholder meetings
Shareholders are invited to attend our AGM in May each year. At our 2015
AGM, Manny Roman gave shareholders an overview of the progress
of the business and our future plans and outlook. This was followed by
the opportunity for shareholders to ask questions about the resolutions
before the meeting and about the business more generally. We look
forward to meeting shareholders again and providing a further business
update at our 2016 AGM in May this year.

Jon Aisbitt
Chairman

2 0 1 5 C A L E N D A R O F
I N V E S T O R E V E N T S

FEB

MARCH

APRIL

MAY

JUNE

JULY

AUG

SEPT

OCT

NOV

DEC

2014 year end results released
UK investor roadshow

UK and US investor roadshows
Investor engagement on proposed remuneration policy
changes
BAML Group investor meeting
AHL investor meeting
Morgan Stanley Annual European Financials conference

Dialogue with investors on AGM remuneration
resolutions

Q1 2015 Trading Statement
Annual General Meeting
Citi Investor Group meeting

Paris investor roadshow
Autonomous Research: Financials Rendez-Vous

2015 interim results released
UK investor roadshow

UK investor roadshow

Barclays Global Financial Services Conference
(New York)
UK and US investor roadshows

Bank of America Merrill Lynch Annual Banking and
Insurance Conference
Q3 2015 Trading Statement

Frankfurt, Geneva and Zurich investor roadshow
JP Morgan ‘Best of British’ conference
Renewed engagement on executive remuneration with
shareholder representative bodies

Citi ‘Diversified Financials’ conference

S TATE M E NT O F CO M PLI A N C E

The Company has, throughout the year ended 31 December 2015,
applied the principles of and complied with the provisions of the UK
Corporate Governance Code dated September 2014 except in the
following respects:

Remuneration Committee membership
Provision D.2.1 of the Code requires the Remuneration Committee (the
‘Committee’) to consist of at least three independent non-executive
directors. Prior to John Cryan’s appointment as an independent
non-executive director and member of the Committee on 15 January
2015, the Committee comprised only two independent non-executive
directors, Phillip Colebatch and Nina Shapiro, in addition to our
Chairman. John Cryan ceased to be a member of the Committee
following his appointment as Co-CEO of Deutsche Bank on 1 July
2015 and as a result the Committee reverted to comprising only two
independent non-executive directors for the remainder of the year.
Ian Livingston and Richard Berliand were appointed as independent
non-executive directors and as members of the Committee on 1
January and 19 January 2016 respectively, bringing the total number of
independent non-executive directors on the Committee to four.

Setting executive directors’ and Chairman’s remuneration
Provision D.2.2 of the Code requires that the Remuneration Committee
(the ‘Committee’) should have delegated responsibility for setting the
remuneration of all the executive directors and the Chairman. The terms
of reference of the Committee provide that the Committee has authority
only to recommend, for approval by the Board, executive directors’
remuneration and the remuneration of the Chairman1. The Board
believes that, given the importance for the business of motivating the
executive team to deliver the Company’s strategy, it is appropriate for
all non-executive Board members, rather than just those who sit on the
Committee, to determine the executive directors’ compensation. It also
believes that, in order to provide transparency and allow the views of all
the directors, executive and non-executive, to be taken into account,
it is appropriate for all Board members to determine the Chairman’s
remuneration.

1 This authority is given subject to the proviso that no Board member should
participate in the recommendation or approval of his or her compensation.

Other information
Certain additional information in relation to the Company’s share
capital, the powers of the directors and amendments to the articles
of association that is required to be disclosed in the Corporate
Governance report pursuant to DTR 7.2.6 may be found in the
Directors’ report on pages 88 to 89.

56 Man Group plc Annual Report 2015

A U D I T A N D R I S K C O M M I T T E E
R E P O R T

Matthew Lester
Chairman, Audit and Risk Committee

Dear Shareholder

During the year, the Audit and Risk Committee (the ‘Committee’)
continued to support the Board in its assessment of the integrity of the
Group’s financial reporting, monitor the effectiveness of the Group’s
systems of risk management and internal controls, and oversee the
activities of the Group’s Internal Audit function and its external auditor.

The Committee has also devoted significant time to developing its
understanding of the risk and control profile of key business areas and
to assessing and overseeing the implementation of new requirements
around risk management and internal controls introduced by the latest
edition of the UK Corporate Governance Code (the ‘Code’).

CO M P O S ITI O N A N D AT TE N DA N C E
I am supported in my role as Chairman of the Committee by four other
Committee members: Phillip Colebatch, Andrew Horton, Dev Sanyal and,
latterly, Ian Livingston who joined the Committee in January 2016. It is
the intention that Ian Livingston will succeed Jon Aisbitt as Chairman of
the Board following the 2016 AGM, at which time he will step down as a
member of the Committee.

All members of the Committee are independent, non-executive directors
and bring extensive financial and commercial experience from a variety
of industries, further details of which are provided on pages 46 to 48. As
Chief Finance Officer of Royal Mail plc, I am considered to have recent
and relevant financial experience for the purposes of the Code.

During the year, we met on six occasions with attendance at these
meetings set out below:

Attendance
record

Matthew Lester (Chair)

Phillip Colebatch

Andrew Horton

Dev Sanyal

6/6

The Board Chairman, CEO and CFO are invited to attend Committee
meetings along with the Chief Risk Officer, Global Head of Legal
and Compliance, Financial Controller, Head of Internal Audit and
representatives from Deloitte, the Group’s external auditor.

At the end of each meeting, I meet with the Head of Internal Audit and
representatives from Deloitte in the absence of management. Following
each Committee meeting, I communicate the key areas of discussion and
make recommendations to the Board as appropriate.

RO LE S A N D R E S P O N S I B I LITI E S
The Committee is integral to Man Group’s governance framework
through its oversight of the Group’s financial reporting, risk management
and internal controls, and internal and external audit. The Committee’s
roles and responsibilities are outlined in further detail below. These
are derived from the Committee’s terms of reference (available on
the Company’s website) which are reviewed by the Committee on an
annual basis and referred to the Board for approval. Details of how
the Committee has discharged these responsibilities are set out in the
section entitled ‘Key items considered during the year’.

Financial Reporting

– Monitor the integrity of the financial information contained in the

interim and annual financial statements with particular focus on key
accounting policies and judgements.

– Review the longer-term viability and going concern statements and

recommend their approval to the Board.

– Advise the Board on whether the Committee believes the Interim
and Annual Reports to be fair, balanced and understandable.

Risk Management, Internal Controls and Compliance

– Monitor and review the effectiveness of the Group’s systems of

risk management and internal controls (please refer to page 53 for
further details of the Committee’s ongoing monitoring and review of
the Group’s systems of risk management and internal controls).

– Ensure that a robust assessment of the principal risks facing
the Group has been undertaken and advise the Board on the
management and mitigation of these risks.

– Review the effectiveness of the Group’s regulatory reporting

activities, Compliance function and arrangements for staff to raise
concerns, in confidence, about possible wrongdoing in financial
reporting or other matters.

– Report to the Remuneration Committee any findings in relation
to risk matters which may impact its decision on discretionary
remuneration payments.

Internal Audit

– Approve the annual Internal Audit plan and Charter and Internal

Audit activities.

– Review the effectiveness of the Internal Audit function.
– Review all significant Internal Audit recommendations and oversee

progress in addressing these.

External Audit

– Recommend the appointment, and determine the remuneration
of, the external auditor, including reviewing the external auditor’s
effectiveness and independence.

– Review and approve the external audit plan and the external

auditor’s control procedures.

– Review the findings of the external audit and the external auditor’s
management letter and oversee management action to address
findings where necessary.

– Approve and monitor the policies relating to the provision of non-
audit services by the external auditor and the hiring of personnel
from the external auditor.

– Arrange for the external audit to be put out to tender as often as is
required by applicable law, rules, regulations and best practice.

Man Group plc Annual Report 2015 57

GOVERNANCE

A U D I T A N D R I S K C O M M I T T E E R E P O R T C O N T I N U E D

Structure and format of meetings
The Committee has an annual forward agenda in place with agenda items
scheduled to coincide with key events in the financial reporting cycle,
specific risk matters that the Committee has identified and standing items
that the Committee is required to consider in accordance with its terms of
reference. The annual agenda is supported by agenda setting meetings
held in advance of each Committee meeting which I attend, along with
members of the senior management team, to identify key issues impacting
the business that may require consideration by the Committee. I meet
privately with the Head of Internal Audit following each of these meetings.

Management submit reports and presentations to the Committee on key
financial reporting, risk, compliance and audit matters and attend Committee
meetings (as previously described) to highlight significant issues and respond
to queries raised by the Committee in respect of these matters. At each
meeting, the Committee considers dashboards on the key risks impacting
the business, compliance matters, the financial controls framework and
internal controls. These dashboards are designed to focus on any matters
that may require further discussion by the Committee.

K E Y ITE M S C O N S I D E R E D D U R I N G TH E Y E A R
Financial reporting
Accounting judgements and significant accounting matters
As part of the process for monitoring the integrity of the financial
information contained in the interim and annual financial statements,
the Committee reviewed the key accounting judgements and policies
adopted by management and confirmed that these were appropriate.
The significant areas of judgement identified by the Committee, in
conjunction with management and the external auditor, are set out in
the table on the opposite page together with a number of other areas
that the Committee deemed to be significant in the context of the
financial statements.

Fair, balanced and understandable assessment
At the request of the Board, the Committee considered whether the
Interim and Annual Reports were fair, balanced and understandable
and provided the information necessary for shareholders to assess the
Group’s performance, business model and strategy. The Committee
reviewed the interim and annual financial statements in conjunction with
the narrative sections of the reports to ensure that there was consistency
in the information reported, that appropriate weight had been given to
both positive and negative aspects of business performance and that key
messages had been presented coherently. The Committee concluded that,
taken as a whole, the Interim and Annual Reports were fair, balanced and
understandable. Further details of processes supporting the fair, balanced
and understandable assessment can be found on page 53.

Risk management, internal controls and compliance
The Committee spent considerable time discussing the new
requirements around risk management and internal controls introduced
by the latest edition of the Code. Particular focus was given to the
requirement for the Board, either directly or through the Committee, to
monitor the Group’s risk management and internal control systems on an
ongoing basis. The Committee is satisfied that, through its regular review
of dashboards described above, its in-depth assessment of key business
areas and functions (referred to below) and its ongoing review of progress
against the Internal Audit Plan, it is monitoring the effectiveness of the
Group’s systems of risk management and internal control on an ongoing
basis. Further details can be found in the Corporate Governance report
on page 53.

Oversight of risk and control environment – key business areas
As mentioned above, the Committee continued to develop its
understanding of the risk and control environment within key business
areas. Representatives from the Group’s Sales team, Numeric and AHL
were invited to present to the Committee on the risk and control profile
of their respective business areas. The presentations followed a similar

58 Man Group plc Annual Report 2015

structure to those provided by AHL, GLG and FRM, which I reported
on last year, and were designed to enable the Committee to assess,
in context, the significant risks perceived by each business area and
the controls in place to mitigate these risks to the extent desired. The
Committee was particularly keen to understand the extent to which a
shift in product focus impacted the Sales team from a risk perspective,
how Numeric’s risk processes and controls had evolved post-acquisition
and whether there had been any changes in AHL’s risk and control profile
since the presentation provided in 2014.

Representatives from AHL were also invited to present to the Committee
during the year to discuss the processes for defining and dealing with
potential operational events within AHL. The Committee sought to
understand the cause and impact of these events and the changes that
had been made to strengthen the controls in this area.

Oversight of risk and control environment – key functional areas
The Committee also reviewed a number of the Group’s key functional areas
including Compliance, Finance and IT and Operations. In accordance with
the Committee’s forward agenda, an in-depth review of the Group’s Risk
function will take place in H1 2016 and will be reported on next year.

Compliance
During the year, the Global Head of Legal and Compliance presented the
2015 Compliance Plan to the Committee. This outlined the Compliance
function’s strategic goals and the development and implementation of
various policies and processes to support the function in meeting these
goals. Consideration was given to the regulatory environment within
which the Group operated, particularly in the context of the recently
acquired businesses in the US and the integration of these companies
onto the Group’s existing compliance platforms.

Finance
The Committee also considered a presentation from the Group Financial
Controller on the Finance function’s governance arrangements and
the key areas of focus during 2015 in terms of process and system
improvements. Given the function’s global presence, the Committee
was particularly keen to understand the processes that were in place to
retain oversight centrally and the extent to which the recently acquired
businesses had been integrated onto the Group’s finance systems and
financial control framework.

IT and Operations
The Group’s Chief Operating Officer, Chief Technology Officer and Head
of Business Operational Risk were invited to attend several meetings
throughout the year to update the Committee on changes impacting the
risk and control environment of the IT and Operations function.

Given the increased risk of cyber-attacks faced by all companies, the
Committee dedicated significant time to understanding the Company’s
response to this heightened threat, further details of which can be found
in the ‘Principal risks and mitigants’ section on pages 36 and 37. The
Committee reviewed and discussed the initiatives that were being rolled out
across the business to help improve the firm’s defences against this risk.

Outsourcing risk also continued to be an area of focus, particularly in light
of one of Man’s key service providers exiting from its fund administration
and transfer agency businesses. The Committee discussed and
endorsed management’s recommendation in respect of the appointment
of an alternative provider for these services.

Consideration was also given to proposed improvements to the processes
and controls around identity access management, key personnel changes
within Operations and resourcing within the Technology team.

AC CO U NTI N G J U D G E M E NT S A N D S I G N I FI CA NT ACCO U NTI N G M AT TE R S

Area of consideration

Role of the Committee

Conclusion

Goodwill impairment
Goodwill for each of the Group’s cash
generating units (GLG, AHL, FRM and
Numeric) is tested for impairment at least
annually through the application of a ‘value in
use’ model. This is judgemental in nature as
it requires estimates concerning future cash
flows, growth rates and associated discount
rates to be taken into account.

Please refer to Note 13 in the Group financial statements
for further details.

Investment in funds

The Group holds investments in a number
of funds which it manages. Judgement is
required to be exercised in terms of assessing
whether these investments are controlled
by the Group and therefore need to be
consolidated into the Group’s balance sheet.

The valuation of the Group’s illiquid
investments, seeding book and CLO
portfolio, together with the underlying
processes to support the valuation, also
require careful consideration.

Please refer to Note 16 in the Group financial statements
for further details.

Adjusting items

The directors focus on profit before adjusting
items (adjusted profit) as this reflects the
underlying trends in the business and the
recurring revenue and costs that drive the
Group’s cash flow. Adjusting items relate to
non-recurring items or those resulting from
acquisition and disposal related transactions.

Please refer to Note 2 in the Group financial statements
for further details.

Rebates and commissions

The effectiveness of the processes and
controls around accurately accruing for
rebates and commissions is considered to
be important in ensuring that a true and fair
view of the Group’s operations is presented.

The Committee considered reports from
management outlining the methodology for
the impairment assessment and challenged
the assumptions underpinning the goodwill
valuation model with specific focus on the
sensitivity of the model. During the year,
management proposed that FRM goodwill be
impaired by $41 million for the six months to
30 June 2015 due to a decline in FUM versus
forecast and an increase in costs as a result
of adverse FX movements during the six
month period.

After extensive discussion and challenge, the
Committee confirmed that the FRM goodwill
impairment was appropriate in respect of the
Interim Report but that no further impairment
was required in any of the cash generating
units at the year end.

The Committee reviewed management’s
assessment of the investments which the
Group is deemed to control in accordance
with IFRS 10.

The Committee concluded that it was
satisfied with management’s assessment
of the entities which are deemed to be
controlled by the Group and the associated
accounting treatment.

The Committee reviewed and discussed
reports from management outlining the
processes that were followed both internally
and by outsourced providers to value the
illiquid portfolio, seeding book and CLO
portfolio.

The Committee confirmed that it was
comfortable with the valuation of the illiquid
portfolio, seeding book and CLO portfolio,
and the methodology on which these
valuations were based.

The Committee reviewed and challenged
the adjusting items contained in the Group
financial statements and considered whether
there was consistency of approach from
period to period, an appropriate symmetry
between losses and gains and whether the
reversal of any accruals previously classified
as adjusting items was maintained.

The Committee concluded that the adjusting
items were appropriate and provided a fair
assessment of the underlying profitability of
the business.

During the year, the Committee closely
monitored improvements to rebate and
commission reporting which the Committee
identified as an area of focus for 2015. At the
Committee’s request, the Head of Financial
Operations provided an update at each
meeting summarising the progress that had
been made in implementing an integrated
technology platform to automate these
processes and strengthen the controls in
this area.

The Committee has concluded that the
improvements to processes and controls
in relation to rebates and commissions are
appropriate and is satisfied with the action
that management has taken to date.

Viability

The Committee is required to report to the
Board on whether there is a reasonable
expectation that the Company will be
able to continue in operation and meet its
liabilities as they fall due over the period of
their assessment, drawing attention to any
qualifications, or assumptions as necessary.

The viability statement can be found on page 34.

The Committee discussed the requirements
introduced by the 2014 edition of the UK
Corporate Governance Code regarding
the preparation of the Company’s viability
statement which included consideration of
the proposed three-year assessment period
in line with the Group’s business planning
horizon and the processes supporting the
assessment of the Group’s viability.

The Committee concluded that the three-
year assessment period was appropriate and
recommended the draft viability statement to
the Board for approval.

Man Group plc Annual Report 2015 59

GOVERNANCE
A U D I T A N D R I S K C O M M I T T E E R E P O R T C O N T I N U E D

Internal audit
The Group’s Internal Audit function continues to be performed by KPMG.
At each meeting, the Committee considered Internal Audit progress
reports presented by the Head of Internal Audit, with particular focus on
the extent to which deadlines were being achieved and management’s
response to the recommendations contained in the reports. Whilst no
significant weaknesses were identified in any of the Internal Audit reports,
a number of improvements to certain processes and controls were
implemented in response to the recommendations put forward.

In accordance with the non-audit services policy, any potential services
to be provided by the external auditor, which are not excluded under the
non-audit services policy but which have an expected value of $75,000 or
more, must be approved by the Committee in advance. The Committee’s
approval is also required where the pre-approved fees in any financial
year exceed $2 million in aggregate (provided this does not exceed the
70% cap on non-audit services as a percentage of the statutory audit fee
introduced by EU independence legislation).

During the year, the Committee approved the appointment of a new
Head of Internal Audit who will succeed the current Head of Internal
Audit in 2016. It also reviewed and approved the 2016 Internal Audit Plan
(the ‘Plan’) which included details of the audits to be performed during
2016 and the resources required to deliver the Plan. The Committee has
agreed to monitor and formally review the Plan during the course of 2016
to ensure that it remains appropriate.

External audit
Effectiveness of external audit process
As reported last year, the Committee decided to defer its formal
evaluation of the effectiveness of the external audit process until
Deloitte had completed its first audit cycle. At the May 2015 meeting,
the Committee considered responses to a questionnaire which had
been completed by Committee members and various members of the
management team. The questionnaire focussed on several components
of the external audit process including the quality of the audit partner
and team, planning and execution of the audit, communication with the
Committee and the external auditor’s independence and objectivity.
The responses indicated that Deloitte had made a strong start in the
first year of the audit engagement and had become familiar with the
Group’s control environment and key accounting issues. A number of
areas, primarily around resourcing and the prioritisation of audit risks,
were identified as requiring further consideration and the Lead Audit
Partner, Mark FitzPatrick, set out his plans to address these issues in the
2015 Audit Plan (see below). After extensive discussion, the Committee
concluded that the external audit process in respect of the 2014 financial
statements had been effective.

2015 external audit plan
During the year, the Committee reviewed and approved the 2015 external
audit plan, including the proposed materiality threshold, the scope of
the audit and the significant audit risks. As part of this discussion, the
Committee considered the findings of the review undertaken by the
FRC’s Audit Quality Review (AQR) team of Deloitte’s audit of the Group’s
financial statements for the year ended 31 December 2014, which the
AQR team had selected as part of their 2015 annual inspection of audit
firms. The focus of the review was to identify areas where improvements
were required rather than highlighting areas where work was performed
at or above the expected level. I received a full copy of the findings and
discussed these with Deloitte. The Committee has confirmed that no
significant areas for improvement were identified within the report and
that it is satisfied that there is nothing in the report which might have a
bearing on Deloitte’s appointment.

Auditor independence and the provision of non-audit services
In order to safeguard the independence and objectivity of the
external auditor, the Committee is responsible for the development,
implementation and monitoring of the Group’s policies on the provision
of non-audit services by the external auditor and the hiring of personnel
from the external auditor. The Committee reviewed and approved these
policies during the year.

60 Man Group plc Annual Report 2015

The table below shows the remuneration paid to Deloitte in 2014 and
2015.

2015
$000

2014
$000

Fees payable to the external auditor

for the audit of the Company and the
consolidated financial statements

Other services:
The audit of the Company’s subsidiaries

pursuant to legislation

Audit-related assurance services

Tax advisory services

Other assurance services

All other services

597

450

1,543

273

–

1,435

265

208

453

Total auditor’s remuneration

2,508

2,893

Following a formal assessment of the external auditor’s independence
and objectivity at its meeting in February 2016, the Committee concluded
that Deloitte continued to be independent and objective.

Reappointment of Deloitte as external auditor
As previously reported, the Committee led an external audit tender
process in 2013, pursuant to which Deloitte LLP was formally appointed
as the Group’s external auditor by shareholders. In accordance with
the Code and the Competition and Markets Authority Order 2014, the
Company will be required to put its external audit process out to tender
again in 2023 at the latest. The Committee will continue to monitor legal
and regulatory developments around audit retendering and auditor
rotation to ensure the Company continues to comply with all relevant
requirements in this area.

Following the Committee’s review of the effectiveness of the external
audit process and its assessment of the external auditor’s independence
and objectivity, it has recommended the reappointment of Deloitte as the
Group’s external auditor to the Board for approval by shareholders at the
2016 Annual General Meeting.

Committee evaluation
During the year, the effectiveness of the Committee was reviewed by
an external consultant as part of the wider Board evaluation process.
Interviews were conducted with all Committee members and regular
attendees, the results of which confirmed that Committee was operating
effectively. Responses indicated that the Committee meetings were well
structured and that constructive and appropriate challenge was provided
by all members. Whilst it was felt that there was a suitable balance
between financial reporting and risk matters, an area that was identified
as requiring further consideration was around whether strategic risk
should be discussed by the Committee or at Board level. The Committee
has referred this feedback to the Board and appropriate action will be
taken during 2016 to reflect the outcome of this discussion.

Matthew Lester
Chairman, Audit and Risk Committee

N O M I N A T I O N C O M M I T T E E R E P O R T

Jon Aisbitt, Nomination
Committee Chairman

Dear Shareholder

2015 was a busy year for the Nomination Committee (the ‘Committee’)
with considerable time spent on the search for my successor as
Chairman of the Board and for a new non-executive director to take on
the role of Remuneration Committee Chairman. Phillip Colebatch, as
Senior Independent Director, led the Board Chairman search from the
start of the year. Full details of the timeline and key steps in this process,
in which I took no active part, are set out on page 63. The search for a
new Remuneration Committee Chairman was triggered by John Cryan
stepping down from that role following his appointment as co-CEO of
Deutsche Bank in July. I led this search independently of the search for
my successor using the services of a different search firm and ensured
that no candidates were under consideration for both roles. Details of this
process are given on page 62.

Ian Livingston
We are very pleased with the outcome of our searches and the
key appointments we have been able to make. Ian Livingston was
appointed as a non-executive director and as a member of all the main
Board Committees with effect from 1 January 2016. Subject to his
reappointment by shareholders at the 2016 AGM, he will succeed me as
Chairman at the conclusion of that meeting. Ian has a broad knowledge
of capital markets, well established links with the financial community
and extensive executive and non-executive Board experience. As the
former CEO of BT Group, he brings to Man proven success in leading
the integration and development of overseas businesses and in-depth
operational expertise. His international and client driven background will
also assist in the furthering of Man’s relationships with Regulators and
Governments worldwide and the building of key client relationships.

Richard Berliand
Richard Berliand emerged as the leading contender in our search for a
new non-executive director. He was appointed to the Board and to the
Remuneration Committee and Nomination Committee on 19 January
2016 and, subject to his reappointment by shareholders at the 2016
AGM, will succeed Phillip Colebatch as Remuneration Committee
Chairman at the conclusion of that meeting. Richard brings extensive
experience of the markets and regulatory environment in which Man
operates, a close understanding of its business and clients and in-
depth operational expertise. As a global markets professional with a 23
year career at J.P. Morgan, he is very familiar with the structuring and
dynamics of executive pay within a high performance high bonus culture.

Board composition and gender diversity
Feedback from our recent Board evaluation, which included the views of
both Board members and executive attendees, confirms the progress
that has been made in building the Board’s strength and credibility. With
the diverse background of the current team of non-executive directors,
it has the full range of skills and experience required to move beyond the
day to day and tackle the long-term business challenge.

We recognise, nonetheless, that there is still work to do in attracting
female directors to our Board. The report below highlights a new
approach we are exploring in support of this objective and we look
forward to benefiting from the increased diversity of outlook and decision
making that success in our endeavour may bring.

Full details of the Committee and its activities during the year are given
below. I have every confidence in the continued progress of its work and
wish it every success for the future.

Jon Aisbitt
Chairman

M E M B E R S H I P A N D M E E TI N G S
All our non-executive directors are members of the Committee and
meetings are normally attended by Manny Roman. Five formal meetings
were held during the year as shown in the attendance table below with
substantial informal communication and dialogue between meetings
to support and progress the Board searches. In addition, Committee
members continued to take advantage of non-executive dinners to
discuss people and executive succession issues. The main functions of
the Committee are set out in the Board governance chart on page 51 and
full terms of reference can be found on our website.

Jon Aisbitt, Chairman

Phillip Colebatch

John Cryan

Andrew Horton

Matthew Lester

Dev Sanyal

Nina Shapiro

Attendance
record

5/5

Man Group plc Annual Report 2015 61

GOVERNANCE
N O M I N A T I O N C O M M I T T E E R E P O R T C O N T I N U E D

C O M M IT TE E ACTI V ITI E S D U R I N G TH E Y E A R
In addition to the search for a new Chairman of the Board and a new
Chairman of the Remuneration Committee, the Committee addressed
the following specific areas:

Executive development and succession
– Discussed career development opportunities for top executives.
– Reviewed with the Board the continued evolution of Group succession

plans, the identification of business critical roles and progress on
mentoring, coaching, cross-training and internal moves.
– Introduced a “NED/executive pairing” initiative to support the

development of Executive Committee members.

Renewal of non-executive director appointments*
– Reviewed and recommended to the Board the reappointment of

Andrew Horton and Dev Sanyal to the Board for a second three-year
term, taking account of the positive feedback on their contribution to
the Board from the 2015 Board evaluation.

* Mr Horton and Mr Sanyal were absent from and took no part in these discussions.

Diversity
– Appointed The Zygos Partnership (Zygos), who have no other

connection with the Company, to carry out a broad search to identify,
for future development and mentoring, talented female candidates with
the business knowledge and skills required to serve as directors on
Man’s Board but who currently have limited Board level experience.

C O M M IT TE E E VA LUATI O N
IDDAS Limited carried out an external evaluation of the effectiveness
of the Committee during the year as part of the broader 2015 Board
evaluation. The feedback suggested that the Committee had worked
well to achieve the new Board Chairman and Remuneration Committee
Chairman appointments. There was appreciation of the Committee’s
considered approach to the timing of Board appointments and innovative
thinking on ways to attract high quality people to the Board.

A PP O I NTM E NT O F R I C H A R D B E R LI A N D

June 2015 – search decision
– Following the announcement of the appointment of John Cryan as
co-CEO of Deutsche Bank, I contacted all Committee members
to agree the urgent need to search for a new Remuneration
Committee Chairman and to recommend to the Board the
reappointment of Phillip Colebatch to that role in the interim period.

– Zygos was appointed to carry out the search.

July 2015 – review of long list
– The Committee reviewed and shared feedback on a list of
candidates researched by Zygos who had confirmed their
interest in the role. The list profiled the candidates against the
key competencies and experiences required and highlighted any
potential conflicts of interest identified by Manny Roman.
– The Committee identified selected candidates for interview.

August 2015 – interview process
– The short listed candidates were interviewed by Manny and me.

September 2015 – selection decision
– Manny and I gave feedback on the interviews to the Committee
and identified Richard Berliand as our preferred candidate.
Arrangements were then made for him to meet the rest of the
Board.

– Following these meetings, the Committee recommended Richard’s
appointment to the Board. The Board approved the appointment
subject to receipt by me of supportive live references and FCA
approval.

November 2015 – FCA review
– Formal application for FCA approval was submitted.

January 2016 – announcement
– FCA approval was received and the appointment was announced.

The main priorities identified for the Committee for 2016 were:
– the pursuit of the new gender diversity initiative as part of the continued

refreshing of the Board;

– encouraging the further development of talent management and

succession planning processes and output across the business; and
– formal discussion of succession for the top executive roles, including

the CEO and CFO.

Jon Aisbitt
Chairman

62 Man Group plc Annual Report 2015

A PP O I NTM E NT O F I A N LI V I N G S TO N

In December 2014, the Chairman reported to the Committee that
he had discussed with each Board member individually his broad
retirement plans and the arrangements which, when appropriate, might
be put in place to ensure a timely, orderly and successful handover.
I was invited, as Senior Independent Director, to lead the search for
his successor and set out below the main considerations and stages
involved in that work.

December 2014 – governance and process
– The Committee reviewed and agreed the adoption of a best practice

procedure for the conduct of the search. This reflected current
governance requirements and discussions with other major listed
companies which had recently managed a chairman succession. It
also took account of the need for the Board to derive benefit from
the current Chairman’s views on the search while distancing him
completely from any involvement in the decision making process in
accordance with governance requirements.

January 2015 – private discussion with Committee members
– I held private discussions with individual Committee members to
establish whether any current non-executive directors might be
candidates for the role.

February 2015 – decision on search firm, role specification and
process
– The Committee:

1. considered the search firms which were the principal contenders for
the assignment in light of those firms’ understanding of the current
Board and executive team. It agreed to appoint Egon Zehnder (EZ)
using the same lead consultant who had worked on other recent
Board searches. EZ have no other connection with the Company. It
decided not to take any public steps in the search process until a firm
decision had been made on Jon Aisbitt’s retirement date and this had
been publicly announced.

2. agreed a detailed role and person specification which took account
of the current stage of development of the business, the stakeholder
dimension, the interaction with the executive team and the signals to
be given to staff and to the market. This was based on feedback from
a series of meetings I had with all the non-executive and executive
directors.

3. appointed a sub-Committee to take forward the search process
chaired by me and comprising Matthew Lester, Dev Sanyal and
Manny Roman, thereby ensuring an appropriate balance of executive
and non-executive membership and length of tenure on the Board.

4. approved a step plan, for implementation by the sub-Committee

when appropriate, covering the review of a long list, the identification
and selection of short listed candidates and the interview process. A
protocol for reports to and decisions to be made by the full Committee
at key stages was established.

May 2015 – review of long list
– Following the announcement of Jon Aisbitt’s retirement, the sub-
Committee considered a discussion list of possible candidates
produced by EZ, identified an initial long list for EZ to approach
and, on the basis of EZ’s feedback, agreed a short list for
recommendation to the Committee.

June 2015 – confirmation of short list
– The Committee reviewed the EZ feedback and the CVs of the
recommended candidates and agreed that each should be
interviewed.

July 2015 – interview process
– The short listed candidates were interviewed by Manny Roman and

me. Feedback was provided to the Committee which agreed that the
preferred candidates should be interviewed by the remaining sub-
Committee members.

September 2015 – selection decision
– Ian Livingston was recommended to the Committee as the sub-

Committee’s preferred candidate. The non-executive directors not on
the sub-Committee interviewed and endorsed the sub-Committee’s
conclusion.

– The Committee agreed to recommend Ian’s appointment to the
Board subject to the receipt by me of supportive live references.

November 2015 – Board approval and FCA review
– The Board approved Ian’s appointment subject to FCA approval.
Ian then had a ‘due diligence’ meeting with Jon Aisbitt. I agreed
contractual terms with Ian on the basis recommended by the
Remuneration Committee and approved by the Board.

– Formal application for FCA approval was submitted.

December 2015 – announcement
– FCA approval was received and the appointment was announced.

Phillip Colebatch
Senior Independent Director

Man Group plc Annual Report 2015 63

GOVERNANCE
D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T
1 . C H A I R M A N ’ S A N N U A L S T A T E M E N T

Short-term incentives
These are used to incentivise performance against annual objectives
set by the Board for individual executive directors each year. The
maximum value which may be awarded under our short-term incentives,
as approved at the 2015 AGM, is 300% of salary. The annual objectives
reflect the Board’s view of the immediate operating imperatives which
will help to build longer-term business growth. In setting and reporting on
these objectives, we are conscious of investor appetite for the adoption
and disclosure of quantitative objectives against which shareholders can
assess executive performance and the Committee’s reward decisions.
Man’s two executive directors are responsible for the overall development
of the business in terms of driving strategy, providing structure and
leading culture. Their objectives will, therefore, tend to be more qualitative
and descriptive than quantitative. While some of the CFO’s objectives
may lend themselves more to quantification in terms of the achievement
of budgetary and other metrics, the CFO has a broad remit and works
closely with the CEO on all major strategic and other key objectives. It
should also be noted that, when setting annual objectives, the Committee
is keen to avoid any risk of duplicating the reward of achievement against
the same quantitative measures of performance which are targeted
under the Company’s Deferred Executive Incentive Plan (DEIP) which is
discussed below.

Long-term incentives
The DEIP incentivises long-term performance by delivering deferred share
awards against a balanced scorecard of performance metrics which drive
the achievement of long-term shareholder value. 80% of this scorecard
is composed of the four quantitative KPIs which we use to measure
progress against our key business priorities as discussed on page 26 and
27. The remaining 20% relates to the development of management talent
and business culture and its achievement is assessed by the Committee.
The Board believes that together the DEIP’s quantitative metrics create
a very broad and stretching incentive framework and that maintaining a
high level of achievement against each individual metric consistently over
the three-year performance period represents a considerable challenge.

Downward discretion
An important point to note is that, once the percentage of bonus earned
under the DEIP metrics is established, the Committee then considers
and has full discretion to decide, within the shareholder approved limits,
the multiple of salary to which that percentage should be applied. It
should be stressed that this discretion is downward only i.e. the multiple
determined cannot exceed the maximum 525% of salary approved
by shareholders at the 2015 AGM. In considering this multiple, the
Committee takes account of any performance issues not reflected in the
DEIP metrics and any other relevant factors such as overall corporate
performance, shareholder return and experience, internal relativities and
the current public and private fund management competitor landscape.

The Committee considers that this structure is superior to the more
traditional approach where a fixed amount is awarded and then adjusted
only according to the proportion determined by the performance criteria.
The Man structure allows the proportion to be adjusted downwards not
only in accordance with the specified performance criteria but also with
the Committee’s overall evaluation of performance taking into account
any matter which the Committee considers appropriate.

In the case of the annual bonus determined under the short-term
incentives, the Committee also only has discretion to make downward
adjustments below the maximum multiple approved in the remuneration
policy.

Phillip Colebatch, Remuneration
Committee Chairman

Dear Shareholder

I am pleased to present our Directors’ Remuneration report for 2015
which we will be submitting to shareholders for approval at our 2016
Annual General Meeting.

2015 remuneration policy – increase in incentive limits
At the 2015 AGM we obtained shareholder approval for an adjustment
to the executive incentive limits within our remuneration policy in order
to increase the range of opportunity available to the Remuneration
Committee (the ‘Committee’). We consulted widely with our major
shareholders and with shareholder representative bodies before making
this change and reduced the quantum of the initially contemplated
increase in the limits in response to their feedback. The structure of our
incentives in terms of annual cash bonus and long-term deferred shares
was left unchanged, as were the quantitative metrics applicable to the
determination of the deferred share element. The purpose of the change
was to provide the flexibility required to recognise and reward, if and
when appropriate, any future strong levels of executive performance.
Without this flexibility, the Board was concerned that it might not be able
to award compensation which was commensurate with any such higher
performance and was competitive in the market place within which the
Company operates. It will continue to apply the same challenge and
rigour in its assessment of executive performance and reward as it has
demonstrated in the past.

The remuneration policy approved at the 2015 AGM is set out on pages
82 to 87 for easy reference. This provides the context for the award
decisions made by the Committee in respect of executive performance
during 2015 which are discussed later in this report. As a reminder, and
for shareholders who are new to the Company, a summary of the main
features of our executive incentive structures, as approved at the 2015
AGM, is set out as follows.

64 Man Group plc Annual Report 2015

Shareholder alignment
The value of the DEIP award determined by the Committee is deferred
into shares which will only vest, subject to the director remaining with
the Company, some three to five years later. The ultimate value of the
award to the director at the time of eventual vesting will be aligned with
shareholder return and experience in the intervening period. The structure
of the DEIP thus creates a long-term performance and holding time
horizon of six to eight years in line with Investment Association principles
and institutional shareholder expectations. In addition, the balance of
our short-term and long-term incentives means that executive reward is
very much weighted, in terms of opportunity, towards long-term deferred
share value.

Malus and clawback
The structure and quantum of opportunity provided by the DEIP have
the potential to create a very substantial level of deferred and unvested
remuneration which is subject to malus for misstatement or gross
misconduct under the existing DEIP provisions. For example, an annual
award of 50% of the DEIP maximum on average would lead to a value of
10.5 times salary being at risk and subject to malus at any given time.

During the year, the Committee considered how the potential for
clawback of annual bonus awards and vested DEIP deferred awards
might most effectively and equitably be introduced into our remuneration
framework.

Malus and clawback need to be considered together as it is their
combination which establishes the scope and extent of the remedies
available to the Committee in the event that previous compensation
awards appear unjustified in light of later information. Because of the
structure of Man’s DEIP, as illustrated above, the malus provisions in
Man’s plan already provide very significant potential for adjustment
of past awards. Nevertheless, the Committee could envisage highly
unlikely and extreme circumstances where a further reduction in past
compensation might be appropriate and has thus introduced a clawback
provision against previously vested DEIP and cash bonuses. This
provision could be operated in the event of Gross Misconduct as defined
in the rules of the DEIP and would allow clawback of DEIP bonuses which
had vested or cash bonuses that had been awarded at any time following
the event of Gross Misconduct and within the period of three years
ending with the date of the Committee’s determination of the clawback.

Gross Misconduct includes circumstances where the director is
convicted of a financial crime relating to the business, is prohibited as
a result of a criminal offence from serving as a director of a company
in the UK or US, or is banned or suspended by the UK or US regulator
from operating within the business in the UK or US. In considering the
operation of malus and clawback, it is likely that the Committee would
look first to reduce, to zero if appropriate, the current year’s incentive
compensation. In the event that the Committee considered that this was
inadequate, the Committee would then look to the malus provisions and,
finally, to the clawback provisions.

Shareholder engagement
Although the majority of our shareholders voted in favour of our
remuneration policy and Remuneration report at the 2015 AGM, a
significant percentage did not. Full details of the voting outcomes are
given in Table R1 on page 70. Those shareholders who voted against
our policy did so mainly on the basis of the increase in the incentive
limits available to the Committee to reward our executives. Some cited
the absence of clawback provisions as an issue. Concerns about our
Remuneration report related mainly to the annual bonus awards and the
increase in base salary for our CFO, Jonathan Sorrell.

In response to this feedback and as part of our ongoing engagement
programme, we held meetings with shareholder representative bodies
towards the end of 2015 to explore their views and further explain our
thinking. In discussing our remuneration policy, we emphasised that the
increase in the incentive limits should be seen only as an enabler for the
award of higher compensation should the Committee consider that the
level of performance warranted its use. Shareholders will continue to have
the opportunity to judge and express their views on the Committee’s
application of those limits in their vote on the Remuneration report each
year. We pointed out that even with the increase in incentive limits, the
combined short and long-term opportunity available to our executives
in terms of multiple of salary remains below the median offered by the
Company’s UK and US listed peer group. We also noted that incentives
for private market managers and many US listed asset managers, against
which the Company regularly competes for talent, are uncapped.

As is evident from the details later in this Remuneration report, the
directors concluded that they would not utilise any of the additional
flexibility to award higher multiples of salary in the 2015 compensation
decisions.

During our discussions with shareholder representative bodies, it was
clear that there was some interest in understanding the peer groups
that Man considers potentially relevant to compensation matters. Peer
groups and benchmarking are just two of the inputs into the Committee’s
compensation discussions as Man seeks talent in a competitive
market and it is important for the Committee to understand what Man’s
competitors may be offering in their own recruiting. It would not be in
shareholders’ interests, for example, to lose an executive director or any
other valued member of staff for compensation reasons only to find that it
was necessary to pay considerably more in order to recruit a replacement.
The details of relevant peer groups are set out in section 2.6 on page 69,
but in summary, we consider three such groups: listed asset managers
and related businesses in the UK; listed asset managers and related
businesses in the US; and the private hedge fund industry.

Review of performance for 2015
The Committee believes that the executive team has made good
progress during the year in pursuing the Company’s objectives and
building for the future. It has successfully integrated the Numeric,
Silvermine and NewSmith acquisitions and the Merrill Lynch assets.
Management talent acquired with these businesses has been moved
into key Group roles and a number of new senior portfolio managers
have been hired to run GLG strategies targeted for growth. Infrastructure
updates and operational changes have delivered significant efficiency
benefits and further strengthened the internal control environment across
many areas of the firm.

Fund performance has been mixed with AHL’s trend following strategies
buffeted by market volatility driven by macro-economic trends and central
bank intervention. Numeric continues to deliver strong performance and
promising flows. Some GLG strategies have done better than others,
but overall GLG performance is up on the previous year. FRM has been
boosted by strong flows from North American institutional mandates.
Investment performance and fund flows are two of the criteria used in
determining performance under the DEIP.

The outturn for the year is summarised in the ‘Highlights’ section on page
8. The remuneration we have awarded for 2015, as discussed in this
report, takes account of both the financial achievement for the year and
the steps that have been taken to build the basis for stable and diversified
future growth.

Man Group plc Annual Report 2015 65

CORPORATE GOVERNANCE
D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T C O N T I N U E D
2 . D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T 2 0 1 5

Long-term DEIP awards
Tables R5 and 6 on pages 73 and 74 set out: (a) the arithmetic calculation
of the executive directors’ achievement against the quantitative KPIs
which account for 80% of their potential deferred bonus awards; and (b)
the Committee’s assessment of their achievement against the remaining
20% attributable to culture and talent issues. Last year was also the first
year in which the transition to the three-year performance period was
complete with awards in 2015 being based upon the performance for
2013, 2014 and 2015. All future years of the DEIP’s operation will measure
performance over three years.

In the three-year period from 2013 to 2015, the senior management team
led by Man’s two executive directors has made significant progress in
restructuring the organisation, replacing staff where needed, recruiting
new talent and developing a culture appropriate for Man’s future. Since
this is the first full three-year cycle, we have set out on page 74 a more
detailed summary of the progress made in those areas over that three-
year period.

The combination of the quantitative and qualitative performance criteria
resulted in a performance achievement of 47.5%. Having arrived at this
percentage achievement, the Committee has full discretion to apply this
percentage to any multiple of award up to the maximum allowed by the
remuneration policy. At last year’s AGM shareholders approved a change
in the maximum limit applicable to the DEIP for 2015 from 350% of salary
up to 408% in respect of 2015 achievement. However, the Committee’s
evaluation was that it would not use the increased flexibility approved
by shareholders; for 2015 the Committee applied the percentage
performance achievement to the same multiple of salary, namely 350%,
as was used for achievement in 2014.

Committee agenda for 2016
Each year, the Committee reviews feedback received from shareholders
and the structure of both short and long-term incentives in light of the
changing market place and Man’s evolving strategy and development.
These items will again be an important part of the 2016 agenda.

Phillip Colebatch
Chairman of the Remuneration Committee

Executive reward decisions
Tables R3 to R7 on pages 71 to 74 set out the reward decisions which the
Committee has made in respect of the executive directors’ achievement
against their individual annual objectives during 2015 and the balanced
scorecard of quantitative metrics and qualitative judgement under the DEIP.

Executive compensation is a key element of Man’s business model and,
as such, final judgement is exercised at a meeting of the full Board. In
applying its judgement, the Board considers all aspects of the proposed
compensation of the executive directors and all members of the senior
management team. This includes an overall view on Man’s business
performance and positioning for the future, the environment in which that
performance was achieved, internal relativities, retention issues and, with
the help of our remuneration consultants, consideration of compensation
at selected peers and competitors, as detailed elsewhere in this report.
The comparison with both the UK and US public peer groups has shown
that the total compensation of our executive directors remains at the low
end of both CEO and CFO remuneration.

Annual bonus awards
Manny Roman
Manny’s achievements against the objectives set by the Board at the
beginning of the year are set out in detail in Table R3 on page 71. Manny
met all his short-term objectives and overall Man’s performance in 2015
was solid. Having considered all other relevant factors including the
difficult market conditions in 2015 and the drivers of the 2014 results, the
Committee did not feel it appropriate to use any of the increased multiple
approved by shareholders in the 2015 AGM and awarded Manny a bonus
of 250% of salary, which is 83.3% of the maximum available award.

Salary review
Manny’s salary has not changed since he joined the firm over five years
ago. As evidenced by Man’s relative TSR, since Manny was appointed
CEO three years ago the Company has performed well and the
management team he has led has transformed the business. A review
by the Committee shows that Manny’s total compensation is one of the
lowest both in the peer groups generally and, importantly, relative to peer
performance. Whilst Manny’s base salary is above that of a number of
CEOs in the peer groups, he is also already a very significant shareholder
in the Company. Accordingly, the Committee concluded that the most
effective way to recognise Manny’s low relative total compensation in
relation to performance and his very significant personal contribution was
to award Manny a 10% salary increase effective 1 January 2016.

Jonathan Sorrell
Jonathan’s objectives and the details of his achievements are set out in
Table R4 on page 72. Jonathan achieved all objectives set for him at the
beginning of the year. Our overall conclusion, supported by shareholder
feedback, is that Jonathan had a further excellent year as CFO.
Nevertheless, the Committee did not feel it to be appropriate to award
an annual bonus of the maximum multiple and awarded him a bonus of
250% of salary, 83.3% of the maximum available. The award of the same
percentage of maximum as the CEO reflects a similar strong level of
individual performance and their work together as a team in driving
the business.

66 Man Group plc Annual Report 2015

Directors’ remuneration report contents

R E M U N E R ATIO N CO M M IT TE E

1. Chairman’s annual statement

2. Directors’ remuneration report 2015

Remuneration Committee

2.1 Membership and attendance

2.2

Independent advisers

2.3 Meeting schedule

2.4 Committee activities during 2015 and the early

part of 2016

2.5 2015 Committee evaluation

2.6 Benchmarking and peer group

2.7 Shareholder voting and engagement

Remuneration outcomes in 2015

2.8 Single total figure of remuneration for

executive directors

2.9 Short-term annual bonus in respect of

2015 performance

2.10 Long-term deferred bonus in respect of

2015 performance under the Deferred Executive
Incentive Plan

2.11 Single total figure of remuneration for

non-executive directors

2.12 Percentage change in CEO remuneration

2.13 Relative importance of spend on pay

2.14 Review of past performance

2.15 Payments for loss of office and payments

to past directors (audited)

2.16 Directors’ interests

2.17 Retirement benefits

Implementation of directors’ remuneration policy
for 2016

2.18 Base salary

2.19 Short-term annual cash bonus for 2016

2.20 Long-term deferred bonus for 2016 under the

Deferred Executive Incentive Plan

2.21 Non-executive director remuneration policy for 2016

3. Directors’ remuneration policy

3.1. Executive directors’ remuneration policy

3.2 Performance measures selection and approach

to target-setting

3.3 Differences between executive directors’ and

employees’ remuneration

3.4 Shareholding guidelines

3.5 Non-executive directors’ remuneration policy

3.6

Illustrative pay for performance scenarios

3.7 Approach to recruitment remuneration

3.8 Non-executive directors

3.9 Service contracts and exit payment policy

3.10 External appointments

3.11 Consideration of conditions elsewhere in the Company

3.12 Consideration of shareholder views

The Committee’s role is to:
– determine and agree with the Board the Company’s remuneration
philosophy and the principles of its remuneration policy, ensuring
that these are aligned with business strategy, objectives and values,
comply with all regulatory requirements and promote long-term
shareholder interests;

– recommend to the Board the specific remuneration policy for

the executive directors, for approval by shareholders, and make
remuneration decisions within that approved policy;

– recommend to the Board for approval the total annual compensation
for individual executive directors based on their achievement against
objectives set by the Committee and Board at the start of the year;

– recommend to the Board the remuneration of the Chairman; and
– approve the total annual compensation for Executive Committee

members and Remuneration Code staff.

Full terms of reference for the Committee, which are reviewed on an
annual basis, are available on the Company’s website.

2.1 Membership and attendance
The Committee members at the date of this report are Phillip Colebatch
(Chairman), Jon Aisbitt, Richard Berliand, Ian Livingston and Nina
Shapiro. Ian Livingston and Richard Berliand were appointed members
of the Committee on their appointment to the Board with effect from
1 January and 19 January 2016 respectively. All the other Committee
members held office throughout 2015.

John Cryan was appointed a member of the Committee on 15 January
2015 and became Chairman of the Committee in succession to Phillip
Colebatch with effect from the end of the 2015 AGM on 8 May. He stood
down as a member and Chairman of the Committee with effect from
1 July following his appointment as co-CEO of Deutsche Bank. Phillip
Colebatch resumed the Chairmanship of the Committee from that date.
It is proposed that, subject to his reappointment by shareholders at the
2016 AGM, Richard Berliand will succeed Phillip Colebatch as Committee
Chairman on the conclusion of that meeting.

Committee meetings are regularly attended by Manny Roman and
Jonathan Sorrell. The Committee is supported by members of the HR,
Compliance and Executive Incentive Plans teams who attend meetings
when required to provide information and advice on remuneration,
regulatory and executive incentive plan matters. The Company Secretary
acts as Secretary to the Committee and supports the shareholder
engagement programme.

At the end of each meeting there is an opportunity for private discussion
between Committee members without the presence of executive directors
and management. No Committee member or attendee is present when
matters relating to his or her own remuneration are discussed.

2.2 Independent advisers
Kepler, a brand of Mercer (Kepler), provide the Committee with advice
on a range of remuneration matters including the benchmarking of
directors’ compensation in the asset management sector, trends in
market practice and regulatory disclosures. Neither Kepler nor any of
the Mercer group of companies of which Kepler are a part provide any
other services to the Company. Kepler have confirmed that they have
no other business or personal relationship with any employee of the
Company or member of the Committee. The Committee is satisfied on
this basis that Kepler are able to serve as an objective and independent
remuneration adviser. The total fees paid to Kepler in 2015 were £61,518.
The Committee also received legal advice from Herbert Smith Freehills
LLP on compliance with legislation relating to executive incentive plans
and other remuneration matters.

Man Group plc Annual Report 2015 67

CORPORATE GOVERNANCE

D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T C O N T I N U E D

2.3 Meeting schedule
The Committee met six times during 2015 with attendance by members
as indicated below. In addition, certain urgent proposals relating to
compensation for new hires were circulated and agreed by email prior to
formal ratification at subsequent meetings.

Shareholder engagement and reporting
– Reviewed shareholder voting and feedback on the 2015 AGM

remuneration policy and report resolutions.

– Planned shareholder engagement programme and discussed

feedback received.

Phillip Colebatch

Jon Aisbitt

John Cryan1

Nina Shapiro

Meetings attended

6/6

2/2

6/6

Note:
1 John Cryan was a member of the Committee between 15 January and 30 June 2015.

He attended all Committee meetings held during that period.

2.4 Committee activities during 2015 and the early part of 2016
The summary below sets out the main issues considered and decisions
made by the Committee in the period following the publication of the
2014 Remuneration report up to the current date.

Executive director compensation
– Assessed CEO and CFO performance against their 2015 short-term
objectives and recommended annual cash bonus proposals to the
Board.

– Reviewed the percentage of long-term deferred share bonus earned

under the quantitative metrics of the DEIP and determined the
percentage of bonus earned by the CEO and CFO under the Culture
and Talent element.

– Discussed and determined the salary multiple to be applied to the total

bonus earned under the DEIP for recommendation to the Board.
– To provide the business context for all the above reward decisions,

reviewed the available benchmarking for the CEO and CFO roles within
UK listed asset managers and such other data as could be obtained
for the private manager and US hedge fund market (please see section
2.6 for further details).

Executive compensation below Board level
– Reviewed and challenged the 2015 bonus pool proposed by

management in relation to the Company’s performance for the year
prior to recommendation to the Board.

– Approved bonus deferral policies for different groups of staff including

the introduction of deferral for Numeric.

– Approved total compensation proposals for Executive Committee
members, taking account of the CEO’s appraisal of their individual
performance for 2015 and their adherence to the Company’s
business values.

– Approved the total compensation for BIPRU and AIFMD Remuneration

Code and senior control staff.

– Approved the total compensation for staff earning over $1 million,

taking account of the CEO’s appraisal of their performance for 2015
and reports from the Risk and Compliance functions on any related
risk issues arising during the year.

– Approved total guaranteed compensation above $1 million proposed

for new senior portfolio manager hires.

– Reviewed 2015 Directors’ Remuneration report taking account of best
practice recommendations, institutional shareholder guidelines and
specific investor feedback.

Clawback
– Introduced clawback provisions as described more fully on page 65.

Financial regulation and governance
– Reviewed ongoing regulatory developments on remuneration and their

implications for the Company’s business.

– Reviewed the Company’s updated remuneration policy and FCA
Remuneration Policy Statement in line with BIPRU and AIFMD
requirements.

– Approved updates to the list of Remuneration Code staff and minor

changes to the operation of deferred share and fund product
incentive plans.

– Approved the introduction of deferred cash plans for use in connection

with buy-out awards for new hires and approved the grant of
buy-out awards for new senior portfolio managers in line with FCA
requirements.

2.5 2015 Committee evaluation
Following a mid-year review of the priority actions identified in the 2014
evaluation, at the year end the Committee undertook an evaluation
facilitated by the Company Secretary of its operation and effectiveness
during 2015. This asked broad questions about what the Committee
could do better, its priorities for 2016, its strengths and what additional
expertise, input and resource it required.

In the evaluation feedback, the Committee expressed appreciation of
Phillip Colebatch resuming the Chairmanship of the Committee following
John Cryan having to step down at the end of June. It identified the
induction of and smooth transition to a new Committee Chairman as a
key priority and agreed the following specific areas of focus for 2016:

– continue the Committee’s engagement with shareholders on the

Company’s executive remuneration strategy;

– review the effectiveness of the DEIP;
– deliver a remuneration framework for executive directors which will

continue to support the reward and retention of talent;

– ongoing consideration of the impact of changing regulatory

requirements;

– further focus on incentive structures for different groups of executives

below Board level; and

– review the advice and market intelligence available to the Committee.

68 Man Group plc Annual Report 2015

2.6 Benchmarking and peer groups
Benchmarking is one of a number of factors considered by the
Committee in its deliberations on remuneration as it is important that
the Committee understands the level of remuneration paid by Man’s
competitors for similar positions and which they may be offering in the
market place.

Man variously uses three separate peer groups as detailed in the tables
below. These are:
1. a group of asset managers and related businesses listed on the

London Stock Exchange;

2. a group of similar businesses listed on the New York Stock Exchange
with a market cap of between one quarter and four times that of Man;
and

3. businesses within the privately owned hedge fund industry for which
non-public information regarding remuneration is obtained by Man in
the normal course of business discussions in that industry.

All three of these sources are relevant.

Many of Man’s senior staff are geographically mobile, particularly
between London and New York and an explicit consideration of
remuneration levels in both of these geographies is relevant. Man is
one of the few listed companies anywhere in the world that operates
in the hedge fund industry. The majority of businesses in this industry
are privately owned and systematic remuneration data is not publicly
available. Nevertheless, Man competes for talent against these
businesses and staff move between Man and these private companies.

Man operates globally – in the geographic footprint of its operations,
in its clients and in the asset classes which it produces. It also
manufactures and distributes hedge funds, long only funds and
quantitative funds. None of the companies referred to below have these
same characteristics and, although some of them are larger than Man,
the Committee believes that, while they are broadly comparable, Man
tends to be more diverse geographically and have a wider range of fund
strategies. However, these groups share some of Man’s characteristics
and, in some cases, information regarding the remuneration of directors
is publicly available.

The privately owned hedge fund market is made up of a large number
of participants, some of them small and single product and others
very large. As noted earlier, little information is available publicly on
the compensation quantum and structures in these businesses. The
senior management of those few hedge fund companies which are
publicly listed are generally the founders of the original private company
who retained very significant shareholdings at the time of listing. Man
endeavours to make up this gap in publicly available data by reviewing
information it receives in the course of industry dialogue from a group of
privately owned peers, some of whom are outlined in the table below.
Man has also obtained direct information about remuneration in those
privately held companies that Man has acquired.

Interpreting peer group data and benchmarking involves a number of
complexities and the Committee looks at this data to provide important
market context for its decisions.

U K L I S T E D P E E R G R O U P

U S L I S T E D P E E R G R O U P

P R I V A T E M A N A G E R
P E E R G R O U P

– M&G
– Schroders
– 3i
– Investec Asset Management
– Henderson
– ICAP
– Close Brothers
– Jupiter
– Ashmore
– ICG
– Tullett Prebon

– KKR
– Affiliated Managers
– Oaktree Capital
– Carlyle
– Legg Mason
– Eaton Vance
– Federated Investors
– Janus Capital
– Waddell & Reed
– Artisan Partners
– Fortress Investment
– Apollo Investment

– AKO
– Arrowgrass
– Bluecrest
– Brevan Howard
– Bridgewater
– Capula
– Cheyne
– Citadel
– Egerton
– Lansdowne Partners
– Winton

Man Group plc Annual Report 2015 69

CORPORATE GOVERNANCE

D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T C O N T I N U E D

2.7 Shareholder voting and engagement
At the AGM held on 8 May 2015, votes cast by proxy and at the meeting in respect of directors’ remuneration were as follows:

Resolution

Votes for

% for

Votes against

% against

Total votes cast

Table R1

Votes withheld
(abstentions)

Approve the directors’ remuneration policy

591,048,110

57.16%

442,929,218

42.84% 1,033,977,328

12,680,269

Approve the annual report on remuneration

668,201,898

65.02%

359,548,263

34.98% 1,027,750,161

18,907,436

Details of the reasons behind the significant percentage of votes cast against these resolutions and actions taken by the Committee in response are
provided in the Chairman’s annual statement on page 65.

R E M U N E R ATIO N OUTCO M E S I N 2 015

2.8 Single total figure of remuneration for executive directors
The table below sets out a single figure for the total remuneration received by each director for the year ended 31 December 2015 and the prior year.

Single total figure of remuneration for executive directors (audited)

Table R2

All figures in USD

Salary

Taxable benefits3

Short-term variable

Long-term variable4

Pension benefits5

Other6

Total

Executive directors

Emmanuel Roman1

Jonathan Sorrell

2015

2014

2015

2014

1,000,000

718,7502

625,000

60,292

56,122

2,553

2,776

2,500,000

1,796,875

1,562,500

1,662,500

1,400,000

1,194,922

875,000

142,538

109,813

89,421

86,695

1,880

1,857

1,880

1,857

5,367,210

5,067,792

3,804,401

3,153,828

Notes:
1 Emmanuel Roman stepped down as a non-executive director of Grupo Prisa SA on 25 March 2015. For 2014, he received fees of €124,500 (€30,000 was awarded as shares) and

for 2015, he received fees of €31,125 (€7,500 was awarded as shares) in respect of this directorship. The figures in Table R2 do not include these fees.

2 Pro-rata requirement based on Jonathan Sorrell’s base salary increase from $625,000 p.a. to $750,000 p.a. with effect from 1 April 2015.
3 Taxable benefits comprise private medical insurance.
4 Long-term variable remuneration is subject to deferral under the Deferred Executive Incentive Plan. Please refer to Tables R5 to R8 for further information.
5 Pension benefits are paid into the Man Group Personal Pension with any contributions exceeding the annual allowance paid as cash on a cost neutral basis to the Company.
6

‘Other’ refers to non-taxable benefits (including life insurance and Group income protection).

70 Man Group plc Annual Report 2015

2.9 Short-term annual bonus in respect of 2015 performance
The short-term annual cash bonus is based on the Committee’s assessment of executive directors’ performance against objectives agreed by the
Board at the beginning of the year. Tables R3 and R4 show the results of this assessment for 2015.

Chief Executive Officer (audited)

Table R3

Assessment category

Objectives

Achievements

Strategy, structure and people

– Strengthen the US footprint through asset

raising.

– Achieved $4.6 billion of sales to North
American clients which is encouraging.

– Review and execute, with appropriate

– NewSmith acquired in April 2015. Reviewed in

scepticism and cost discipline, acquisition
opportunities which complement the existing
business and generate attractive returns.

– Develop, implement and monitor the adoption
of firm-wide business values which promote a
top quality asset management culture.

excess of 100 other potential prospects.

– Business principles successfully embedded

across the firm including within the
recruitment process; adherence to these
is considered when determining year end
compensation.

Performance and sales

– Integrate recent acquisitions and maintain

– Ongoing activity to continue the integration

high quality leadership across the full product
range.

process, both in terms of system
consolidation and movement of acquired
talent into central Group roles. GLG,
FRM and Numeric all performed above
relevant benchmarks; AHL Dimension and
Evolution performed well, up 7.4% and 3.2%
respectively.

– Continue to grow assets under management.

– Achieved net inflows for Q3 and Q4,

generating a small net inflow for the year.
Achieved 6% average net inflows for
alternatives.

Financial health

– Maintain a sharp focus on cost control.

– 2015 costs came in 4% under budget.

Risk, compliance and reputation

External stakeholder engagement

– Simplify control structures by merging Legal
and Compliance while maintaining robust
regulatory control departments, new senior
hires and effective succession planning.

– Pursue effective engagement with the
Regulator (FCA), shareholders and the
marketplace.

Percentage of short-term annual bonus awarded

Percentage of salary applied (maximum 300%)

Actual award as a percentage of maximum opportunity

Quantum of award

– The merger between the Legal and

Compliance functions was completed in
2015, along with the hire of a new Head of
Compliance & Regulatory to bring additional
senior experience to the regulatory function.

– Introductory meeting held with new FCA

Director of Supervision and Authorisations.
Shareholder meetings held after year end
and interim results. Extensive engagement
with global media to build Man’s external
profile and communicate key messages and
updates.

100%

250%

83.3%

$2,500,000

Man Group plc Annual Report 2015 71

CORPORATE GOVERNANCE
D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T C O N T I N U E D

Chief Financial Officer (audited)

Table R4

Assessment category

Objectives

Achievements

Strategy, structure and people

– Integrate operational and technology
infrastructure of acquired businesses.

– Deliver key infrastructure improvements across
the business for efficiency and productivity
gains.

– NewSmith and Merrills were immediately

integrated in terms of infrastructure. Numeric
integration was predominantly completed in
2015 (with final pieces delivered in January
2016) with cost saving target achieved.
– New systems and processes successfully
generated significant efficiency benefits
across the firm, alongside infrastructure
updates and improvements which have been
delivered within initial budget.

– Review and execute, with appropriate

– NewSmith acquired in April 2015. Reviewed in

scepticism and cost discipline, acquisition
opportunities which complement the existing
business and generate attractive returns.
– Identify externally and develop internally a

strong pipeline of hedge fund, long only and
sales talent.

excess of 100 other potential prospects.

– Worked closely with Head of Business

Development to leverage proactively a range
of contacts to bring in high quality investment
talent to hedge fund, long only and
distribution activities. Discussion with a strong
pipeline of talent continues in 2016.

– Pursue firm wide diversity, including gender

– A range of initiatives in support of Man’s

diversity initiatives, to attract a broader
candidate pool.

diversity agenda including partnerships with
SEO and Investment 2020, female focused
events and campus marketing activity,
returner programme and development of
DRIVE (diversity network).

P&L and financial health

– Deliver the 2015 cost budget.

– Maintained strong focus on cost control and

– Restructure the Revolving Credit Facility.

– Manage the new seeding programme within

agreed parameters.

Risk, compliance and reputation

– Devise and implement a new FUM, revenue
and commissions reporting framework to
improve management, financial reporting and
internal control.

– Maintain and enhance the control

environment.

External stakeholder engagement

– Pursue Investor Relations efforts to

communicate the equity story to analysts,
shareholders and potential investors.

Percentage of short-term annual bonus awarded

Percentage of salary applied (maximum 300%)

Actual award as a percentage of maximum opportunity

Quantum of award

costs were 4% under 2015 budget.
– Revolving Credit Facility for $1 billion

implemented.

– Actively managed the seeding programme
through regular reviews of seeding book
positions, performance and Man’s overall
risk position together with forward looking
approach to consider forecast liquidity and
implications for future seeding. 11 new
strategies were seeded, 4 seeding positions
were fully exited leaving the seeding book
P&L flat for the year.

– New system and processes implemented

which improve reporting of FUM, revenue and
commissions while enhancing the internal
control environment by automating all Group
sales calculations on a single platform.
– Regular monitoring/review of controls and

processes has enabled the development of a
low risk, robust control environment in which
risks are identified and effectively mitigated.

– Undertook a full programme of meetings
with existing/potential shareholders to
communicate the equity story, Man’s
investment case and the evolution of the
business over the past five years. Excellent
feedback received.

100%

250%

83.3%

$1,796,875

72 Man Group plc Annual Report 2015

2.10 Long-term deferred bonus in respect of 2013 to 2015 performance under the Deferred Executive Incentive Plan (‘DEIP’)
The long-term deferred bonus plan awards are determined by an assessment against a balanced scorecard of performance criteria for each executive
director, with 80% determined by financial criteria and 20% non-financial criteria. Tables R5 to R7 show the result of this assessment for the awards
to be granted in 2016. For the financial metrics, performance is measured against Man’s financial KPIs for each of the three preceding reporting years
(2013, 2014 and 2015) and then averaged. Additional information on Man’s financial KPIs is set out on page 27. The non-financial metric is assessed
over the three-year performance period.

Long-term deferred bonus – assessment of achievement under financial KPIs (audited)

Performance targets1

Actual performance

Measure

Threshold

Maximum

2013

2014

2015

1. Investment
performance

Net performance >
benchmark for 3/42
investment managers

Achieved 1
out of 3

Achieved 3
out of 4

Average
over 3 year
performance
period

Achieved 3
out of 4
over the
performance
period

Percentage
of target
achieved
over 3 year
performance
period

Weighting

Table R5

Bonus
outcome,
after
weighting

75.0%

25%

18.8%

2. Net flows

3. Adjusted
management fee
EBITDA margin

25%

10%

40%

-6.3%

6.1%

0.4%

0.1%

0.7%

25%

0.2%

36.0%

30.3%

27.2%

31.2%

41.1%

15%

6.2%

4. Adjusted
management
fee EPS growth

RPI + 0%

RPI + 20%

-16.8%

26.2%

-0.2%

3.1%

15.3%

15%

2.3%

Percentage achieved under financial KPIs (maximum of 80%)

27.5%

Notes:
1 To the extent the actual performance is between the threshold and maximum targets for net flows, adjusted management fee EBITDA margin and adjusted management fee EPS

growth KPIs, the criteria is met proportionally.

2 Three investment managers (AHL, GLG and FRM) were used to assess investment performance in 2013 and 2014. Numeric was added as a fourth investment manager in 2015.

Comments on 2015 performance against financial KPIs:

1. Investment performance
In 2015, GLG, FRM and
Numeric all achieved positive
performance which was in
excess of their respective
benchmarks. AHL did not
meet its target. Over the full
performance period, AHL, GLG
and Numeric have met their
targets, whilst FRM is slightly
below its target. This means
that three out of the four targets
have been met over the full
performance period.

2. Net flows
In 2015, a small net inflow was
recorded. Inflows in quant
products and fund of funds
were partly offset by outflows
in discretionary alternative and
long only products.

3. Adjusted management
fee EBITDA margin
In 2015, the adjusted
management fee EBITDA
margin was within the target
range, albeit lower than in
previous years, reflecting the
continued mix shift from higher
margin retail assets to lower
margin institutional assets and
a general trend of new sales
being achieved at lower gross
margins than in previous years.

4. Adjusted management
fee EPS growth
In 2015, the adjusted
management fee EPS growth
in excess of RPI was marginally
negative and significantly
lower than in 2014, reflecting
lower management fee gross
margins.

Man Group plc Annual Report 2015 73

CORPORATE GOVERNANCE
D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T C O N T I N U E D

Long-term deferred bonus – assessment of achievement under non-financial KPI (audited)

Table R6

Culture and Talent
As is well known, the ramifications of the global financial crisis which began in 2008 were widespread and deep. The crisis had a significant impact on
the hedge fund industry, including Man. Man responded to this by analysing its strategy, its cost base, its product platform, its geographic footprint
and its people and it was clear to the Board that material changes were required across all these dimensions. A new CEO and CFO were appointed
in 2013 and 2012 respectively and charged with clearly defining the strategic plan, its implications across product, geography, senior management,
talent and culture and with implementing the necessary changes. Man has just completed the first three full years, 2013-15 inclusive, in the tenure of
that new CEO and CFO.

Over that three year period, Man’s two executive directors, working as a team, have:
1. Redefined Man’s desired product platform.
2. Where necessary, changed elements of the existing Man product platforms, including changes to the leadership of those platforms.
3. Instituted a strong culture of individual ethics and risk management in which control functions are empowered and respected.
4. Progressively changed the organisational structure to align with the strategic direction.
5. Analysed Man’s geographic footprint and changed where necessary the products, services and management of Man’s overseas offices.
6. Built a new senior management team from both internal talent and with external hires.
7. Made a number of key hires into leadership positions on product platforms, sales organisations and general management.
8. Redefined Man’s culture, integrated the acquired organisations and newly hired talent and promulgated that desired culture in to these new

arrivals to Man.

9. Put significant new momentum behind developing key staff, both at senior levels as potential successors to the senior management team and at

entry level to provide a talent pipeline for the future.

10. Increased diversity through a number of initiatives including new recruitment practices, apprenticeships, support networks and collaboration with

external organisations who source diverse talent.

Culture, talent and diversity are continuing tasks. Over the last three years, Man’s two executive directors and the senior management team have built
a very solid foundation on which to continue building these key elements of the organisation.

Percentage achieved under non-financial KPI (maximum of 20%)

20%

Long-term deferred bonus – aggregate achievement under financial and non-financial KPIs (audited)

Table R7

Financial KPIs

Non-financial KPI

Total percentage achieved

Percentage of salary applied (maximum 408%1)

Actual award as a percentage of maximum opportunity

27.5%

20.0%

47.5%

350%

40.7%

Note:
1

To ensure that the increase in maximum opportunity approved by shareholders at the 2015 AGM does not apply retrospectively, the maximum opportunity will increase
progressively until reaching 525% of salary for awards made in respect of performance in the period 2015 to 2017. The awards detailed above reflect one year of performance
(2015) under the new limit (525%) and two years of performance (2013 and 2014) under the old limit (350%). The 408% maximum opportunity is a weighted blend (one third of the
new limit and two thirds of the old limit) for that period. This maximum opportunity has not been used in respect of the bonus awarded in 2015.

Quantum of award:

Emmanuel Roman

Jonathan Sorrell

Scheme interests to be awarded under the Deferred Executive Incentive Plan (‘DEIP’ in relation to 2015)
(audited)

$1,662,500

$1,194,922

Table R8

Executive director

Emmanuel Roman

Jonathan Sorrell

Award (% of
maximum
opportunity1)

Award value2

(USD)

End of holding
period date

40.7% $1,662,500

40.7% $1,194,922

Mar-21

Notes:
1 Please see Note 1 in Table R7 for further details of the maximum opportunity for 2015.
2 The awards to be made in 2016 in respect of the financial year ended 31 December 2015 are calculated according to performance against a balanced scorecard, as shown in

Tables R5 and R6. The monetary value of these awards will be converted into a number of shares using the USD/GBP rates and mid-market share price quoted on the award date.
The awards will be granted as conditional awards of shares and will vest three to five years after grant, subject to the DEIP rules. Details of awards made under the DEIP in relation
to performance in 2013 and 2014 can be found in Table R16.

74 Man Group plc Annual Report 2015

2.11 Single total figure of remuneration for non-executive directors
The table below sets out a single figure for the total remuneration received by each non-executive director for the year ended 31 December 2015 and
the prior year.

Single total figure of remuneration for non-executive directors (audited)

Table R9

All figures in GBP

Jon Aisbitt

Phillip Colebatch1

John Cryan1

Andrew Horton

Matthew Lester

Dev Sanyal

Nina Shapiro

Total fees

2015

2014

450,000

112,789

115,000

69,423

80,000

95,000

80,000

75,000

80,000

95,000

80,000

75,000

Note:
1 John Cryan was appointed a member of the Board and Remuneration Committee on 15 January 2015 and became Chairman of the Remuneration Committee in succession

to Phillip Colebatch with effect from the end of the 2015 AGM on 8 May. He stood down as a member and Chairman of the Committee with effect from 1 July 2015 following his
appointment as co-CEO of Deutsche Bank. Phillip Colebatch resumed the Chairmanship of the Committee from that date.

2.12 Percentage change in CEO remuneration
The table below sets out the percentage change in remuneration for the CEO and staff.

Percentage change in CEO remuneration

Salary

Taxable benefits

Short-term variable

2015

CEO

2014

Table R10

All Staff

All figures in $’000s

% change

% change1

1,000

2,500

1,000

2,500

(1)

(4)3

Notes:
1 Figures are calculated on a per capita basis.
2 This is the percentage change in US dollar terms which includes an adverse exchange rate movement. If based on the underlying currencies in which staff are paid, the salary per

capita remained unchanged.

3 For staff, short-term variable remuneration includes both variable cash compensation and deferred awards relating to the current year.

2.13 Relative importance of spend on pay
The table below shows the year-on-year change in total employee expenditure compared to the change in shareholder distributions.

Relative importance of spend on pay

Total employee expenditure1

Shareholder distributions2

Table R11

%
change

2014
$m

391

278

2015
$m

462

369

Notes:
1 Remuneration paid to or receivable by all employees (i.e. accounting cost). Refer to Note 7 to the financial statements for further details.
2 Distributions to shareholders (dividends paid of $193 million and repurchase of shares of $176 million in the year).

Man Group plc Annual Report 2015 75

CORPORATE GOVERNANCE
D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T C O N T I N U E D

2.14 Review of past performance
The performance graphs below compare the Company’s total shareholder return performance against the FTSE 350 Financial Services Index. The
graphs cover both the required reporting period (Table R12a) and the three-year period since the current CEO and CFO were appointed (Table R12b).
Man Group operates in the alternative investment management sector and is listed on the FTSE 250 Index on the London Stock Exchange. The FTSE
350 Financial Services Index has been chosen as it is the most appropriate comparator to cover a period when Man has been in both the FTSE 100
and FTSE 250. The majority of Man Group’s direct competitors are unlisted and equivalent information for these firms is not available.

300

250

200

150

100
100 100

9
0
r
a
M

151

121

0
1
r
a
M

178

136

1
1
r
a
M

150

180

1
1
c
e
D

2
1
c
e
D

Table R12a

289

300

263

250

200

150

100
100 100

125

143

4
1
c
e
D

5
1
c
e
D

2
1
c
e
D

236

3
1
c
e
D

Table R12b

256

161

5
1
c
e
D

225

146

4
1
c
e
D

131

113

3
1
c
e
D

Man Group TSR (March 09 – Dec 15)
FTSE 350 Financial Services TSR (March 09 – Dec 15)

Source: Datastream

Man Group TSR (Dec 12 – Dec 15)
FTSE 350 Financial Services TSR (Dec 12 – Dec 15)

Source: Datastream

Historical CEO remuneration

Accounting period ended

CEO single figure

E Roman

($’000s)

Short-term

variable award
(as a percentage
of maximum
opportunity)3

Long-term

variable award
(as a percentage
of maximum
opportunity)4

P Clarke

E Roman

P Clarke

E Roman

P Clarke

31 March
2010

n/a

6,299

n/a

31 March

31 December

20111

n/a

8,173

n/a

20112

n/a

6,437

n/a

31 December
2012

31 December
2013

31 December
2014

31 December
2015

Table R13

n/a

1,048

n/a

3,397

978

70%

17%

5,068

n/a

100%

n/a

40%

n/a

5,367

n/a

83.3%

n/a

40.7%

n/a

Notes:
1 Salary and benefits are for 12 months and bonus for 9 months.
2 Salary and benefits are for 9 months and bonus for 12 months.
3 For the accounting periods ended up to and including 31 December 2012, as there was no cap on the overall maximum bonus awards, the percentage of maximum opportunity is

not shown.

4 Peter Clarke stepped down as CEO with effect from 28 February 2013 and was on garden leave until his retirement on 10 December 2013. Emmanuel Roman became CEO on 28

February 2013.

2.15 Payments for loss of office and payments to past directors (audited)
There were no remuneration payments made for loss of office or remuneration payments made to former executive directors during the year.

Conditional share awards granted under the Deferred Bonus Share and Option Plan (DBSOP) to former directors Peter Clarke and Kevin Hayes,
as reported under Table R19 in the annual report on remuneration for the financial year ended 31 December 2013, vested on 12 March 2015.
Consequently, Peter Clarke received a transfer of 879,683 shares and Kevin Hayes received a transfer of 293,223 shares (which numbers include
shares representing dividend accrual over the vesting period).

During the year, the DBSOP option granted to Peter Clarke in 2011 over 3,629,238 shares and the DBSOP option granted to Kevin Hayes in 2011 over
777,693 shares each lapsed. Consequently, there are no outstanding options or awards held by Kevin Hayes, and only the DBSOP options granted
to Peter Clarke in 2010 and 2012 (as reported under Table R19 in the annual report on remuneration for the financial year ended 31 December 2013)
remain outstanding. As each of these options is now currently exercisable, no further disclosure in respect of these options will be made until such
time as the options are exercised or lapse.

76 Man Group plc Annual Report 2015

2.16 Directors’ interests

Directors’ interests in shares of Man Group plc (audited)

Executive directors

Emmanuel Roman3

Jonathan Sorrell

Non-executive directors

Jon Aisbitt

Phillip Colebatch

John Cryan4

Andrew Horton

Matthew Lester

Dev Sanyal

Nina Shapiro

Table R14

Number of
ordinary
shares1
31 December
20152

Number of
ordinary
shares1
31 December
2014

18,745,969

596,061

544,361

1,681,251

10,000

–

50,000

22,692

67,191

28,258

–

50,000

22,692

64,287

28,258

Notes:
1 All of the above interests are beneficial.
2 There has been no change in the directors’ interests in the ordinary shares of Man Group plc from 31 December 2015 up to 23 February 2016, being the latest practicable date

prior to the publication of this report.

3 Emmanuel Roman also holds 50,000 Deferred Sterling shares of £1 each. These shares are held to satisfy a requirement of the Companies Act 2006 and carry no voting rights or

rights to distributions.

4 John Cryan was appointed to the Board as a non-executive director on 15 January 2015.

The market price of the Company’s shares at the end of 31 December 2015 was 175.5 pence. The highest and lowest daily closing share prices
during the 12 month financial period were 217.6 pence and 139.8 pence respectively.

Executive directors’ shareholdings measured against their respective shareholding requirement as at
31 December 2015

Table R15

Executive directors

Emmanuel Roman

Jonathan Sorrell

Shares owned

shareholding2

outright1

(USD)

Value of

Salary
(USD)

Shareholding
requirement as
a % of salary

Current
shareholding as
a % of salary

Requirement
met?

18,745,969 48,480,225

1,000,000

596,061

1,541,514

718,7503

200%

100%

4848%

214%

Yes

Notes:
1 Details of unvested share awards can be found in Tables R16 to R19.
2 Shareholdings valued at 31 December 2015 share price of £1.755 and an exchange rate of £1=$1.4736.
3 Pro-rata requirement based on Jonathan Sorrell’s salary increase from $625,000 p.a. to $750,000 p.a. with effect from 1 April 2015.

Man Group plc Annual Report 2015 77

CORPORATE GOVERNANCE

D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T C O N T I N U E D

2.16 Directors’ interests continued
Directors’ interests in shares and options under Man Group long-term incentives

Conditional share awards under the Deferred Executive Incentive Plan (DEIP)1 – subject to service
conditions (audited)

Table R16

Executive director

Emmanuel Roman

Jonathan Sorrell

Date of
grant

1 January

2015

Granted during
year2

Dividends
accruing3

31 December

2015

Mar-144

369,692

—

16,974

386,666

Mar-155

—

484,902

Mar-144

231,056

—

Mar-155

—

303,063

22,263

10,608

13,914

507,165

241,664

316,977

Notes:
1 The Company’s obligations for the conditional awards granted under the DEIP are hedged by the Employee Trust.
2 The award values included in Table R6 in the Directors’ remuneration report for the financial year ended 31 December 2014 were converted into the number of shares shown

above using the GBP/USD rate of 1.4944 and a share price of £1.932, being the mid-market share price on 11 March 2015. These awards attract dividend accruals. Further details
of the Deferred Executive Incentive Plan can be found in section 2.10 of this report.

3 On 15 May 2015 dividend accruals of 18,993 and 11,871 shares were added to Emmanuel Roman and Jonathan Sorrell’s awards respectively based on a Sterling dividend of 3.95
pence. On 2 September 2015, dividend accruals of 20,244 and 12,651 shares were added to Emmanuel Roman and Jonathan Sorrell’s awards respectively based on a Sterling
dividend of 3.47 pence.

4 Award vests in three equal instalments in March 2017, March 2018 and March 2019.
5 Award vests in three equal instalments in March 2018, March 2019 and March 2020.

Conditional share award under the Deferred Bonus Share and Option Plan (DBSOP)1 – subject to service
conditions (audited)

Table R17

Executive director

Jonathan Sorrell

Date of
grant

1 January
2015

Granted during
year

Dividends
accruing2

31 December
2015

Mar-13

1,160,690

–

53,297

1,213,987

Notes:
1 The Company’s obligations for conditional awards granted under the DBSOP are hedged by the Employee Trust. These awards attract dividend accruals.
2 On 15 May 2015 dividend accruals of 25,800 shares were added to Jonathan Sorrell’s awards based on a Sterling dividend of 3.95 pence. On 2 September 2015, dividend

accruals of 27,497 shares were added based on a Sterling dividend of 3.47 pence.

Options granted under the Man Group Deferred Share and Fund Product Plans – subject to service conditions (audited)

Table R18

Executive director

Jonathan Sorrell1

Deferred Share Plan (DSP)

Fund Product Plan (FPP)2

Date of
grant

1 January

2015

Exercised
during period

Mar-12

97,738

1,063

97,738

1,063

31 December

Earliest exercise

2015

–

date

n/a

Latest
exercise

date

n/a

Notes:
1 Jonathan Sorrell was granted nil-cost options under the above Plans prior to his appointment as a director.
2 Award granted over a number of fund units in Man GLG Multi-Strategy UCITS product.

Options granted under the Man Group Sharesave Scheme (audited)

Table R19

Executive director

Jonathan Sorrell

Number of options

Date of
grant

1 January

2015

Granted during
year

31 December
2015

Option price

Earliest exercise
date

Latest exercise
date

Aug-12

Sept-14

23,076

16,833

–

23,076

16,833

65.0p

90.0p

Oct-17

Oct-19

Mar-18

Mar-20

2.17 Retirement benefits
Emmanuel Roman and Jonathan Sorrell are not eligible for any defined benefits under the Man Group plc Pension Plan.

78 Man Group plc Annual Report 2015

I M PLE M E NTATIO N O F D I R ECTO RS’ R E M U N E R ATI O N PO LI CY FO R 2 016

2.18 Base salary
Salaries are reviewed annually following the year end taking into account market benchmarks for executives of comparable status, responsibility
and skill.

Manny’s salary has not changed since he joined the firm over five years ago. As evidenced by Man’s relative and absolute TSR, since Manny was
appointed CEO three years ago (see graph in table R12b), the Company has performed well and the management team he has led has transformed
the business. A review by the Committee shows that Manny’s total compensation is one of the lowest in the UK and US listed peer group. Manny
is already a very significant shareholder in the Company. Accordingly, the Committee concluded that the most effective way to recognise Manny’s
personal contribution, his low relative total compensation in relation to performance and the fact that his salary had not been adjusted for over five
years was to award Manny a 10% salary increase. The Committee has therefore recommended and the Board has agreed that Manny’s salary be
increased from $1,000,000 to $1,100,000 per annum with effect from 1 January 2016.

Base salary of executive directors

Base salary at

1 January 2015

1 January 2016

Notes:
1 Jonathan Sorrell’s base salary increased from $625,000 p.a. to $750,000 p.a. with effect from 1 April 2015.
2 Manny Roman’s base salary increased from $1,000,000 p.a. to $1,100,000 p.a. with effect from 1 January 2016.

2.19 Short-term annual cash bonus for 2016
The objectives for the 2016 bonus set by the Committee are around:
i. Strategy, structure and people
ii. P&L performance and sales
iii. Financial health
iv. Risk, compliance and reputation
v. External stakeholder engagement

Table R20

Jonathan
Sorrell

Emmanuel
Roman

$625,0001 $1,000,000

$750,000 $1,100,0002

The Remuneration Committee considers that the disclosure in advance of quantified objectives may provide an unfair advantage to Man Group’s
competitors, most of whom are not listed and are not required to disclose this information. Details of the 2016 objectives set by the Board and the
achievements of each of the executive directors will be included in the Directors’ Remuneration report for the year ended 31 December 2016.

Man Group plc Annual Report 2015 79

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2.20 Long-term deferred bonus for 2016 performance under the Deferred Executive Incentive Plan
The KPIs and thresholds that will be used to measure performance are set out below.

Balanced scorecard of financial and non-financial metrics1

Table R21

Financial KPIs

Definition

Target

Investment performance
(25%)

– Measure net performance of four managers
(represented by key funds) vs. respective
benchmarks.

– Key funds/benchmark:

– Man AHL Diversified/two of three competitors.
– Numeric asset-weighted net return/composite

benchmark.

– Relevant period: performance is measured over the
reporting year (first to last trading days of the year).

– Criteria type: binary outcome.
– Criteria for each fund over the relevant period:

– If Net Performance ≤ Benchmark Performance,

criteria is not met.

– If Net Performance > Benchmark Performance,

– GLG Alternative Strategies Dollar Weighted

criteria is met.

Composite/HFRX.

– Weighting: each fund is ascribed a 1/4 weighting

Net flows (25%)

– FRM Diversified II/HFRI FoF: Conservative Index.

– Measure net FUM flows annually.
– Net Flows are defined as, over a reporting year:

– (Gross Sales – Redemptions)/Start of Year FUM,

expressed in %.

– Relevant period: net flows are measured over the

reporting year.

– Criteria type: sliding scale.
– Criteria for the relevant period:

– If Net Flows ≤ 0%, criteria is not met.
– If Net Flows ≥ 10%, criteria is met in full.
– If 0% < Net Flows < 10%, criteria is met

proportionally.

Adjusted2 management fee
EBITDA margin (15%)

– Measure management fee EBITDA margin.
– Adjusted management fee EBITDA margin defined
as, over a reporting year, adjusted management
fee EBITDA/Net Revenues.

– Relevant period: Adjusted management fee EBITDA

margin is measured over the reporting year.

– Criteria type: sliding scale.
– Criteria for the relevant period:

– If adjusted management fee EBITDA margin

≤ 25%, criteria is not met.

– If adjusted management fee EBITDA margin

≥ 40%, criteria is met in full.

– If 25% < adjusted management fee EBITDA
margin < 40%, criteria is met proportionally.

Adjusted2 management fee
EPS growth (15%)

– Measure adjusted management fee EPS growth, i.e.

– Relevant period: Adjusted management fee EPS

growth in minimum ordinary dividend per share.
– Adjusted management fee EPS growth defined as:
– (Current Year Adjusted Management Fee EPS/
Previous Year Adjusted Management Fee EPS)
-1, expressed in %.

growth is measured over the reporting year.

– Criteria type: sliding scale.
– Criteria for the relevant period:

– If adjusted management fee EPS growth ≤ 0%

plus RPI, criteria is not met.

– If adjusted management fee EPS growth ≥ 20%

plus RPI, criteria is met in full.

– If 0% plus RPI, < adjusted management fee
EPS growth < 20% plus RPI, criteria is met
proportionally.

Non-financial metrics

Culture and talent (20%)

– Fostering a culture of effective dealings with all stakeholders.
– Building and retaining a collaborative, motivated and aligned senior management team.
– Having an appropriate succession plan in place for senior management.
– Attracting and retaining high quality staff motivated by appropriate, balanced incentives.

The Remuneration Committee will review the balanced scorecard of metrics prior to the start of each financial year and may amend them so that
they remain appropriately challenging.

Notes:
1 The performance period for 2017 awards will be the three-year performance period 2014 to 2016 and will be assessed at the end of the 2016 financial year. For the financial

metrics, performance will be measured for each of the years and then averaged. The non-financial metric is assessed over the three-year performance period.

2 Adjusting items are material items which are excluded by virtue of their size or nature in order to aid comparability from period to period and to show the underlying profitability of

the business.

80 Man Group plc Annual Report 2015

2.21 Non-executive director remuneration policy for 2016
There has been no increase in fees for the Chairman since his appointment in 2007 or for non-executive directors since 2009. The Board has agreed
that the Senior Independent Director fee will increase to £15,000 p.a. with effect from the date of the 2016 AGM.

Non-executive directors’ fees for 2016

All figures in GBP
Position

Chairman of the Board

Board fee1

Senior Independent Director

Audit and Risk Committee chair

Other Audit and Risk Committee members

Remuneration Committee chair

Other Remuneration Committee members

Notes:
1
2 Pro-rated to take account of the increase in fee with effect from the date of the 2016 AGM.

Includes Nomination Committee membership (all non-executive directors are members of the Nomination Committee).

For and on behalf of the Board

Phillip Colebatch
Remuneration Committee Chairman
24 February 2016

2016

2015

450,000

65,000

13,2762

30,000

15,000

25,000

10,000

65,000

10,000

30,000

15,000

25,000

10,000

Table R22

%
increase

32.76

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D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T C O N T I N U E D
3 . D I R E C T O R S ’ R E M U N E R A T I O N P O L I C Y

3.1. Executive directors’ remuneration policy
Aligning the interests of the executive directors with those of shareholders and with Man Group’s strategic goals is central to Man Group’s
remuneration policy.

In line with shareholders’ interests being managed within a robust governance framework, the Company aims to retain and incentivise high calibre
executive directors by paying competitive base salary and benefits, together with a short-term annual bonus and a long-term deferred bonus linked to:

– profits and contribution;
– the achievement of individual objectives which are consistent with the strategy of the Company and building sustainable profitability;
– the achievement of long-term strategic KPIs in line with the long-term focus of the Company;
– the creation of long-term shareholder value;
– ongoing oversight of a robust risk management framework;
– maintenance of strong capital and liquidity positions; and
– addition of senior talent, building succession for leadership and setting a strong governance structure for the Board’s delegated authorities.

This section of the report sets out the remuneration policy for executive and non-executive directors which shareholders approved at and which
was effective from the 2015 AGM, on 8 May 2015. The remuneration policy has been included in this Annual Report in full (using updated data in the
scenario charts) to provide the context within which the Committee has conducted its work during the year and has been updated for the inclusion of
clawback provisions in respect of incentive awards.

Executive directors’ remuneration policy

Table R23

Function

Operation

Opportunity

Performance metrics

Base salary
Based on experience and
individual contribution to
leadership and Company
strategy

Salaries are reviewed annually following
the year end taking into account
market ranges for executives of
comparable status, responsibility and
skill in companies of similar size and
complexity to Man with consideration
also given to sector relevance.

There is no set maximum
salary for executive directors.
In reviewing salaries the
Remuneration Committee
takes into account company
performance, salary increases
below Board level, time
since the last increase,
market practice and total
compensation opportunity.

Continued good performance.

Pension
To provide an opportunity
for executives to build up
income on retirement

Benefits
To provide non-cash
benefits which are
competitive in the
market in which the
executive is employed

Sharesave
To encourage UK-based
employees to own
Man Group shares

Group Personal Pension (GPP), or a
similar contribution to an alternative
arrangement is provided. For those
exceeding HM Revenue & Customs
pension allowances, cash allowances
are provided at no additional cost
to Man.

Benefits include family private
medical insurance, life assurance and
permanent health insurance.

Flexible benefits can be purchased
from base salary.

Other ad-hoc benefits such as
relocation can be offered, depending
on personal circumstances.

The Man Group Sharesave Scheme
is an all-employee plan. The executive
directors who participate in the
Sharesave Scheme are granted options
over Man shares and make monthly
savings from their post-tax salary.
Options are granted at a 20% discount
to market price on the date of grant.

The maximum employer
contribution is 20% of
pensionable base salary.

None.

It is not anticipated that the
total taxable benefits for any
executive director will normally
exceed 10% of salary.

None.

Savings capped at HM
Revenue & Customs limits.

In accordance with HM Revenue
& Customs requirements.

82 Man Group plc Annual Report 2015

Executive directors’ remuneration policy continued

Table R23

Function

Operation

Opportunity

Performance metrics

The maximum award is 300%
of salary.

The bonus is based on the Remuneration
Committee’s assessment of executive
directors’ performance over a financial
year against objectives, which cover:

Executive Incentive
Plan
Short-term annual cash
bonus

To incentivise and reward
strong performance
against annual financial
and non-financial targets

Objectives are set at the start of
the year. At the end of the year, the
Remuneration Committee considers
the extent to which these have been
achieved and sets the award level.
Awards are normally paid in cash.

Clawback provisions apply for gross
misconduct.

Executive Incentive
Plan
Long-term deferred bonus

To engage and motivate
senior management
to deliver on KPIs and
support implementation of
the Company’s strategy.

The deferred awards will
be determined in relation
to performance measured
against the balanced
scorecard metrics set out
in the performance metrics
column.

The maximum deferred award
opportunity will gradually
increase to 525% of salary as
follows:

– 2016 awards: 408%
– 2017 awards: 467%
– 2018 awards: 525%

This staged increase ensures
that the incentive opportunity
for performance years
completed prior to the date
on which the policy change
became effective is not
increased retroactively.

Deferred shares are awarded subject
to an assessment based on the three
prior years’ performance against
financial and non-financial objectives
set at the start of that three year
performance period. Performance
is measured for each of the three
reporting years and then averaged.

Transitional arrangements of one, two
and three-year performance periods
will apply for new executive directors,
to ensure that they do not receive an
award based on performance pre-
dating their hire.

For any deferred shares awarded,
the vesting period is set at a further
three to five years after the end of the
relevant performance period. This
creates, with the performance and
vesting periods combined, a total time
horizon of six to eight years. During
the three to five year vesting period,
the value of any shares awarded will
be fully aligned with and dependent on
shareholder experience and value over
that time.

The number of shares subject to an
award is increased by reference to any
dividends paid between the grant and
vesting date of an award. Such shares
vest only when the shares subject to an
award vest.

Malus provisions may apply for
misstatement or misconduct.
Clawback provisions apply for Gross
Misconduct.

1. Strategy, structure and people
2. P&L performance and sales
3. Financial health
4. Risk, compliance and reputation
5. External stakeholder engagement

The outcome of performance against
these objectives will be reported in the
Directors’ remuneration report for the
financial year in consideration.

Based on a balanced scorecard of
performance criteria for each executive
director.

80% of the award is based on financial
criteria, comprising:

– Investment performance 25%
– Net flows 25%
– Adjusted management fee EBITDA

margin 15%

– Adjusted management fee EPS growth

15%

The remaining 20% of an award is based
on the Remuneration Committee’s
assessment of performance against
non-financial criteria including culture
and talent.

The Remuneration Committee initially
assesses executive director performance
against the metrics outlined above to
determine the percentage of award
earned for the performance period. It
then has full discretion to decide the
multiple of salary (between 0% up to
the maximum set out in the Opportunity
column) to which the percentage of
award determined by the metrics should
be applied. In deciding this multiple, it
takes account of any performance issues
not included in the DEIP metrics and any
other relevant factors such as overall
corporate performance, shareholder
return and experience, internal relativities
and the current public and private fund
manager competitor landscape. Under no
circumstances can the maximum set out
in the Opportunity column be exceeded.

The Remuneration Committee may adjust
the weighting or definition of the above
performance criteria from time to time, to
reflect changes in strategic priorities.

Notes to the policy table:
In implementing the above remuneration policy, the Remuneration Committee shall have regard to all relevant legal and regulatory requirements, including the principles and provisions
of the UK Corporate Governance Code, the UKLA Listing Rules, the Financial Conduct Authority Remuneration Code of practice on remuneration policies, the AIFM Remuneration
Code, and to leading investor representative body guidelines (including the Investment Association, ISS and the PLSA).

Please note that any commitments made prior to, but due to be fulfilled after, the approval and implementation of the remuneration policy approved by shareholders will be honoured.
In addition to the elements of remuneration detailed in the policy table, the Remuneration Committee may consider it appropriate to grant an award under a different structure in order
to facilitate the recruitment of an individual, exercising the discretion available under the UKLA Listing Rules (see details in the paragraph ‘Approach to recruitment remuneration’).

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3.2 Performance measures selection and approach to target-setting
Annual objectives are set according to immediate priorities identified by the Board and management and will be reviewed and adjusted annually to
reflect changing priorities. The long-term performance metrics are in line with the long-term strategic focus of the Company and will be reviewed as
required in line with any changes in strategic direction.

3.3 Differences between executive directors’ and employees’ remuneration
Executive Committee members are eligible to participate in the Executive Incentive Plan alongside executive directors to align the remuneration of the
most senior management. However, in line with market practice in alternative investment funds, their incentive payouts are uncapped.

Employee remuneration includes base salary, benefits, an annual performance bonus and, for senior contributors, long-term share and fund-based
deferrals. The level of deferral increases as total compensation increases. This provides alignment with shareholders and the future performance of the
Company and with the interests of investors in funds managed by the Company.

Sales staff have a specific bonus scheme to reinforce asset gathering and retention whilst aligning interests on costs.

3.4 Shareholding guidelines
In order to align the interests of executive directors and shareholders, Man Group requires its executive directors to maintain a proportion of Man
Group shares calculated with reference to their base salary. The Chief Executive Officer is required to maintain a shareholding of 200% of base salary.
Other executive directors are required to maintain a shareholding of 100% of base salary. Executive directors are required to build up this shareholding
on joining the Board and after a reduction in share price. Incumbents will build up to the prescribed shareholdings with (post-tax) vested shares where
not already at or above this level.

In addition, as explained in Table R23, the long-term deferred bonus element of the Executive Incentive Plan has been designed so that executive
directors have the potential to build up over time a significant holding of unvested shares, subject to ongoing service, which are fully aligned with
shareholder experience and value. However, these shares are not taken into account in the calculation of the level of directors’ holdings measured
against our shareholding guidelines which require the holding of totally unrestricted and disposable shares.

3.5 Non-executive directors’ remuneration policy
Non-executive directors have formal letters of appointment. These do not contain any notice provisions or provision for compensation in the event of
early termination. The current Chairman has a contract with the Company which provides that his appointment as Chairman is terminable on three
months’ notice; there are no notice provisions relating to his appointment as a director. The incoming Chairman has a contract with the Company
which provides that his appointment is terminable on six months’ notice. The Board’s policy is to appoint non-executive directors for an initial three-
year term, subject to retirement and reappointment by shareholders annually at the AGM, which may be followed by a further three years by mutual
agreement. Any further extension will be subject to rigorous review. The initial dates of appointment of the non-executive directors to the Board are
shown on pages 46 and 48 of this 2015 Annual Report, and their current fee levels are provided in the Directors’ remuneration report on page 81.
Non-executive directors are also encouraged to build a shareholding in the Company.

Details of the policy on fees paid to our non-executive directors are set out in the table below.

Non-executive directors’ remuneration policy

Table R24

Function

Operation

Opportunity

Performance metrics

Fees
To attract and retain non-executive
directors of the highest calibre and
experience relevant to Man Group

Fees are reviewed annually by the
Board at the year end taking into
account market benchmarks for
non-executives of companies of
similar size and complexity to Man
Group with consideration of sector
relevance.

Any fee increases for non-
executive directors will not
normally exceed the average
increase in the market. A fee
increase may be above this level
if there is a significant change
in time commitment required or
scope of the role.

None.

The Chairman’s remuneration
is recommended by the
Remuneration Committee and
approved by the Board. Neither
the Chairman nor the non-
executive directors take part in
discussions or vote on their own
remuneration.

Non-executive directors receive
a base fee for Board service
and additional fees for Board
Committee membership and
other responsibilities. They do not
participate in any share option or
share incentive plans.

84 Man Group plc Annual Report 2015

3.6 Illustrative pay for performance scenarios
Although executive directors will be assessed individually for their short-term awards, the chart below provides an illustration of some of the potential
2017 reward opportunities for executive directors in respect of the 2016 performance year, and the potential split between the different elements of
remuneration under three different performance scenarios: ‘minimum’, ‘mid-point’ and ‘maximum’.

Projected pay under three performance scenarios ($000)

Maximum

14%

CEO

Mid-point

24%

34%

30%

53%

46%

$5,537

Minimum

100%

$1,320

13%

Maximum

14%

34%

53%

$6,650

CFO

Mid-point

24%

30%

46%

$3,775

Minimum

100%

$900

13%

n Salary & beneﬁts

n Annual cash EIP

n Long-term EIP

Table R25

$9,753

Assumptions used:
– The ‘minimum’ scenario reflects base salary, pension and benefits as disclosed in the Single Figure of Total Remuneration (i.e. fixed remuneration)

which are the only elements of the executive directors’ remuneration packages not linked to performance during the year under review.

– The ‘mid-point’ scenario reflects fixed remuneration as above, plus a bonus payout of 150% of salary for the short-term award (being half of the

maximum short-term award) and a deferred bonus award of 233.5% of salary (being half of the maximum deferred award).

– The ‘maximum’ scenario reflects fixed remuneration as above, plus a full bonus payout of the maximum of 300% of salary for the short-term annual

cash bonus award and the maximum of 467% of salary for the deferred bonus award.

– The illustrations are based on initial award value and do not, therefore, reflect potential share price appreciation or any dividends received over the

deferral periods.

3.7 Approach to recruitment remuneration
External appointment

Approach to recruitment remuneration

Table R26

Component

Base salary

Pension

Benefits

Sharesave

Approach

Maximum grant value

Base salary will be determined to provide competitive total
compensation in relation to relevant market practice, experience and
skills of the individual, internal relativities and their current compensation.

None

Pension contributions or an equivalent cash supplement will normally be
set in line with existing policy.

Benefits may include (but are not limited to) private medical insurance,
life assurance, permanent health insurance, Group income protection
and any necessary relocation expenses.

New appointees will be eligible to participate in any all-employee share
schemes the Company offers.

n/a

Executive Incentive Plan
Short-term annual cash bonus

The remuneration structure described in the policy table will apply to
new appointees with the relevant maximum being pro-rated to reflect
the proportion of employment over the year.

300% of salary

Executive Incentive Plan
Long-term deferred bonus

New appointees may be granted awards under the long-term deferred
bonus on the same terms as other executive directors, as described in
the policy table.

525% of salary

The performance periods used for determining the awards will be
gradually increased until the new appointee has completed three full
financial years at Man Group.

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D I R E C T O R S ’ R E M U N E R A T I O N R E P O R T C O N T I N U E D

3.7 Approach to recruitment remuneration continued
In determining the appropriate remuneration, the Remuneration Committee will take into consideration all relevant factors (including quantum, nature
of remuneration and the jurisdiction from which the candidate was recruited) to ensure that arrangements are in the best interests of both Man Group
and its shareholders.

With respect to a new appointment the Remuneration Committee may ‘buy out’ incentive arrangements, including bonuses, forgone on leaving a
previous employer, and awards made under such ‘buy out’ arrangements may be in addition to the remuneration outlined in the table above. In doing
so, the Remuneration Committee will consider relevant factors including any performance conditions attached to those incentive arrangements and
the likelihood of those conditions being met. In defining the size of this ‘buy out’ award, the Remuneration Committee would ensure that its fair value
is no higher than the fair value of the incentive arrangements forgone. The Remuneration Committee may also consider it appropriate to structure any
such ‘buy out’ award differently to the structure described in the policy table including whether appropriate performance conditions should apply,
exercising the discretion available under the UKLA Listing Rules.

The Remuneration Committee does not intend that such ‘buy out’ awards will be made as a matter of routine; on the contrary, although the
Remuneration Committee cannot anticipate every circumstance which it might face in the future, it is expected that any such awards made under the
UKLA Listing Rules will only be contemplated in exceptional circumstances, will be reviewed and approved by the full Board and described fully in the
subsequent year’s Directors’ remuneration report.

Internal appointment
For the appointment of a new executive director by way of internal promotion, the Remuneration Committee’s approach will be consistent with the
policy for external appointees detailed above. Where an individual has contractual commitments made prior to their promotion to the Board, the
Company will continue to honour these commitments.

3.8 Non-executive directors
When recruiting a new non-executive director, the Board will utilise the policy as set out in Table R24 on page 84. A base fee in line with the prevailing
fee schedule would be payable for Board membership, with additional fees payable for acting as Senior Independent Director or as a member or
Chairman of a Board Committee.

3.9 Service contracts and exit payment policy

Service contracts

Element

Contract dates

Condition

Jonathan Sorrell: 28 September 2012

Emmanuel Roman: 7 February 2013

Current appointment

No fixed term

Notice period (by either Company
or director)

Emmanuel Roman: 12 months

Jonathan Sorrell: 6 months

Table R27

Contractual entitlement to fixed bonus
or share-based incentive

None

The Company’s policy is that notice periods will not exceed 12 months

Provisions for contract termination

Short-term annual cash bonus

Under both contracts the Company can opt to terminate immediately by making a payment in lieu of
the notice period or part of it. Emmanuel Roman’s contract requires payment of base salary only in lieu.
Jonathan Sorrell’s contract requires payment of base salary plus the value of pension contributions
(or alternative cash allowance) and certain other insured benefits in lieu.

Payments in lieu are to be made in monthly instalments unless the Company and the executive director
agree otherwise.

Unless the Company decides otherwise both executive directors have a duty to mitigate their losses
arising from termination of their employment; any replacement earnings earned in what would otherwise
have been the notice period will reduce the obligation on the Company to make payments in lieu.

The service contracts do not oblige the Company to pay any cash bonus to executive directors and
bonuses are awarded at the Board’s discretion following a recommendation from the Remuneration
Committee. Payment of any cash bonus is conditional upon the executive director being in employment
and not under notice at the payment date.

Long-term deferred bonus and
other awards

The treatment of deferred bonuses and other long-term awards is governed by the relevant Plan rules as
explained below.

86 Man Group plc Annual Report 2015

3.9 Service contracts and exit payment policy continued
To protect Man Group’s business interests the executive directors’ service contracts contain covenants which restrict the executives’ ability to solicit or
deal with clients and their ability to solicit senior employees. Emmanuel Roman has also entered into a broader non-compete covenant for an agreed
period post termination.

Further, the Board has the right, at its discretion, to require Jonathan Sorrell to comply with a broader non-compete covenant for up to six months
post termination to provide additional protection for the Company. If the Board exercises this right, the Company will pay an additional amount up to
six months’ base salary and the value of pension contributions (or alternative cash allowance) and certain other insured benefits so that he is not left
without income during the time when the Board wishes the non-compete to operate. This amount is paid in two equal instalments and is reduced by
any payments made in lieu of notice.

Executive directors’ service contracts are available to view at the Company’s registered office.

When considering exit payments, the Remuneration Committee reviews all outstanding incentive awards and assesses outcomes that are fair to both
shareholders and participants. The table below summarises how long-term deferred awards are typically treated in specific circumstances, with the
final treatment remaining subject to the Remuneration Committee’s discretion.

Long-term deferred bonus and other share awards

Table R28

Reason for leaving

Good leaver1

Timing of vesting

Calculation of vesting/payment

Follows normal vesting schedule (except in the
case of death where the Remuneration Committee
may allow early vesting).

Awards vest on a time pro rata basis under the
long-term deferred bonus of the Executive Incentive
Plan. No time pro-rating applies under the Deferred
Bonus Share and Option Plan2.

Any other reason

All awards lapse.

Notes:
1 Good leaver reasons include death, retirement, ill-health, injury or disability, redundancy, sale of the company or business in which the individual was employed, leaving with
agreement of the Company if the Remuneration Committee is satisfied that an orderly handover has been organised and performed. The Remuneration Committee may also
decide, in its discretion, to grant good leaver status in other exceptional circumstances and will take into account the reason for leaving and the executive director’s performance
up to the date employment ceases.

2 Jonathan Sorrell was granted a conditional share award under the Deferred Bonus Share and Option Plan in March 2013.

3.10 External appointments
With the approval of the Board in each case, and subject to the overriding requirements of the Company, executive directors may accept a limited
number of external appointments as non-executive directors of other companies and retain any fees received. Details of external directorships held by
executive directors, including associated fees, are provided in the Directors’ remuneration report for the relevant year.

3.11 Consideration of conditions elsewhere in the Company
In assessing executive director remuneration, internal relativities within the Company are reviewed by the Remuneration Committee. These internal
reviews cover the individual elements of base salaries, benefits and total compensation.

3.12 Consideration of shareholder views
The Remuneration Committee takes into account shareholder views received in relation to remuneration resolutions to be considered at the AGM
each year and guidance from shareholder representative bodies more broadly. The Remuneration Committee considers shareholder feedback an
important input when forming remuneration policy and regularly reviews Man Group’s remuneration policy against the guidelines of key institutional
shareholders and their representative bodies.

The above remuneration policy was discussed with a number of Man Group’s major shareholders and certain shareholder voting bodies in early 2015
and reflects the views expressed in that consultation.

Man Group plc Annual Report 2015 87

CORPORATE GOVERNANCE
D I R E C T O R S ’ R E P O R T

The Directors present their report,
together with the audited consolidated
financial statements, for the year ended
31 December 2015 (the ‘year’).

Man Group plc is incorporated as a public limited company and is
registered in England with the registered number 08172396 (the
“Company”). The Company’s registered office is Riverbank House,
2 Swan Lane, London EC4R 3AD.

Directors
Details of the current directors, together with their biographies, can be
found on pages 46 to 48. Ian Livingston and Richard Berliand were
appointed as non-executive directors following the year end on 1 January
and 19 January 2016 respectively. All of the other directors served for the
duration of the year with the exception of John Cryan who was appointed
as a non-executive director on 15 January 2015.

Details of the directors’ interests in the Company’s shares are given on
page 77 of the Annual Report.

Powers of directors
The Board is responsible for the management of the business of the
Company and may exercise all the powers of the Company subject to the
provisions of relevant statutes and the Company’s Articles of Association
(the ‘Articles’). A copy of the Articles is available on the Company’s
website and by request from the registered office of the Company. The
Articles may be amended by special resolution of the shareholders.

Appointment, retirement and replacement of directors
The appointment, retirement and replacement of directors are governed
by the Articles, the UK Corporate Governance Code and the Companies
Act 2006. Under the Articles, the Board has the power to appoint further
directors during the year, but any director so appointed must stand for
reappointment at the next Annual General Meeting (AGM). In accordance
with the Articles, one-third of the Board must retire by rotation at each
AGM and may stand for reappointment. In practice, and in accordance
with the UK Corporate Governance Code, all Board members retire and
offer themselves for reappointment at each AGM.

The Articles give each director the power to appoint any person to be his
alternate, such appointment being subject to Board approval where the
proposed alternate is not an existing director of the Company.

Directors’ indemnities and insurance cover
The Company has maintained qualifying third-party indemnity provisions
for the benefit of its directors during the year and these remain in force
at the date of this report. The indemnity is granted by the Company to
new directors on their appointment and covers, to the extent permitted
by law, any third-party liabilities which they may incur as a result of their
service on the Board. The Company arranges directors’ and officers’
liability insurance to cover certain liabilities and defence costs which
the Company indemnity does not meet. Neither the indemnity nor the
insurance provides any protection in the event of a director being found to
have acted fraudulently or dishonestly in respect of the Company.

Shares
Share capital
Details of movements in issued share capital, together with the rights
and obligations attaching to the Company’s shares, are set out in Note
23 to the financial statements. This Note also provides information on the
Company’s unexpired authority to purchase its own shares and details of
the shares purchased by the Company during the year.

Substantial voting interests
As at 31 December 2015 the Company had been notified of the
following voting interests in the ordinary share capital of the Company in
accordance with DTR 5 of the FCA’s Disclosure and Transparency Rules
(DTR 5). Percentages are shown as notified, calculated with reference to
the Company’s disclosed share capital as at the date of the movement
triggering the notification.

Shareholder

Number of
shares notified
to the Company

Percentage of
issued share
capital

Odey Asset Management LLP

107,786,770

5.91%

Société Générale Option Europe, Société
Générale Acceptance N.V., and Société
Générale Issuer1

TIAA-CREF Investment Management LLC

67,993,182

4.00%

and Teachers Advisors, Inc.2

67,877,246

3.99%

Notes:
1 As at 31 December 2015, Société Générale Option Europe, Société Générale

Acceptance N.V., and Société Générale Issuer (together, ‘Société Générale’) had
notified 67,993,182 voting rights attached to the Company’s issued share capital.
The majority of these (59,969,151) related to cash-settled derivatives with no voting
rights which are however required to be notified to the Company under DTR 5.3.1R(1)
(b), being financial instruments with a similar economic effect to qualifying financial
instruments. The remaining 8,024,031 consisted of direct and indirect interests in
voting rights attached to shares in the Company.

2 As at 31 December 2015, TIAA-CREF Investment Management LLC (‘TIAA-CREF’)

had notified 32,356,401 voting rights attached to the Company’s issued share capital.
Teachers Advisors, Inc., which is affiliated with TIAA-CREF, had notified 35,520,845
such voting rights.

No changes to the above were disclosed to the Company in accordance
with DTR 5 during the period 1 January to 22 February 2016 inclusive.

Restriction on voting rights
Where shares are held in employee benefit trusts for the satisfaction of
awards made under the Company’s share schemes, under the trust
deeds the trustees have discretion to vote or abstain from voting.

Share transfer restrictions
The Board may decline to register a transfer of any share which is not a
fully paid share. In addition, registration of a transfer of an uncertificated
share may be refused in the circumstances set out in the Uncertificated
Securities Regulations and where the number of joint holders exceeds
four.

Change of control
The Company’s employee share incentive schemes contain provisions
whereby, upon a change of control of the Company, outstanding options
and awards would vest and become exercisable, subject to any prorating
that may be applicable.

Independent auditor
The Company’s auditor, Deloitte LLP, has indicated its willingness to
continue in office and a resolution to reappoint Deloitte LLP as auditor of
the Company will be proposed at the 2016 AGM.

88 Man Group plc Annual Report 2015

Carbon emissions reporting
The information below details our mandatory reporting of greenhouse gas
emissions for the year pursuant to the Companies Act 2006 (Strategic
Report and Directors’ Report) Regulations 2013.

Where Man is the landlord of a property and electricity costs are incurred
on behalf of sub-tenants, these costs are on-charged to the sub-tenants
as the users of the electricity. Accordingly, no emissions data for energy
usage incurred on behalf of sub-tenants is included in Man Group’s
reportable emissions above.

Around 78% (2014: 82%) of our overall emissions relate to purchased
electricity and gas usage across our various geographical locations, with
the remaining 22% (2014: 18%) relating to air travel. All emissions are
reported in tonnes of carbon dioxide equivalents (CO2e).

Man Group’s emissions by scope

Scope

Scope 1

Scope 2

Scope 3

Total

Source

Natural gas

Electricity

Air travel

Tonnes of CO2e emissions
Year ended
31 December
2015

Year ended
31 December
2014

380

8,142

2,472

10,994

326

7,411

1,753

9,490

Reported emissions have been calculated using an intensity metric
which will enable us to monitor emissions independent of activity. As
Man Group is a people-related business, we expect that any changes to
headcount will impact the property space we occupy and the amount of
business travel we have. Therefore, emissions per employee are the most
appropriate metric for our business, as shown in the table below. The
average number of employees in 2015 was 1,106 (2014: 1,001).

Disclosures of emissions related to business travel are restricted to flight
costs as a result of the CO2e emission convertible data relating to other
means of transport (i.e. taxis) not being available.

Further disclosures
Information fulfilling the further disclosure requirements contained in
the Companies Act 2006, Schedule 7 of the Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations 2008, and
the FCA’s Listing Rules and Disclosure and Transparency Rules, where
applicable to the Company, can be found in the following sections of
the Annual Report for the year ended 31 December 2015 which are
incorporated into the Directors’ report by reference:

Future developments in the business
Research and development activities
Dividend
Dividend waiver
Employment policy and employee involvement
Financial risk management and financial

Pages

10-25
18-25
33, 107, 139-40
119
38-42

instruments

112-113, 129-131

Corporate governance report including internal

control and risk management statements
Directors’ responsibility statement including
disclosure of information to the auditors

49-56

Emissions per employee

Scope

Scope 1

Scope 2

Scope 3

Emissions per employee

Tonnes of CO2e emissions
Year ended
31 December
2015

Year ended
31 December
2014

0.3

7.4

2.2

9.9

0.3

7.4

1.8

9.5

For and on behalf of the Board

Rachel Rowson
Company Secretary
24 February 2016

As expected, natural gas and energy emissions (Scope 1 and Scope
2) have increased in line with the increase in employees in the year. Air
travel emissions (Scope 3) have increased overall and per employee in
2015 primarily as a result of levels of acquisition-related integration activity
during the year.

Methodology
For practical reasons, emissions data was gathered for the first nine
months of each year and, as appropriate, extrapolated in order to
calculate the full year emissions. Based on the nature of our emissions
and the consistency month on month, we believe this is an appropriate
representation of the annual emissions.

In order to compile the reportable emissions data from our offices,
electricity and gas meter readings have been obtained from our energy
suppliers. For some of our smaller offices we are not charged for energy
usage separately as these costs are incorporated into the service fees for
our premises. These emissions have not been included in the reported
total above, due to the data being unavailable, and relate to offices for the
use of 16 employees (2014: nine employees).

Man Group plc Annual Report 2015 89

GOVERNANCE
D I R E C T O R S ’ R E S P O N S I B I L I T Y S T A T E M E N T

The directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare such financial statements
for each financial year. Under that law the directors are required to
prepare the Group financial statements in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the European Union
and Article 4 of the IAS Regulation and have also chosen to prepare
the Parent Company financial statements in accordance with Financial
Reporting Standard 101 Reduced Disclosure Framework. Under
company law the directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs and the profit or loss of the Company and Group for that period.

In preparing the Parent Company financial statements, the directors are
required to:
– select suitable accounting policies and then apply them consistently;
– make judgements and accounting estimates that are reasonable and

prudent;

– state whether Financial Reporting Standard 101 Reduced Disclosure
Framework has been followed, subject to any material departures
disclosed and explained in the financial statements; and

– prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Company will continue in business.

In preparing the Group financial statements, International Accounting
Standard 1 requires that directors:
– properly select and apply accounting policies;
– present information, including accounting policies, in a manner

that provides relevant, reliable, comparable and understandable
information;

– provide additional disclosures when compliance with the specific

requirements in IFRSs are insufficient to enable users to understand
the impact of particular transactions, other events and conditions on
the entity’s financial position and financial performance; and

– make an assessment of the Group’s ability to continue as a going

concern.

The directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the Company’s transactions and
disclose with reasonable accuracy at any time the financial position of
the Company and Group and enable them to ensure that the financial
statements comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Company and Group,
and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company’s website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in
other jurisdictions.

Each of the directors, whose names and functions are on pages 46 to 48,
confirm that, to the best of each person’s knowledge and belief:
– the financial statements, prepared in accordance with the relevant

financial reporting framework, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the
undertakings included in the consolidation taken as a whole;

– the strategic report includes a fair review of the development and

performance of the business and the position of the Company and the
undertakings included in the consolidation taken as a whole, together
with a description of the principal risks and uncertainties that they face;
– the Annual Report and financial statements, taken as a whole, are fair,
balanced and understandable and provide the information necessary
for shareholders to assess the Company’s and Group’s position,
performance, business model and strategy; and

– there is no relevant audit information of which the Group’s auditor is
unaware, and that they have taken all steps that they ought to have
taken as a director in order to make themselves aware of any relevant
audit information and to establish that Man’s auditor is aware of
that information.

90 Man Group plc Annual Report 2015

F I N A N C I A L S T A T E M E N T S

Financial statements contents

Audited information

Group income statement

Group statement of comprehensive income

Group balance sheet

Group cash flow statement

Group statement of changes in equity

Parent Company financial information

Basis of preparation

Significant accounting policies schedule

Adjusted profit before tax

Revenue

Income or gains on investments and
other financial instruments

Distribution costs

Asset servicing

Compensation

Other costs

Finance expense and finance income

Taxation

Earnings per ordinary share

Dividends

Goodwill and acquired intangibles

Other intangibles

Cash, liquidity and borrowings

Investments in fund products and other investments

Fee and other receivables

Trade and other payables

Provisions

Investments in associates

Leasehold improvements and equipment

Deferred compensation arrangements

Capital management

Pension benefits

Segmental analysis

Geographical disclosure

Foreign currencies

Fair value of financial assets/liabilities

Related party transactions

Financial guarantees and commitments

Other matters

Group investments

Independent auditor’s report

Unaudited information

Five year record

Note

135

100

101

102

103

104

105

106

107

111

112

113

117

118

119

121

123

127

128

129

131

132

138

Man Group plc Annual Report 2015 91

FINANCIAL STATEMENTS

I N D E P E N D E N T A U D I T O R ’ S R E P O R T T O T H E M E M B E R S
O F M A N G R O U P P L C

Opinion on financial statements of Man Group plc
In our opinion:

– the financial statements give a true and fair view of the state
of the Group’s and of the Parent Company’s affairs as at 31
December 2015 and of the Group’s profit for the year then
ended;

– the Group financial statements have been properly prepared in
accordance with International Financial Reporting Standards
(IFRSs) as adopted by the European Union;

– the Parent Company financial statements have been properly

prepared in accordance with United Kingdom Generally
Accepted Accounting Practice, including FRS 101 “Reduced
Disclosure Framework”; and

– the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006 and as
regards the Group financial statements, Article 4 of the IAS
Regulation.

The financial statements comprise the Group income statement, the
Group statement of comprehensive income, the Group and Parent
Company Balance sheets, the Group cash flow statement, the Group
and Parent Company Statement of changes in equity and the related
Notes 1 to 32 for the Group and 1 to 7 for the Parent Company. The
financial reporting framework that has been applied in the preparation of
the Group financial statements is applicable law and IFRSs as adopted
by the European Union. The financial reporting framework that has been
applied in the preparation of the Parent Company financial statements
is applicable law and United Kingdom Accounting Standards (United
Kingdom Generally Accepted Accounting Practice), including FRS 101
“Reduced Disclosure Framework”.

Going concern and the directors’ assessment of the principal
risks that would threaten the solvency or liquidity of the Group
As required by the Listing Rules we have reviewed the directors’
statement regarding the appropriateness of the going concern basis of
accounting contained within Note 1 to the financial statements and the
directors’ statement on the longer-term viability of the Group contained
within the strategic report on page 34.

We have nothing material to add or draw attention to in relation to:

– the directors’ confirmation on page 34 that they have carried out a

robust assessment of the principal risks facing the Group, including
those that would threaten its business model, future performance,
solvency or liquidity;

– the disclosures on pages 36-37 that describe those risks and explain

how they are being managed or mitigated;

– the directors’ statement in Note 1 to the financial statements about
whether they considered it appropriate to adopt the going concern
basis of accounting in preparing them and their identification of any
material uncertainties to the Group’s ability to continue to do so over
a period of at least twelve months from the date of approval of the
financial statements;

– the director’s explanation on page 34 as to how they have assessed
the prospects of the Group, over what period they have done so and
why they consider that period to be appropriate, and their statement
as to whether they have a reasonable expectation that the Group will
be able to continue in operation and meet its liabilities as they fall due
over the period of their assessment, including any related disclosures
drawing attention to any necessary qualifications or assumptions.

We agreed with the directors’ adoption of the going concern basis of
accounting and we did not identify any such material uncertainties.
However, because not all future events or conditions can be predicted,
this statement is not a guarantee as to the Group’s ability to continue as a
going concern.

Independence
We are required to comply with the Financial Reporting Council’s
Ethical Standards for Auditors and we confirm that we are independent
of the Group and we have fulfilled our other ethical responsibilities in
accordance with those standards. We also confirm we have not provided
any of the prohibited non-audit services referred to in those standards.

92 Man Group plc Annual Report 2015

Our assessment of risks of material misstatement
The assessed risks of material misstatement described below are those that had the greatest effect on our audit strategy, the allocation of resources
in the audit and directing the efforts of the engagement team.

Risk

How the scope of our audit responded to the risk

Impairment of goodwill
As at 31 December 2015, total goodwill on the balance sheet amounted
to $907m (2014: $936m), which equates to 27% (2014: 28%) of total
assets.

The Group’s assessment of whether there is an impairment of goodwill
within each of the four identified cash generating units (“CGUs” or
investment engines) is a judgemental process. This requires estimates
concerning future cash flows, multiples, growth rates based upon
management’s view of future business prospects, investment
performance and the associated discount rates.

At the half year there was a material impairment to the goodwill of the
FRM CGU of $41m; therefore this CGU has been a particular area of
focus. In addition, as a result of the acquisition of Numeric in 2014
and its growth and integration within the wider business during 2015,
management have reassessed their cost allocation model to reflect the
costs allocated to the different CGUs. The cost allocations are necessarily
subjective and accordingly this creates audit risk.

We used our modelling experts to assess the principles and integrity of
the goodwill model to determine whether it was structured appropriately.

We worked with our valuation specialists to challenge the key
assumptions used in the goodwill model including the discount rate
and the multiples applied to the separate CGUs by comparing these
assumptions against industry benchmarks.

We compared the discount rate used by the Group to reflect its cost of
capital to that used by entities with similar risk profiles and independently
recalculated the Group’s cost of capital.

We considered the accuracy of the cash flow forecasts based on our
understanding of the future prospects of the business by:
– following a series of discussions with key management across each of

the CGUs;

– performing a retrospective review of the accuracy of previous forecasts;
– agreeing key historical inputs to audited data; and
– by challenging management where any conflicting evidence was

See Note 13 to the financial statements which gives further detail in
relation to the Goodwill balance.

obtained.

We performed an independent sensitivity analysis over key assumptions
to determine the impact of changes to those assumptions to the value in
use of each CGU, and hence to identify if such changes would trigger a
potential impairment.

As an additional data point, we recalculated management’s reconciliation
of the total valuation of the CGUs to the market value of the Group based
upon the share price at year end.

Further, we discussed the basis of the cost reallocation with management
and performed an independent analysis over a sample of the business
units in question to assess whether the revised allocation was
appropriate.

Revenue recognition
To record management and performance fee transactions, the Group
has numerous manual processes in place. In addition, there are multiple
service providers that add to the intricacy of the process.

We performed detailed walkthroughs of the revenue control processes
and tested the design and implementation of key controls identified
during this process.

Furthermore, the accuracy and completeness of the management
and performance fees depend on the effective communication of any
changes to underlying agreements between several parties.

We have substantively tested in excess of 500 revenue samples by
independently assessing the fee based on underlying legal documents
and independent valuation reports, and comparing this to the fee
recorded by management.

As a result of the complexity of the transactions and multiple interactions
required, there is no standardised process across the Group. This creates
a risk that revenue is not recorded or not recognised in line with the latest
governing documents.

We performed additional procedures on the underlying legal documents
given to us by management to determine whether they were the most
up-to-date documents for the time period tested.

Further explanation is included within Note 3 to the financial statements.

Man Group plc Annual Report 2015 93

FINANCIAL STATEMENTS
I N D E P E N D E N T A U D I T O R ’ S R E P O R T T O T H E M E M B E R S
O F M A N G R O U P P L C C O N T I N U E D

Risk

How the scope of our audit responded to the risk

Completeness and accuracy of revenue rebates and
distribution costs
Revenue is recorded net of rebates due to investors whilst fees paid to
intermediaries for distribution services are recorded within distribution
costs.

The Group has relationships with more than 1,000 intermediaries and
clients. The recording of these balances is based on highly manual
processes and is reliant on effective communication between multiple
areas of the business on a case by case basis when agreements are
reached. Hence there is an increased risk of error within this balance,
specifically that the liability is not recorded.

Additionally, many of the accruals are aged, as it can take a long period
of time to finalise negotiations. As a result, there is an increased risk that
the liabilities recorded are not valid.

We performed detailed walkthroughs of the rebate and commission
control processes and assessed the design and implementation of the
current control environment.

For a sample of clients, we have independently recalculated the
rebate and/or distribution fees based on underlying legal documents
and supporting valuations. We have assessed the year end listing of
rebate and distribution cost liabilities to determine whether any appear
unfounded. For a sample of investors and intermediaries, we have
determined whether an accrual should be recognised at year end based
on agreements with the client to check the completeness of the year end
accrual. Furthermore, we have tested all distribution payments made
during January that individually exceed $50,000 to determine whether
they have been recorded in the correct period.

Consolidation of the Group’s investments
The Group holds investments in a number of funds which it manages,
as described in Note 16. The accounting for the investments requires
judgment in determining whether power and control exists and hence
whether investments are held on the balance sheet at fair value or are
consolidated, as required by IFRS 10 Consolidated Financial Statements.
As a result of this assessment, $213m (2014: $0m) in net assets have
been consolidated on a line by line basis within the Group’s balance
sheet, $119m (2014: $153m) recorded as net non-current assets held for
sale and $269m (2014: $307m) as investments in fund products and other
investments. Together, these items represent 27% (2014: 19%) of the
Group’s net assets.

See Note 16 to the financial statements which gives further detail in
relation to the Group’s investments.

We performed a walkthrough of the processes by which the Group
controls these investment decisions and how these investments are
subsequently monitored for consolidation triggers and recorded. We also
tested the design and implementation of the key controls in operation
during the year.

We independently assessed whether a sample of funds held at year end
should be consolidated. This included 100% testing of the funds included
in the listing maintained by management of those funds considered to be
most “at risk” of potential consolidation. We assessed each fund included
in the listing referred to above by considering the size of the holding
per custodian statements as well as the contractual arrangements. In
particular we focussed on investments in collateralised loan obligations
(“CLOs”) where control is not necessarily dictated by percentage
ownership of equity shares.

Last year our audit report included three other risks which are not
included in our audit report this year: IFRS 12 disclosure requirements
for investments in funds (which was a new reporting requirement in
2014 and has now been implemented), acquisition accounting (as there
have been no significant acquisitions during the year) and taxation (as
the tax provisions have largely been finalised and methodology for the
recognition of the deferred tax asset was analysed in detail in the prior
year).

In addition, we have included a new risk in 2015 relating to revenue
rebates and distribution costs. This is a complex area of accounting and
is highly manual, thus susceptible to error. Management implemented
a number of new processes and controls around the monitoring and
recording of these costs during the year, hence there was increased audit
effort in considering these new processes.

The description of risks above should be read in conjunction with the
significant issues considered by the Audit and Risk Committee discussed
on page 59.

These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.

Our application of materiality
We define materiality as the magnitude of misstatement in the financial
statements that makes it probable that the economic decisions of a
reasonably knowledgeable person would be changed or influenced.
We use materiality both in planning the scope of our audit work and in
evaluating the results of our work.

We determined materiality for the Group to be $22.0 (2014: $19.5m). As
performance fees are variable and can fluctuate significantly year on year,
we have taken an average of the current year and prior year adjusted
profit before tax (in order to create a more stable basis) and calculated
materiality to be five per cent of this figure. The adjusted profit before
tax number is explained in Note 2 to the financial statements, and the
calculated materiality is below 1% of equity. Adjusted profit before tax is a
relevant benchmark as it is a key figure used by analysts in assessing the
performance of the business.

We agreed with the Audit and Risk Committee that we would report
to the Committee all audit differences in excess of $440,000 (2014:
$400,000), as well as differences below that threshold that, in our view,
warranted reporting on qualitative grounds. We also report to the Audit
and Risk Committee on disclosure matters that we identified when
assessing the overall presentation of the financial statements.

An overview of the scope of our audit
Our group audit was scoped by obtaining an understanding of the Group
and its environment, including group-wide controls, and assessing the
risks of material misstatement at the group level. This is consistent with
the approach adopted in the prior year. Based on that assessment,
we focused our group audit scope primarily on the audit work at seven
geographical locations. This included the full audit of fifteen subsidiaries
across the UK, the US, Switzerland, Australia, Ireland, the Cayman
Islands and the Channel Islands. A further fourteen subsidiaries across
the UK, the Channel Islands and the US were subject to an audit of
specified account balances where the extent of our testing was based
on our assessment of the risks of material misstatement and of the
materiality of the Group’s operations at those locations. These seven
geographical locations represent the principal business units and
account for 96% (2014: 98%) of the Group’s total assets, 99% (2014:

94 Man Group plc Annual Report 2015

In particular, we are required to consider whether we have identified
any inconsistencies between our knowledge acquired during the audit
and the directors’ statement that they consider the annual report is
fair, balanced and understandable and whether the annual report
appropriately discloses those matters that we communicated to the Audit
and Risk Committee which we consider should have been disclosed.
We confirm that we have not identified any such inconsistencies or
misleading statements.

Respective responsibilities of directors and auditor
As explained more fully in the Directors’ Responsibilities Statement, the
directors are responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view. Our responsibility is
to audit and express an opinion on the financial statements in accordance
with applicable law and International Standards on Auditing (UK and
Ireland). We also comply with International Standard on Quality Control
1 (UK and Ireland). Our audit methodology and tools aim to ensure that
our quality control procedures are effective, understood and applied. Our
quality controls and systems include our dedicated professional standards
review team and independent partner reviews.

This report is made solely to the company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our
audit work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
company and the company’s members as a body, for our audit work, for
this report, or for the opinions we have formed.

Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures
in the financial statements sufficient to give reasonable assurance that the
financial statements are free from material misstatement, whether caused
by fraud or error. This includes an assessment of: whether the accounting
policies are appropriate to the Group’s and the Parent Company’s
circumstances and have been consistently applied and adequately
disclosed; the reasonableness of significant accounting estimates made
by the directors; and the overall presentation of the financial statements.
In addition, we read all the financial and non-financial information in the
annual report to identify material inconsistencies with the audited financial
statements and to identify any information that is apparently materially
incorrect based on, or materially inconsistent with, the knowledge
acquired by us in the course of performing the audit. If we become aware
of any apparent material misstatements or inconsistencies we consider
the implications for our report.

Mark FitzPatrick (Senior statutory auditor)
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
London, UK
24 February 2016

97%) of the Group’s revenue and 98% (2014: 96%) of the Group’s profit
before tax. They were also selected to provide an appropriate basis for
undertaking audit work to address the risks of material misstatement
identified above. Our audit work at the twenty nine subsidiaries was
executed at levels of materiality applicable to each individual entity
which were lower than Group materiality and ranged from $370,000 to
$22m (2014: $250,000 to $19m). At the Parent Company level we also
tested the consolidation process and carried out analytical procedures
to confirm our conclusion that there were no significant risks of material
misstatement of the aggregated financial information of the remaining
components not subject to audit or audit of specified account balances.

The group audit team continued to follow a programme of planned visits
that has been designed so that the Senior Statutory Auditor or a senior
member of the group audit team visits each of the locations where the
group audit scope was focused at least once a year. During the current
year visits were made to New York, Boston, Switzerland and Australia.
Books and records for subsidiaries located within Ireland, the Cayman
Islands and the Channel Islands are maintained within the UK and are
audited by the group audit team.

Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
– the part of the Directors’ Remuneration Report to be audited has been
properly prepared in accordance with the Companies Act 2006; and
– the information given in the Strategic Report and the Directors’ Report
for the financial year for which the financial statements are prepared is
consistent with the financial statements.

Matters on which we are required to report by exception
Adequacy of explanations received and accounting records
Under the Companies Act 2006 we are required to report to you if, in
our opinion:
– we have not received all the information and explanations we require

for our audit; or

– adequate accounting records have not been kept by the Parent

Company, or returns adequate for our audit have not been received
from branches not visited by us; or

– the Parent Company financial statements are not in agreement with the

accounting records and returns.

We have nothing to report in respect of these matters.

Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our
opinion certain disclosures of directors’ remuneration have not been
made or the part of the Directors’ Remuneration Report to be audited
is not in agreement with the accounting records and returns. We have
nothing to report arising from these matters.

Corporate Governance Statement
Under the Listing Rules we are also required to review part of the
Corporate Governance Statement relating to the company’s compliance
with certain provisions of the UK Corporate Governance Code. We have
nothing to report arising from our review.

Our duty to read other information in the Annual Report
Under International Standards on Auditing (UK and Ireland), we are
required to report to you if, in our opinion, information in the annual
report is:
– materially inconsistent with the information in the audited financial

statements; or

– apparently materially incorrect based on, or materially inconsistent

with, our knowledge of the Group acquired in the course of performing
our audit; or

– otherwise misleading.

Man Group plc Annual Report 2015 95

FINANCIAL STATEMENTS
G R O U P I N C O M E S T A T E M E N T

Revenue:

Gross management and other fees
Performance fees

Income or gains on investments and other financial instruments
Third-party share of losses relating to interests in consolidated funds
Revaluation of contingent consideration
Distribution costs
Asset servicing
Amortisation of acquired intangible assets
Compensation
Other costs
Impairment of FRM goodwill
Share of after tax profit of associates
Loss on disposal of subsidiaries and other interests
Finance expense
Finance income

Profit before tax

Taxation expense

Statutory profit for the year attributable to owners of the Parent Company

Earnings per share:
Basic (cents)
Diluted (cents)

Note

3
3

4
16.3
2
5
6
13
7
8
13
20
2
9
9

Year ended
31 December
2015

Year ended
31 December
2014

833
302

810
340

1,135

1,150

15
9
(62)
(77)
(32)
(92)
(462)
(181)
(41)
3
–
(34)
3

184

(13)

171

27
–
17
(104)
(27)
(72)
(394)
(202)
–
9
(4)
(19)
3

384

(19)

365

10.1
10.0

20.8
20.5

Adjusted profit before tax

400

481

G R O U P S T A T E M E N T O F C O M P R E H E N S I V E I N C O M E

Statutory profit for the year attributable to owners of the Parent Company
Other comprehensive (expense)/income:
Remeasurements of post-employment benefit obligations
Current tax credited on pension revaluation
Deferred tax credited on pension revaluation

Items that will not be reclassified to profit or loss

Available for sale investments:

Transfers from Group statement of comprehensive income upon sale or impairment

Cash flow hedges:

Valuation losses taken to equity
Transfer to Group income statement
Deferred tax credited on cash flow hedge movements

Net investment hedge
Foreign currency translation
Recycling of FX revaluation on liquidation of subsidiaries

Items that may be subsequently reclassified to profit or loss

Other comprehensive expense for the year (net of tax)

Total comprehensive income for the year attributable to owners of the Parent Company

Year ended
31 December
2015

Year ended
31 December
2014

171

365

(21)
4
2

(15)

(1)

(9)
18
2
14
(21)
(1)

(13)

158

(21)
4
–

(17)

–

(16)
(17)
3
13
(24)
–

(41)

(58)

307

96 Man Group plc Annual Report 2015

G R O U P B A L A N C E S H E E T

Assets
Cash and cash equivalents
Fee and other receivables
Investments in fund products and other investments
Pension asset
Investments in associates
Leasehold improvements and equipment
Goodwill and acquired intangibles
Other intangibles
Deferred tax assets1

Non-current assets held for sale

Total assets

Liabilities
Trade and other payables
Provisions
Current tax liabilities
Third-party interest in consolidated funds
Borrowings
Deferred tax liabilities1

Non-current liabilities held for sale

Total liabilities

Net Assets

Equity

At
31 December
2015

At
31 December
2014

Note

15
17
16
24
20
21
13
14
10

18
19

16
15
10

607
303
598
48
30
44
1,497
14
59

3,200

188

3,388

660
58
32
136
149
69

1,104

1,173

2,215

738
396
307
45
30
52
1,582
13
47

3,210

186

3,396

581
65
51
–
149
83

929

962

2,434

Capital and reserves attributable to the owners of the Parent Company

2,215

2,434

Note:
1 The deferred tax assets and deferred tax liabilities, which were presented on a net basis on the face of the Group balance sheet in the Annual Report for the year ended

31 December 2014, have been reclassified in the comparative to provide the gross figures as included in Note 10.

The financial statements were approved by the Board of Directors and authorised for issue on 24 February 2016 and signed on its behalf by:

Emmanuel Roman
Chief Executive Officer

Jonathan Sorrell
Chief Financial Officer

Man Group plc Annual Report 2015 97

FINANCIAL STATEMENTS
G R O U P C A S H F L O W S T A T E M E N T

Cash flows from operating activities
Profit for the period
Adjustments for:
Income tax
Net finance expense
Share of after tax profits of associates
Revaluation of contingent consideration
Loss on disposal of subsidiaries and other interests
Reassessment of the litigation provision
Depreciation and impairment of leasehold improvements and equipment
Amortisation of acquired intangible assets
Amortisation of other intangible assets
Share-based payment expense
Fund product based payment charge1
Impairment of FRM goodwill
Defined benefit pension plans (including repayments/(contributions))
Other non-cash movements

Changes in working capital:
Decrease in receivables
Increase in other financial assets2,3
Decrease in payables

Cash generated from operations
Interest paid
Income tax paid

Cash flows from operating activities

Cash flows from investing activities
Purchase of leasehold improvements and equipment
Purchase of other intangible assets
Acquisition of subsidiaries and other intangibles, net of cash acquired
Payment of contingent consideration in relation to acquisitions
Interest received
Dividends received from associates

Cash flows from investing activities

Cash flows from financing activities
Proceeds from issue of ordinary shares
Proceeds from borrowings (net of costs)
Purchase of own shares by the Employee Trusts and Partnerships
Share repurchase programme (including costs)
Dividends paid to Company shareholders

Cash flows from financing activities

Net decrease in cash
Cash at the beginning of the year

Cash at year end3

Year ended
31 December
2015

Year ended
31 December
2014

Note

171

365

13
31

(3)
62
–
–
13
92
5
18
35
41
(27)
16

19
16
(9)
(17)
4
(6)
21
72
16
11
30
–
3
(16)

467

509

101
(118)
(30)

420
(16)
(49)

355

(5)
(7)
(38)
(46)
2
3

(91)

7
–
(33)
(176)
(193)

(395)

(131)
738

607

12
(139)
(242)

140
(3)
(13)

124

(3)
(9)
(227)
(8)
3
10

(234)

2
149
(16)
(116)
(163)

(144)

(254)
992

738

Notes:
1

In the current year the fund product based payment charge has been separately identified as a non-cash charge, a change in presentation within operating cash flows compared
to the prior year when this was included within changes in working capital. The directors consider that this better reflects the nature of these movements.

2 For the comparative period ‘Purchase of investments in fund products for deferred compensation awards and other investments’ and ‘Net proceeds from sale of investments

in fund products for deferred compensation awards and other investments’ have been reclassified from investing activities to ‘Increase in other financial assets’ within operating
activities. The directors consider that this better reflects the nature of these cash flows and matches these with the related underlying transactions.
Includes $21 million (2014: nil) of restricted cash relating to consolidated fund entities (Note 16).

98 Man Group plc Annual Report 2015

G R O U P S T A T E M E N T O F
C H A N G E S I N E Q U I T Y

At beginning of the year
Profit for the year
Other comprehensive (expense)/income

Total comprehensive income for the year

Share-based payments
Purchase of own shares by the Employee Trusts
Share repurchase programme (including costs)
Dividends

Equity attributable to owners of the Parent
Year ended 31 December 2015

Equity attributable to owners of the Parent
Year ended 31 December 2014

Share capital
and capital
reserves

Revaluation
reserves
and retained
earnings

Total equity

1,193
–
–

–

7
–
–
–

1,241
171
(13)

158

15
(30)
(176)
(193)

2,434
171
(13)

158

22
(30)
(176)
(193)

Share capital
and capital
reserves

1,191
–
–

–

2
–
–
–

Revaluation
reserves
and retained
earnings

1,216
365
(58)

307

11
(14)
(116)
(163)

Total equity

2,407
365
(58)

307

13
(14)
(116)
(163)

At year end (Note 23)

1,200

1,015

2,215

1,193

1,241

2,434

The proposed final dividend would reduce shareholders’ equity by $81 million (2014: $106 million) subsequent to the balance sheet date.

Details of share capital and capital reserves, revaluation reserves and retained earnings and related movements are included in Note 23.

Man Group plc Annual Report 2015 99

FINANCIAL STATEMENTS
N O T E S T O T H E G R O U P F I N A N C I A L S T A T E M E N T S

1 . B A S I S O F P R E P A R A T I O N

Accounting policies
The audited consolidated financial information has been prepared in accordance with International Financial Reporting Standards (IFRSs) and
interpretations (IFRICs) as adopted by the EU and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. Man’s
principal accounting policies have been consistently applied across the Group in the preparation of the financial statements. Accounting policies
are included in the relevant sections, and significant policies are provided below. The impact, if any of new accounting standards and amendments
applicable to the year ended 31 December 2015 and accounting standards that are not yet effective are outlined below.

Consolidated group and presentation currency
The consolidated group is Man Group plc (the Company) and its subsidiaries (together the Group or Man). The stand-alone Parent Company financial
statements of Man Group plc have been included as separate financial statements, starting on page 135. The majority of revenues, assets, liabilities
and funding are denominated in United States Dollars (USD) and therefore Man’s presentation currency is USD.

The consolidated financial information contained within these financial statements incorporates the results, cash flows and financial position of
the Company and its subsidiaries for the year to 31 December 2015 (Note 32). Subsidiaries are entities (including structured entities) controlled by
Man and are consolidated from the date on which control is transferred to Man until the date that control ceases. Control exists when Man has the
power to direct the relevant activities, exposure to significant variable returns and the ability to utilise power to affect those returns. All intercompany
transactions, balances, income and expenses between Group entities are eliminated on consolidation.

Business combinations (acquisitions) are accounted for using the acquisition method. The cost of an acquisition is measured as the fair value at the
acquisition date of assets transferred, liabilities incurred, and equity instruments issued by the Group. The fair value of an acquisition is calculated at
the acquisition date by recognising the acquiree’s identifiable assets and liabilities at their fair values at that date. Costs relating to acquisitions are
recognised in the Group income statement as incurred. The acquisition date is the date on which Man effectively obtains control of the acquiree. Any
contingent consideration will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration
will be recognised in the Group income statement and classified as an adjusting item.

Man’s relationship with independent fund entities
Man acts as the investment manager/advisor to fund entities. Man assesses such relationships on an ongoing basis to determine whether each fund
entity is controlled and therefore consolidated into the Group’s results. Having considered all significant aspects of Man’s relationships with fund
entities, the directors are of the opinion that, although Man manages the assets of certain fund entities, where Man does not hold an investment in
the fund entity the characteristics of control are not met, and that for most fund entities: the existence of independent boards of directors at the fund
entities; rights which allow for the removal of the investment manager/advisor; the influence of investors; limited exposure to variable returns; and the
arm’s length nature of Man’s contracts with the fund entities, indicate that Man does not control the fund entities and their associated assets, liabilities
and results should not be consolidated into the Group financial statements. Assessment of the control characteristics for all relationships with fund
entities led to the consolidation of nine fund entities for the year ended 31 December 2015 (2014: five), as detailed in Note 16. An understanding of the
aggregate funds under management (FUM) and the fees earned from the fund entities is relevant to an understanding of Man’s results and earnings
sustainability and this information is provided in the Chief Financial Officer’s review on pages 28 and 30.

Judgemental areas and accounting estimates
The determination of fair values for contingent consideration in relation to recent acquisitions and the valuation of goodwill and acquired intangibles
(Note 13), whether the Group controls certain funds through its investments in fund products and is required to consolidate them (Note 16.3) and
classification of adjusting items (Note 2) are the most significant areas of judgement and have been an area of focus for the Group Board, and in
particular the Audit and Risk Committee, during the year. The report of the Chairman of the Audit and Risk Committee discusses the involvement of
the Committee in this evaluation on page 59.

Going concern
Man’s business activity is discussed on pages 1 to 42, together with the significant risk factors (pages 34 to 37). Man’s liquidity and capital positions
are set out in Note 15 and 23 respectively. The directors monitor Man’s capital and liquidity positions and forecasts throughout the year, and in
addition they have approved a budget, medium-term financial plan, and a capital and liquidity plan, which cover the foreseeable future and include
rigorous analysis of stressed capital and liquidity scenarios. The directors have concluded that there is a reasonable expectation that Man has
adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Group and Parent financial statements have been
prepared on a going concern basis using the historical cost convention, except for the measurement at fair value of certain financial instruments that
are held at fair value through profit or loss or available-for-sale. The directors have also made a longer term viability statement, as set out on page 34.

Financial reporting controls
The Group’s systems of internal control aim to safeguard assets, ensure that proper accounting records are maintained, and ensure that the financial
information used in the business and published externally is robust and reliable. The Group’s systems of internal controls, including financial reporting
controls, comply with the FRC’s ‘Guidance on Risk Management, Internal Control and Related Financial and Business Reporting’. The Corporate
governance report is provided on pages 49 to 56.

100 Man Group plc Annual Report 2015

1 . B A S I S O F P R E P A R A T I O N C O N T I N U E D

Significant accounting policies schedule

Policy

Revenue
Taxation
Goodwill and acquired intangibles
Investments in fund products
Deferred compensation arrangements
Pension benefits

Note

Page

3
10
13
16
22
24

102
105-106
108
114-116
119
123-124

Impact of new accounting standards
A number of amendments to existing standards and interpretations have been issued, some of which are mandatory for the year beginning 1 January
2015, with the remaining becoming effective in future periods.

The Annual Improvements to IFRSs 2010–2012 and 2011–2013 Cycle were adopted by Man in the current year, which have not had a significant impact.

There are no new or revised standards and interpretations issued (as endorsed by the EU) but not yet effective which are expected to have a
significant impact on the Group financial statements of Man.

2 . A D J U S T E D P R O F I T B E F O R E T A X

Statutory profit before tax is adjusted to give a better understanding of the underlying profitability of the business. The directors consider that the
Group’s profit is most meaningful when considered on a basis which excludes acquisition and disposal related items (including non-cash items such
as amortisation of purchased intangible assets and deferred tax movements relating to the recognition of tax losses in the US), impairment of assets,
restructuring costs, and certain non-recurring gains or losses, which therefore reflects the recurring revenues and costs that drive the Group’s cash
flow. The directors are consistent in their approach to the classification of adjusting items period to period, maintaining an appropriate symmetry
between losses and gains and the reversal of any accruals previously classified as adjusting items. These are explained in detail either below or in the
relevant note.

Statutory profit before tax
Adjusting items:
Litigation, regulatory and other settlements
Reassessment of the litigation provision
Acquisition and disposal related:

Amortisation of acquired intangible assets
Impairment of FRM goodwill
Revaluation of contingent consideration
Unwind of contingent consideration discount
Other costs – professional fees and other integration costs
Compensation – restructuring
Recycling of FX revaluation to the Group income statement on liquidation of subsidiaries
Loss on disposal of subsidiaries and other interests

Other costs – restructuring

Adjusted profit before tax
Tax on adjusted profit1

Adjusted profit after tax

Year ended
31 December
2015

Year ended
31 December
2014

Note

184

384

13
13
13
9
8
7
8

(6)
–

92
41
62
17
4
–
(1)
–
7

400
(39)

361

24
(6)

72
–
(17)
7
9
3
–
4
1

481
(46)

435

Note:
1 The difference of $26 million (2014: $27 million) between tax on statutory profit and tax on adjusted profit is made up of a tax credit of $15 million (2014: $19 million credit) on

adjusting items and a tax credit of $11 million (2014: $8 million) relating to the recognition of a deferred tax asset which is classified as an adjusting item (Note 10).

The credit of $6 million to litigation, regulatory and other settlements in 2015 relates to an insurance recovery of prior year costs incurred in association
with legal claims, which were included as an adjusting item in previous years, and the 2014 charge relates to legal claims which are partially linked to
this recovery. In 2014 the $6 million reduction in the litigation provision relates to reassessment of potential legal claims (Note 19).

Amortisation of acquired intangibles primarily relates to investment management contracts and brands recognised on the acquisition of GLG, FRM
and Numeric. Amortisation charges relating to Numeric of $18 million are included for a full year in 2015, and $7 million relates to the newly acquired
Silvermine, NewSmith and BAML fund of funds business intangibles (Note 13).

The FRM goodwill was impaired by $41 million during the first half of the year, largely as a result of lower sales and higher redemptions of fund of funds
products than anticipated (Note 13).

Man Group plc Annual Report 2015 101

FINANCIAL STATEMENTS
N O T E S T O T H E G R O U P F I N A N C I A L S T A T E M E N T S
C O N T I N U E D

2 . A D J U S T E D P R O F I T B E F O R E T A X C O N T I N U E D

The revaluation of contingent consideration is an adjustment to the fair value of expected acquisition earn-out payments. The charge of $62 million in
the current year primarily relates to Numeric, with a $61 million increase in the contingent consideration creditor as a result of increased management
fee margins compared to forecast, as well as higher than forecast FUM due to flows and performance in 2015. The revaluation credit in 2014 relates to
FRM, primarily as a result of lower than anticipated net management fee run rates since acquisition.

The unwind of the discount on contingent consideration in 2015 primarily relates to Numeric ($12 million), with the remainder arising from the FRM,
Silvermine, NewSmith, BAML fund of funds and Pine Grove contingent consideration, and is included within finance expense (Note 9).

Acquisition related professional fees and other integration costs of $4 million relate to the acquisitions of the Silvermine, NewSmith, BAML fund of
funds and Numeric businesses. In 2014 the acquisition related compensation and other costs relate to staff termination, legal and other advisory fees
relating to the Numeric and Pine Grove transactions, as well as the costs of integrating our operating platforms. Compensation costs incurred as part
of restructuring are accounted for in full at the time the obligation arises, following communication of the formal plan, and include payments in lieu of
notice, enhanced termination costs, and accelerated share-based payment and fund product based charges.

In 2015, some of the Group’s foreign subsidiaries were liquidated, which had accumulated foreign currency translation reserves of $1 million at the
date of liquidation. Upon liquidation of these subsidiaries the related foreign currency translation gain was recycled to the Group income statement.
The $4 million loss on disposal of subsidiaries and other interests in 2014 is the result of the Group selling two of its subsidiaries to local management
in May 2014.

Other restructuring costs principally relate to an increase in the onerous property lease provision relating to Riverbank House (our main London office
and headquarters), as a result of a contractual market-linked rental increase triggered in 2015, consistent with treatment of this onerous lease as an
adjusting item upon initial recognition. In 2014, the $1 million of restructuring costs relates to an onerous lease on our New York property.

3 . R E V E N U E

Fee income is Man’s primary source of revenue, which is derived from the investment management agreements that we have in place with the fund
entities. Fees are generally based on an agreed percentage of the valuation of net asset value (NAV) or FUM and are typically charged in arrears.
Management fees net of rebates, which include all non-performance related fees and interest income from loans to fund products, are recognised in
the year in which the services are provided.

Performance fees net of rebates relate to the performance of the funds managed during the year and are recognised when the quantum of the fee
can be estimated reliably and has crystallised. This is generally at the end of the performance period or upon early redemption by a fund investor. Until
the performance period ends market movements could significantly move the NAV of the fund products. For AHL, GLG and FRM strategies, Man will
typically only earn performance fee income on any positive investment returns in excess of the high water mark, meaning we will not be able to earn
performance fee income with respect to positive investment performance in any year following negative performance until that loss is recouped, at
which point a fund investor’s investment surpasses the high water mark. Numeric performance fees are earned only when performance is in excess
of a predetermined strategy benchmark (positive alpha), with performance fees being generated for each strategy either based on achieving positive
alpha (which resets at a predetermined interval, i.e. every one to three years) or exceeding high water mark.

4 . I N C O M E O R G A I N S O N I N V E S T M E N T S A N D O T H E R F I N A N C I A L
I N S T R U M E N T S

The net gains on investments and other financial instruments primarily relate to gains on seeding investments.

5 . D I S T R I B U T I O N C O S T S

Distribution costs

Year ended
31 December
2015

Year ended
31 December
2014

104

Distribution costs paid to external intermediaries are directly related to their marketing activity and the investors serviced by them. The distribution
expense is therefore variable with FUM and the associated management fee income.

Distribution costs of $77 million (2014: $104 million) comprise investor servicing fees of $74 million (2014: $89 million) and product placement fees
of $3 million (2014: $15 million). Servicing fees, which are paid to intermediaries for ongoing investor servicing and are expensed as incurred, have
decreased primarily as a result of the continued mix shift towards institutional assets, particularly in the quant alternatives category, and the roll-off
of guaranteed product FUM. Placement fees, which are paid for product launches or sales and are capitalised and amortised over the expected
investment holding period (Note 14), have reduced due to limited new payments in recent years and the roll-off of amortisation of the previously
capitalised balances.

102 Man Group plc Annual Report 2015

6 . A S S E T S E R V I C I N G

Asset servicing includes custodial, valuation, fund accounting and registrar functions performed by third parties under contract to Man, on behalf of
the funds. The cost of these services is based on FUM, and vary depending on transaction volumes, the number of funds, and fund NAVs.

7 . C O M P E N S A T I O N

Salaries
Variable cash compensation
Share-based payment charge
Fund product based payment charge
Social security costs
Pension costs

Compensation costs – before adjusting items
Acquisition related costs (Note 2)

Total compensation costs

Year ended
31 December
2015

Year ended
31 December
2014

158
212
18
35
33
6

462
–

462

136
174
12
30
33
6

391
3

394

Compensation is our largest cost and an important component of our ability to retain and attract talent at Man. In the short term the variable
component of compensation adjusts with revenues and profitability of the relevant business units. In the medium term the active management of
headcount can reduce fixed compensation, if required.

Compensation costs in total are $462 million (2014: $391 million), before adjusting items, or 43% of net revenue (2014: 36%). Net revenue is defined
as gross management and other fees, performance fees, income or gains on investments and other financial instruments, share of after tax profit of
associates, less distribution costs. Salaries and variable cash compensation are charged to the Group income statement in the year in which they are
incurred, and include partner drawings.

The increase in total compensation costs is due to the increase in headcount as a result of the Silvermine and NewSmith acquisitions (Note 13), as well
as inclusion of Numeric and Pine Grove for the full year in 2015, a less favourable hedged Pounds sterling to USD rate in 2015 (1.66) compared to the
hedged rate in 2014 (1.52), and higher GLG performance related compensation. The compensation structure for the GLG equity long short strategies
teams is based on gross profits, which in 2015 were in excess of performance fees generated by the strategies given they started the year below high
water mark. Additionally, compensation costs include an increased year-on-year charge of $5 million as a result of the 2014 change in application of
the accounting policy for deferred compensation, which impacts the charges relating to deferred share and fund awards granted from 2015 onwards.

The accounting for share-based and fund product based compensation arrangements is detailed in Note 22. The unamortised deferred
compensation at year end is $49 million (2014: $22 million), largely increasing as a result of the change in application of accounting policy for deferred
awards which weights the related vesting expense more in the future compared to previously, which has a weighted average remaining vesting period
of 2.1 years (2014: 1.3 years).

Pension costs relate to Man’s defined contribution and defined benefit plans (Note 24).

Man Group plc Annual Report 2015 103

FINANCIAL STATEMENTS
N O T E S T O T H E G R O U P F I N A N C I A L S T A T E M E N T S
C O N T I N U E D

8 . O T H E R C O S T S

Occupancy
Technology and communication
Temporary staff, recruitment, consultancy and managed services
Legal fees and other professional fees
Benefits
Travel and entertainment
Audit, accountancy, actuarial and tax fees
Insurance
Marketing and sponsorship
Other cash costs, including irrecoverable VAT

Total other costs before depreciation and amortisation and adjusting items

Depreciation and amortisation

Other costs – before adjusting items
Acquisition and disposal related (Note 2)
Litigation, regulatory and other settlements (Note 2)
Reassessment of litigation provision (Note 2)
Restructuring (Note 2)
Recycling of FX revaluation on liquidation of subsidiaries

Total other costs

Year ended
31 December
2015

Year ended
31 December
2014

34
34
20
17
13
12
8
7
6
10

161

177
4
(6)
–
7
(1)

181

33
32
25
13
12
9
8
7
6
5

150

174
9
24
(6)
1
–

202

Other costs, before depreciation and amortisation and adjusting items, are $161 million in the year, compared to $150 million in the prior year, which
reflects the impact of the less favourable hedged Pounds sterling to USD rate in 2015 and, to a lesser extent, a full year of other costs relating to prior
year acquisitions and a portion of the Silvermine and NewSmith businesses acquired in 2015 (Note 13), partially offset by continued efforts to remain
disciplined on costs which has resulted in a lower underlying other costs base compared to 2014.

Auditors’ remuneration, including advisory and professional services, is disclosed in more detail in the Corporate governance section on page 60.

9 . F I N A N C E E X P E N S E A N D F I N A N C E I N C O M E

Finance income:

Interest on cash deposits and US Treasury bills

Total finance income

Finance expense:

Interest payable on borrowings
Revolving credit facility costs and other (Note 15)

Total finance expense – before adjusting items

Unwind of contingent consideration discount (Note 2)

Total finance expense

Year ended
31 December
2015

Year ended
31 December
2014

(9)
(8)

(17)

(34)

(3)
(9)

(12)

(7)

(19)

Interest payable on borrowings has increased for the year ended 31 December 2015 due to the inclusion of a full year of interest expense on the notes
issued in September 2014 (Note 15).

104 Man Group plc Annual Report 2015

1 0 . T A X A T I O N

Analysis of tax charge/(credit) for the year:
Current tax:
UK corporation tax on profits of the period
Foreign tax
Adjustments to tax charge in respect of previous periods

Total current tax

Deferred tax:
Origination and reversal of temporary differences
Recognition of US deferred tax asset

Total deferred tax

Total tax charge

Year ended
31 December
2015

Year ended
31 December
2014

37
15
(17)

(11)
(11)

(22)

54
17
(30)

(14)
(8)

(22)

Man is a global business and therefore operates across many different tax jurisdictions. Income and profits are allocated to these different jurisdictions
based on transfer pricing methodologies set in accordance with the laws of the jurisdictions in which we operate. The effective tax rate results from
the combination of taxes paid on earnings attributable to the tax jurisdictions in which they arise. The majority of the Group’s profit was earned in the
UK, Switzerland and the US. The current effective tax rate of 7% (2014: 5%) differs from the underlying rate principally as a result of the incremental
recognition of a US deferred tax asset of $11 million (2014: $8 million), as detailed on page 106, and the reassessment of tax exposures in Europe
during the year, partly offset by the impairment of the FRM goodwill on which no tax relief is received. The effective tax rate is otherwise consistent
with this earnings profile. The effective tax rate on adjusted profits (Note 2) is 10% (2014: 10%).

The tax on Man’s total profit before tax is lower than the amount that would arise using the theoretical effective tax rate applicable to profits/(losses) of
the consolidated companies as follows:

Profit before tax
Theoretical tax charge at UK rate: 20.25% (2014: 21.50%)
Effect of:

Overseas tax rates compared to UK
Adjustments to tax charge in respect of previous periods
Impairment of goodwill and other adjusting items
Share-based payments
Recognition of US deferred tax asset
Other

Total tax charge

Year ended
31 December
2015

Year ended
31 December
2014

184
37

(8)
(17)
9
(2)
(11)
5

384
83

(20)
(30)
(1)
(3)
(8)
(2)

In the current year the adjustments to the tax charge in respect of previous periods largely relates to the reassessment of tax exposures in the UK
and Switzerland. In 2014 this primarily related to the release of $25 million due to reassessment of tax exposures associated with our Asia Pacific
operations.

Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax is calculated at the rates expected to be
applied when the deferred tax asset or liability is realised.

Man Group plc Annual Report 2015 105

FINANCIAL STATEMENTS
N O T E S T O T H E G R O U P F I N A N C I A L S T A T E M E N T S
C O N T I N U E D

1 0 . T A X A T I O N C O N T I N U E D

Movements in deferred tax are as follows:

Deferred tax liability
At 1 January
Credit to the income statement

Deferred tax liability at 31 December

Deferred tax asset
At 1 January
Credit to the income statement
Credit directly to equity
Other currency differences

Deferred tax asset at 31 December

Year ended
31 December
2015

Year ended
31 December
2014

(83)
14

(69)

47
8
4
–

(97)
14

(83)

39
8
2
(2)

The deferred tax liability of $69 million (2014: $83 million) relates to deferred tax arising on acquired intangible assets.

The deferred tax asset of $59 million (2014: $47 million) principally relates to US tax losses and intangible assets of $19 million (2014: $8 million),
defined benefit pension schemes of $9 million (2014: $8 million), employee share schemes of $15 million (2014: $17 million), and tax allowances over
depreciation of $11 million (2014: $14 million). The deferred tax asset income statement credit of $8 million (2014: $8 million) relates to the recognition
of the deferred tax asset in respect of US losses of $11 million (2014: $8 million), a decrease in the deferred tax asset on employee share schemes of
$2 million (2014: $7 million increase), a decrease in the deferred tax asset arising on tax allowances over depreciation of $3 million (2014: $4 million)
and an increase in the deferred tax asset on other temporary differences of $2 million (2014: $3 million decrease in deferred tax liability). The credit to
other revenue reserves of $4 million (2014: $2 million) relates to movements in the pension accrual and unrealised cash flow hedge balance.

The Group has accumulated deferred tax assets in the US of $172 million (2014: $191 million). These assets principally comprise accumulated
operating losses from existing operations and future amortisation of goodwill and intangibles assets generated from acquisitions that will be available
to offset future taxable profits in the US. In the prior year, $8 million of these was recognised for the first time, triggered by the acquisition of Numeric,
which gave rise to a higher degree of certainty that the US business will earn taxable profits in future periods. A deferred tax asset of $19 million has
been recognised on the Group balance sheet in the current year, representing amounts which can be offset against probable future taxable profits,
an increase of $11 million from that recognised at 31 December 2014. Probable future taxable profits are considered to be forecast profits for the
next three years only, consistent with the Group’s business planning horizon. As a result of the recognised deferred tax asset and the remaining
unrecognised available US deferred tax assets of $153 million (2014: $183 million), Man does not expect to pay federal tax on any taxable profits
it may earn in the US for a number of years. Accordingly, any movements in this US tax asset are classified as an adjusting item in Note 2.

1 1 . E A R N I N G S P E R O R D I N A R Y S H A R E ( E P S )

The calculation of basic EPS is based on post-tax profit of $171 million compared to a profit of $365 million in the prior year, and ordinary shares of
1,694,081,544 (2014: 1,754,177,715), being the weighted average number of ordinary shares on issue during the period after excluding the shares
owned by the Man Employee Trusts. For diluted EPS, the weighted average number of ordinary shares in issue is adjusted to assume conversion
of all dilutive potential ordinary shares, being ordinary shares of 1,714,925,166 (2014: 1,778,702,369).

The details of movements in the number of shares used in the basic and dilutive EPS calculation are provided below.

Year ended 31 December 2015

Year ended 31 December 2014

Total
number
(million)

1,756.3
3.5
(59.0)

1,700.8
(22.1)

1,678.7

Total
number
(million)

1,823.7
1.4
(68.8)

1,756.3
(21.1)

1,735.2

Weighted
average
(million)

1,756.3
1.9
(42.0)

1,716.2
(22.1)

1,694.1
17.1
3.7

1,714.9

Weighted
average
(million)

1,823.7
1.1
(45.9)

1,778.9
(24.8)

1,754.1
21.2
3.4

1,778.7

Number of shares at beginning of year
Issues of shares
Repurchase of own shares

Number of shares at period end
Shares owned by Employee Trusts

Basic number of shares
Share awards under incentive schemes
Employee share options

Diluted number of shares

106 Man Group plc Annual Report 2015

1 1 . E A R N I N G S P E R O R D I N A R Y S H A R E ( E P S ) C O N T I N U E D

The reconciliation from EPS to adjusted EPS is given below:

Year ended 31 December 2015

Year ended 31 December 2014

Basic and
diluted post-
tax earnings
$m

Basic
earnings
per share
cents

Diluted
earnings
per share
cents

Basic and
diluted post-
tax earnings
$m

Basic
earnings
per share
cents

Diluted
earnings
per share
cents

171
216
(26)

361
(206)
20

175

10.1
12.7
(1.5)

21.3
(12.1)
1.2

10.4

10.0
12.6
(1.5)

21.1
(12.1)
1.2

10.2

365
97
(27)

435
(283)
27

179

20.8
5.5
(1.5)

24.8
(16.2)
1.7

10.3

20.5
5.4
(1.5)

24.4
(15.9)
1.6

10.1

Earnings per share
Items for which EPS has been adjusted (Note 2)
Tax adjusting items (Note 2)

Adjusted earnings per share
Adjusted net performance fee profit before tax
Tax on adjusted net performance fee profits

Adjusted management fee earnings per share

1 2 . D I V I D E N D S

Ordinary shares
Final dividend paid for the year to 31 December 2014 – 6.1 cents (2013: 5.3 cents)
Interim dividend paid for the six months to 30 June 2015 – 5.4 cents (2014: 4.0 cents)

Dividends paid during the year

Proposed final dividend for the year to 31 December 2015 – 4.8 cents (2014: 6.1 cents)

Year ended
31 December
2015

Year ended
31 December
2014

104
89

193

95
68

163

106

Dividend distribution to the Company’s shareholders is recognised directly in equity in Man’s financial statements in the period in which the dividend is
paid or, if required, approved by the Company’s shareholders.

1 3 . G O O D W I L L A N D A C Q U I R E D I N T A N G I B L E S

Cost:
At beginning of the year
Acquisition of business2
Currency translation
Other adjustment3

At year end

Amortisation and impairment:
At beginning of the year
Amortisation
Impairment4

At year end

Net book value at year end

Allocated to cash generating units as follows:
AHL
GLG
FRM
Numeric

Year ended 31 December 2015

Year ended 31 December 2014

IMCs and
other
acquired
intangibles1

Total

Goodwill

IMCs and
other
acquired
intangibles1

924
36
–
–

960

(278)
(92)
–

(370)

590

–
392
37
161

3,283
58
(10)
–

3,331

(1,701)
(92)
(41)

(1,834)

1,497

454
614
134
295

2,231
137
(8)
(1)

2,359

(1,423)

–
–

(1,423)

936

461
201
140
134

726
198
–
–

924

(206)
(72)
–

(278)

646

–
431
36
179

Goodwill

2,359
22
(10)
–

2,371

(1,423)

–
(41)

(1,464)

907

454
222
97
134

Total

2,957
335
(8)
(1)

3,283

(1,629)
(72)
–

(1,701)

1,582

461
632
176
313

Includes investment management contracts (IMCs), brand names and distribution channels.

Notes:
1
2 Acquisition of business relates to Silvermine, NewSmith and the BAML fund of funds business for the year ended 31 December 2015, and to Numeric and Pine Grove in 2014.
3 The 2014 other adjustment of $1 million relates to the disposal of goodwill as a result of the sale of a subsidiary to local management during the year.
4 The 2015 impairment of $41 million relates to FRM.

Man Group plc Annual Report 2015 107

FINANCIAL STATEMENTS

N O T E S T O T H E G R O U P F I N A N C I A L S T A T E M E N T S
C O N T I N U E D

1 3 . G O O D W I L L A N D A C Q U I R E D I N T A N G I B L E S C O N T I N U E D

Goodwill
Goodwill represents the excess of the consideration transferred over the fair value of the identifiable net assets of the acquired business at the date
of acquisition.

Goodwill is carried on the Group balance sheet at cost less accumulated impairment. Goodwill has an indefinite useful life, is not subject to
amortisation and is tested for impairment annually, or whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the asset’s carrying value exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the
lowest levels for which there are separately identifiable cash flows (cash generating units).

Investment management contracts, distribution channels and brand names
Investment management contracts (IMCs), distribution channels and brand names are recognised at the present value of the expected future cash
flows and are amortised on a straight-line basis over the expected useful lives, which are between three and 13 years.

Allocation of goodwill to cash generating units
For statutory accounting impairment review purposes, the Group has identified four cash generating units (CGUs): AHL, GLG, FRM and Numeric.
Silvermine Capital Management LLC (Silvermine) and NewSmith LLP (NewSmith) were acquired during the year, and have been incorporated into
the GLG CGU. The BAML fund of funds IMCs purchased during the year have been allocated to the FRM CGU. Further details of these are provided
below.

Calculation of recoverable amounts for cash generating units
The recoverable amounts of the Group’s CGUs are assessed each year using a value in use calculation. The value in use calculation gives a higher
valuation compared to a fair value less cost to sell approach, as this would exclude some of the revenue synergies available to Man through its ability
to distribute products using its well established distribution channels, which may not be fully available to other market participants.

The value in use calculations at 31 December 2015 use cash flow projections based on the Board approved financial plan for the year to 31 December
2016 and a further two years of projections (2017 and 2018) plus a terminal value. The valuation analysis is based on best practice guidance whereby
a terminal value is calculated at the end of a short discrete budget period and assumes, after this three year budget period, no growth in asset flows
above the long-term growth rate. In order to determine the value in use of each CGU, it is necessary to notionally allocate the majority of the Group’s
cost base, relating to operations, product structuring, distribution and support functions, which are managed on a centralised basis.

The key assumptions used in the value in use calculations are represented by the compound average annualised growth in FUM over the three
year budget period and the discount rates and terminal value multiples applied to the modelled cash flows. The assumptions are derived from
past experience and consideration of current market inputs. The value in use calculations are sensitive to small changes in the key assumptions, in
particular in relation to the compound average annualised growth in FUM over the three year forecast period. Sensitivity analysis of this assumption
is given in each of the AHL, GLG, FRM and Numeric sections below. The terminal value is calculated based on the projected closing FUM at 31
December 2018 and applying a mid-point of a range of historical multiples to the forecast cash flows associated with management and performance
fees. A bifurcated discount rate has been applied to the modelled cash flows to reflect the different risk profile of net management fee income and
net performance fee income. The discount rates are based on the Group’s weighted average cost of capital using a risk free interest rate, together
with an equity risk premium and an appropriate beta derived from consideration of Man’s beta, similar alternative asset managers’, and the asset
management sector as a whole.

The Numeric CGU value in use calculation, presented for the first time in the year ended 31 December 2015, has been determined on a pre-tax
basis. We consider that this is the most appropriate basis for Numeric given the complexity involved in determining the value of Numeric’s future tax
obligations, given we do not expect to pay federal tax in the US for a number of years (Note 10). The value in use calculations for AHL, FRM and GLG
continue to be presented on a post-tax basis, consistent with the year ended 31 December 2014.

The recoverable amount of each CGU has been assessed at 31 December 2015. The key assumptions applied to the value in use calculations for
each of the CGUs are shown in the table below, and the results of the valuations are further explained in the following sections.

Compound average annualised growth in FUM (over three years)

Discount rate1
– Net management fees
– Net performance fees

Terminal value (mid-point of range of historical multiples)1,4
– Management fees
– Performance fees

AHL

18%

11%2
17%3

13.0x
5.5x

GLG

11%2
17%3

13.0x
5.5x

FRM

11%2
17%3

12.0x
5.0x

Numeric

13%

13%
20%

12.0x
4.8x

Notes:
1 These are presented on a post-tax basis for the AHL, GLG and FRM CGUs, and on a pre-tax basis for the Numeric CGU, in line with the value in use calculations.
2 The pre-tax equivalent of the net management fees discount rates is 13% for each of the AHL, GLG and FRM CGUs.
3 The pre-tax equivalent of the net performance fees discount rates is 20% for each of the AHL, GLG and FRM CGUs.
4 The implied terminal growth rates for the AHL, GLG, FRM and Numeric CGUs are 1%, 2%, 2% and 4%, respectively.

108 Man Group plc Annual Report 2015

1 3 . G O O D W I L L A N D A C Q U I R E D I N T A N G I B L E S C O N T I N U E D

AHL cash generating unit
The AHL value in use calculation at 31 December 2015 indicates a value of $3.7 billion, with around $3.2 billion of headroom over the carrying value
of the AHL business. Therefore, no impairment charge is deemed necessary at 31 December 2015 (2014: nil). The valuation at 31 December 2015 is
around $0.7 billion higher than the value in use calculation at 31 December 2014, primarily as a result of increased opening FUM as a result of lower
than forecast redemptions and higher performance fees on this FUM base, partially offset by a decrease in alternatives margins as a result of the
continued mix shift towards lower margin alternatives products.

The table below shows scenarios whereby the key assumptions are changed to stressed assumptions, indicating the modelled headroom or
impairment that would result. Each assumption, or set of assumptions, is stressed in isolation. The results of these sensitivities make no allowance for
actions that management would take if such market conditions persisted.

Compound average
annualised growth in FUM1

Management fee/
Performance fee

Discount rates (post-tax)

Multiples (post-tax)

Stressed to:
Modelled headroom/(impairment) ($m)

22%
4,289

-3% 10%/16% 12%/18% 14.0x/6.5x
3,6203

3,3382

3,1882

(1)

12.0x/4.5x
2,9043

Notes:
1 The compound average annualised growth in FUM has been stressed in a downside scenario to determine the point at which impairment would arise.
2 An increase/decrease of $75 million.
3 An increase/decrease of $358 million.

GLG cash generating unit
The GLG value in use calculation at 31 December 2015 indicates a value of $900 million, with around $270 million of headroom over the carrying value
of the GLG business. Therefore, no impairment charge is deemed necessary at 31 December 2015 (2014: nil). The valuation at 31 December 2015 is
around $100 million higher than the value in use calculation at 31 December 2014, primarily due to a change in FUM mix, with higher opening alternatives
FUM as a result of higher sales than previously forecast, which attracts a higher margin, and lower opening long only FUM as a result of higher
redemptions than expected.

The table below shows scenarios whereby the key assumptions are changed to stressed assumptions, indicating the modelled headroom or impairment
that would result. Each assumption, or set of assumptions, is stressed in isolation. The results of these sensitivities make no allowance for actions that
management would take if such market conditions persisted.

Stressed to:
Modelled headroom/(impairment) ($m)

Compound average
annualised growth in FUM1

8%
495

4%
(1)

Discount rates (post-tax)

Multiples (post-tax)

Management fee/
Performance fee

0% 10%/16% 12%/18% 14.0x/6.5x
3453
(359)

2502

2882

12.0x/4.5x
1933

Notes:
1 The compound average annualised growth in FUM has been stressed in a downside scenario to determine both the point at which impairment would arise and 0%.
2 An increase/decrease of $19 million.
3 An increase/decrease of $76 million.

FRM cash generating unit
For the six months to 30 June 2015 an impairment of $41 million was recognised in relation to the FRM goodwill, largely as a result of lower sales and
higher redemptions of fund of funds products than anticipated.

The FRM value in use calculation at 31 December 2015 indicates a value of $200 million, with around $50 million of headroom over the carrying value
of the FRM business. Therefore, no further impairment charge is deemed necessary at 31 December 2015. The valuation at 31 December 2015 is
higher than the value in use calculation at 30 June 2015, primarily as a result of an increase in FUM due to higher sales than previously forecast, as well
as an increase in management fee margins on new sales.

The table overleaf shows scenarios whereby the key assumptions are changed to stressed assumptions, indicating the modelled headroom or
impairment that would result. Each assumption, or set of assumptions, is stressed in isolation. The results of these sensitivities make no allowance for
actions that management would take if such market conditions persisted.

Man Group plc Annual Report 2015 109

FINANCIAL STATEMENTS
N O T E S T O T H E G R O U P F I N A N C I A L S T A T E M E N T S
C O N T I N U E D

1 3 . G O O D W I L L A N D A C Q U I R E D I N T A N G I B L E S C O N T I N U E D

Stressed to:
Modelled headroom/(impairment) ($m)

Compound average
annualised growth in FUM1

10%
122

6%
(1)

Discount rates (post-tax)

Multiples (post-tax)

Management fee/
Performance fee

0% 10%/16% 12%/18% 13.0x/6.0x
703
(135)

492

592

11.0x/4.0x
383

For the year ended 31 December 2014 there was no impairment charge.

Numeric cash generating unit
The Numeric value in use calculation at 31 December 2015 indicates a value of $330 million, with around $30 million of headroom over the carrying
value of the Numeric business. Therefore, no impairment charge is deemed necessary at 31 December 2015 (2014: nil).

Stressed to:
Modelled headroom/(impairment) ($m)

Compound average
annualised growth in FUM1

15%
70

11%
(1)

Discount rates (pre-tax)

Multiples (pre-tax)

Management fee/
Performance fee

0% 12%/19% 14%/21% 13.0x/5.8x
583
(160)

272

412

11.0x/3.8x
103

Acquisition of Silvermine
On 20 January 2015, Man acquired the entire issued share capital of Silvermine, a Connecticut-based leveraged loan manager with $3.8 billion of
funds under management at the date of acquisition across nine active collateralised loan obligation (“CLO”) structures. The consideration to Silvermine
owners is comprised of $26 million in cash up-front, including $3 million for acquired working capital, and two deferred amounts, payable following the
first (up to $17 million) and fifth (up to $30 million) anniversaries of closing, based on run rate management fees at the time (valued at $15 million). The
deferred consideration payable is equivalent to an earn-out and deemed to be a financial liability measured initially at fair value, with any subsequent
fair value movements recognised through the Group income statement.

Values for the acquired business at the date of acquisition are set out below.

Fees and other receivables
Intangible assets
Trade and other payables

Net assets acquired

Goodwill on acquisition

Net assets acquired including goodwill

Purchase consideration:
Cash consideration
Contingent consideration

Total consideration

Book value

Fair value
adjustments

Provisional
value

4
–
(1)

–
17
–

4
17
(1)

26
15

The fair value adjustments relate to the recognition of investment management contracts of $16 million and brand of $1 million. These intangible assets
are recognised at the present value of the expected future cash flows generated from the assets and are amortised on a straight-line basis over their
expected lives of five and ten years respectively. Goodwill primarily represents the increased footprint in the US and a presence within the CLO market,
as well as Silvermine’s skilled workforce.

Acquisition costs incurred as a result of the Silvermine transaction have been expensed and do not form part of goodwill, and are classified as an
adjusting item (Note 2).

110 Man Group plc Annual Report 2015

1 3 . G O O D W I L L A N D A C Q U I R E D I N T A N G I B L E S C O N T I N U E D

The pre-tax profit for the Silvermine business since acquisition date is $8.7 million. If Silvermine had been acquired at the beginning of the financial
year, the pre-tax profit for Silvermine would have been $9.2 million. Silvermine revenue for the period since the acquisition date is $16.6 million, and if
the acquisition had taken place at the beginning of the financial year, the revenue would have been $17.5 million.

Acquisition of NewSmith
On 24 April 2015, Man acquired the investment management business of NewSmith, an equity investment manager with $1.2 billion of funds under
management at the date of acquisition.

Provisional values for the acquired business at the date of acquisition are set out below.

Cash and cash equivalents
Fees and other receivables
Intangible assets
Trade and other payables

Net assets acquired

Goodwill on acquisition

Net assets acquired including goodwill

Purchase consideration:
Cash consideration
Contingent consideration

Total consideration

Book value

Fair value
adjustments

Provisional
value

1
3
–
(1)

–
–
12
–

1
3
12
(1)

–

10
5

The fair value adjustments relate to the recognition of investment management contracts of $12 million. These intangible assets are recognised at the
present value of the expected future cash flows generated from the assets and are amortised on a straight-line basis over their expected life of four years.

Acquisition costs incurred as a result of the NewSmith transaction have been expensed and do not form part of goodwill, and are classified as an
adjusting item (Note 2).

The pre-tax profit for the NewSmith business since acquisition date is $5 million, which includes management fee revenues of $6 million and
performance fees of $4 million.

BAML fund of funds acquisition
In April and May 2015 Man made an asset purchase for the BAML fund of fund investment management contracts valued at $7 million. These are
recognised at the present value of the expected future cash flows generated from the assets and are amortised on a straight-line basis over their
expected life of three years.

1 4 . O T H E R I N T A N G I B L E S

Cost:
At beginning of the year
Additions
Reclassifications1
Redemptions/disposals

At year end

Aggregate amortisation and impairment:
At beginning of the year
Redemptions/disposals
Reclassifications1
Amortisation

At year end

Net book value at year end

Year ended 31 December 2015

Year ended 31 December 2014

Placement
fees

Capitalised
computer
software

66
1
–
(4)

(61)
3
–
(2)

(60)

58
6
(4)
(4)

(50)
4
4
(3)

(45)

Placement
fees

Capitalised
computer
software

74
–
–
(8)

(54)
6
–
(13)

(61)

69
9
–
(20)

(63)
16
–
(3)

(50)

Total

124
7
(4)
(8)

119

(111)
7
4
(5)

(105)

Total

143
9
–
(28)

124

(117)
22
–
(16)

(111)

Note:
1 Relate to reclassifications of nil net book value assets from capitalised computer software to computer hardware (Note 21).

Man Group plc Annual Report 2015 111

FINANCIAL STATEMENTS

N O T E S T O T H E G R O U P F I N A N C I A L S T A T E M E N T S
C O N T I N U E D

1 4 . O T H E R I N T A N G I B L E S C O N T I N U E D

Placement fees
Placement fees are paid to distributors for fund product launches or sales. The majority of placement fees paid up-front are capitalised as intangible
assets which represent the contractual right to benefit from future income from providing investment management services. The amortisation period
is based on management’s estimate of the weighted average period over which Man expects to earn economic benefits from the investor in each
product, estimated to be five years on a straight-line basis. The placement fee intangible is assessed for impairment annually. Amortisation expense,
including any accelerated charges arising from redemptions, is included in distribution costs in the Group income statement.

Capitalised computer software
Costs that are directly associated with the procurement or development of identifiable and unique software products, which will generate economic
benefits exceeding costs beyond one year, are recognised as capitalised computer software. Capitalised computer software is amortised on a
straight-line basis over its estimated useful life (three years) and is subject to regular impairment reviews. Amortisation of capitalised computer software
is included in Other costs in the Group income statement.

1 5 . C A S H , L I Q U I D I T Y A N D B O R R O W I N G S

Liquidity and borrowings
Total liquidity resources aggregate to $1,586 million at 31 December 2015 (2014: $2,263 million) and comprise cash and cash equivalents of $586
million (2014: $738 million), excluding $21 million of cash held relating to consolidated fund entities (Note 16), and the undrawn committed revolving
credit facility of $1,000 million (2014: $1,525 million). Cash and cash equivalents at year end comprises $250 million (2014: $291 million) of cash at bank
on hand, and $336 million (2014: $447 million) in short-term deposits, net of overdrafts of nil (2014: nil). Cash ring-fenced for regulated entities totalled
$35 million (2014: $24 million).

Liquidity resources support ongoing operations and potential liquidity requirements under stressed scenarios. The amount of potential liquidity
requirements is modelled based on scenarios that assume stressed market and economic conditions. With the exception of committed purchase
arrangements (Note 30.1), the funding requirements for Man relating to the investment management process are discretionary. The liquidity profile
of Man is monitored on a daily basis and the stressed scenarios are updated regularly. The Board reviews Man’s funding resources at each
Board meeting and on an annual basis as part of the strategic planning process. Man’s available liquidity is considered sufficient to cover current
requirements and potential requirements under stressed scenarios.

Cash is invested in accordance with strict limits consistent with the Board’s risk appetite, which consider both the security and availability of liquidity.
Accordingly, cash is held in short-term bank deposits and on-demand deposit bank accounts. At 31 December 2015 the $586 million cash balance
(excluding cash held by consolidated fund entities) is held with 22 banks (2014: $738 million with 22 banks). The single largest counterparty bank exposure
of $100 million is held with an A+ rated bank (2014: $100 million with an AA- rated bank). At 31 December 2015, balances with banks in the AA ratings
band aggregate to $239 million (2014: $284 million) and balances with banks in the A ratings band aggregate to $293 million (2014: $453 million).

In September 2014 Man issued $150 million ten year fixed rate reset callable guaranteed subordinated notes (Tier 2 notes), with associated issuance
costs of $1 million. The Tier 2 notes were issued with a fixed coupon of 5.875% until 15 September 2019. The notes may be redeemed in whole at
Man’s option on 16 September 2019 at their principal amount, subject to FCA approval. If the notes are not redeemed at this time then the coupon will
reset to the five year mid-swap rate plus 4.076% and the notes will be redeemed on 16 September 2024 at their principal amount.

31 December 2015

Less than
1 year

2 years

3 years

Greater than
3 years

–

586
–

586

–

–
–

–

–
–

–

149

–
1,000

1,000

31 December 2014 ($m)

Less than
1 year

–

738
–

738

2 years

3 years

Greater than
3 years

–

–
70

–

149

–
120

120

–
1,335

1,335

Total

149

586
1,000

1,586

Total

149

738
1,525

2,263

Borrowings: 2024 fixed rate reset callable guaranteed subordinated notes

Cash and cash equivalents1
Undrawn committed revolving credit facility

Total liquidity

Borrowings: 2024 fixed rate reset callable guaranteed subordinated notes

Cash and cash equivalents
Undrawn committed revolving credit facility

Total liquidity

Note:
1 Excludes $21 million of restricted cash held by consolidated fund entities (Note 16).

112 Man Group plc Annual Report 2015

1 5 . C A S H , L I Q U I D I T Y A N D B O R R O W I N G S C O N T I N U E D

Borrowings are initially recorded at fair value net of transaction costs incurred, and are subsequently measured at amortised cost. The difference between
the amount repayable at maturity on the borrowings and the carrying value is amortised over the period up to the expected maturity of the associated
debt in accordance with the effective interest rate method. At 31 December 2015, the fair value of borrowings is $157 million (2014: $154 million).

The committed revolving credit facility of $1,525 million was refinanced during 2015 and replaced with a new committed syndicated revolving loan
facility of $1,000 million which was undrawn at 31 December 2015. The new facility was put in place as a five year facility and includes the option for
Man to request the banks to extend the maturity date by one year on each of the first and second anniversaries. The participant banks have the option
to accept or decline Man’s request. The facility is currently scheduled to mature in June 2020. To maintain maximum flexibility, the revolving credit
facility does not include financial covenants.

Disclosures in relation to financial guarantees and commitments are included in Note 30.

Foreign exchange and interest rate risk
Man is subject to risk from changes in interest rates and foreign exchange rates on monetary assets and liabilities. A 10% strengthening/weakening
of the USD against all other currencies, with all other variables held constant, would have resulted in a foreign exchange loss/gain of $2 million (2014:
$6 million loss/gain), with a corresponding impact on equity. This exposure is based on USD balances held by non-USD functional currency entities
and non-USD balances held by USD functional currency entities within the Group. In respect of Man’s monetary assets and liabilities which earn/incur
interest indexed to floating rates, as at 31 December 2015 a 50bp increase/decrease in interest rates, with all other variables held constant, would
have resulted in a $2 million increase or a $1 million decrease (2014: $2 million increase or $1 million decrease) in net interest income.

In limited circumstances, the Group uses derivative financial instruments to hedge its risk associated with foreign exchange movements. Where
fixed foreign currency denominated costs are hedged, the associated derivatives may be designated as cash flow hedges. Effective unrealised
gains or losses on these instruments are recognised within the cash flow hedge reserve in equity and, when realised, these are reclassified to the
Group income statement in the same line as the hedged item. The realisation of foreign currency operating cash flows and the associated forward
foreign currency derivative contracts generally arise on a monthly basis. The fair value of derivatives held in relation to the Group’s cash flow hedges
at 31 December 2015 is $7 million (2014: $15 million). The Group also hedges its exposure to net investments in foreign operations through forward
foreign exchange contracts where appropriate, with any effective gains or losses recognised in other comprehensive income and accumulated in
the cumulative translation adjustment reserve within equity. The fair value of derivatives held in relation to the Group’s net investment hedges at 31
December 2015 is nil (2014: $3 million). Any ineffective portion of these hedges is recognised immediately in profit or loss, and is included within the
income or gains on investments and other financial instruments.

1 6 . I N V E S T M E N T S I N F U N D P R O D U C T S A N D O T H E R I N V E S T M E N T S

Investments in fund products and other investments comprise:
Loans to fund products
Other investments in fund products
Other investments
Investments in funds relating to line-by-line consolidated funds

Investments in fund products and other investments comprise:
Loans to fund products
Other investments in fund products
Other investments

31 December 2015

Financial
assets at fair
value through
profit or loss

Available-for-
sale financial
assets

Loans and
receivables

Total
investments in
fund products
and other
investments

Net non-
current assets
held for sale

Total
investments

–
224
–
329

553

–
–
4
–

41
–
–
–

41
224
4
329

598

–
119
–
–

119

41
343
4
329

717

31 December 2014

Financial
assets at fair
value through
profit or loss

Available-for-
sale financial
assets

Loans and
receivables

Total
investments in
fund products
and other
investments

Net non-
current assets
held for sale

Total
investments

–
207
–

207

–
2
4

94
–
–

94
209
4

307

–
153
–

153

94
362
4

460

Man Group plc Annual Report 2015 113

FINANCIAL STATEMENTS
N O T E S T O T H E G R O U P F I N A N C I A L S T A T E M E N T S
C O N T I N U E D

1 6 . I N V E S T M E N T S I N F U N D P R O D U C T S A N D O T H E R I N V E S T M E N T S
C O N T I N U E D

Man’s seeding investments are included in various Group balance sheet line items. In summary, the total seeding investments portfolio is made up
as follows:

Loans to funds
Other investments in fund products
Less those used to hedge deferred compensation awards
Consolidated investments in funds – held for sale
Consolidated investments in funds – line-by-line consolidation

Seeding investments portfolio

Note

16.1
16.2
16.2
16.3
16.3

31 December
2015

31 December
2014

41
224
(71)
119
213

526

94
209
(68)
153
–

388

16.1. Loans to fund products
Loans to fund products are short-term advances primarily to Man guaranteed products, which are made to assist with the financing of the leverage
associated with the structured products. The loans are repayable on demand and are carried at amortised cost using the effective interest rate
method. The average balance during the year is $75 million (2014: $80 million). Loans to fund products have decreased compared to the prior year
as guaranteed product FUM has decreased together with the associated leveraging. The liquidity requirements of guaranteed products together with
commitments to provide financial support (Note 30) which give rise to loans to funds are subject to our routine liquidity stress testing and any liquidity
requirements are met by available cash resources, or the committed revolving credit facility.

Loans to fund products expose Man to credit risk and therefore the credit decision making process is subject to limits consistent with the Board’s risk
appetite. The carrying value represents Man’s maximum exposure to this credit risk. Loans are closely monitored against the assets held in the funds.
The largest single loan to a fund product at 31 December 2015 is $7 million (2014: $14 million). Fund entities are not externally rated, but our internal
modelling indicates that fund products have a probability of default that is equivalent to a credit rating of A.

16.2. Other investments in fund products
Man uses capital to invest in our fund products as part of our ongoing business to build our product breadth and to trial investment research
developments before we market the products to investors. These seeding investments are generally held for less than one year. Where Man is
deemed not to control the fund, these are classified as other investments in fund products. Other investments in fund products are classified
primarily at fair value through profit or loss, with movements in fair value being recognised through income or gains on investments and other financial
instruments. Purchases and sales of investments are recognised on trade date.

Other investments in fund products are not actively traded and the valuation at the fund level cannot be determined by reference to other available
prices. The fair values of investments in fund products are derived from the reported NAVs of each of the fund products, which in turn are based upon
the value of the underlying assets held within each of the fund products and the anticipated redemption horizon of the fund product. The valuation
of the underlying assets within each fund product is determined by external valuation service providers based on an agreed valuation policy and
methodology. Whilst these valuations are performed independently of Man, Man has established oversight procedures and due diligence processes
to ensure that the NAVs reported by the external valuation service providers are reliable and appropriate. Man makes adjustments to these NAVs
where the anticipated redemption horizon or events or circumstances indicate that the NAVs are not reflective of fair value. The fair value hierarchy of
financial assets is disclosed in Note 28.

Investments in fund products expose Man to market risk and therefore this process is subject to limits consistent with the Board’s risk appetite. The
largest single investment in fund products is $170 million (2014: $51 million). The market risk from seeding investments is modelled using a value at risk
methodology using a 95% confidence interval and one year time horizon. The value at risk is estimated to be $55 million at 31 December 2015 (2014:
$26 million).

Fund investment for deferred compensation arrangements
At 31 December 2015 investments in fund products included $71 million (2014: $68 million) of fund products related to deferred compensation
arrangements. Employees are subject to mandatory deferral arrangements and as part of these arrangements employees can elect to have their
deferral in a designated series of Man fund products. The changes in the fair value of the fund product awards are recognised over the relevant vesting
period, which means the compensation expense changes based on the value of the designated fund products. The fund product investments are
held to offset this change in compensation during the vesting period and at vesting the value of the fund investment is delivered to the employee. The
fund product investments are recorded at fair value with any gains or losses during the vesting period recognised as income or gains on investments
and other financial instruments in the Group income statement.

114 Man Group plc Annual Report 2015

1 6 . I N V E S T M E N T S I N F U N D P R O D U C T S A N D O T H E R I N V E S T M E N T S
C O N T I N U E D

16.3. Consolidation of investments in funds
Seed capital invested into funds may at times be significant, and therefore the fund may be deemed to be controlled by the Group (Note 1). The fund
is consolidated into the Group’s results from the date control commences until it ceases. The Group’s seeding investment portfolio has grown during
2015. In 2015 nine (2014: five) investments in funds have met the control criteria and therefore been consolidated (Note 32), either classified as held for
sale or consolidated on a line-by-line basis as detailed below.

Held for sale
Where the Group acquired the controlling stake exclusively with a view to subsequent disposal through sale or dilution and it is considered highly
probable that it will relinquish control within a year, the investment in the controlled fund is classified as held for sale. The seeded fund is recognised in
the Group balance sheet as non-current assets and liabilities held for sale, with the interests of any other parties included within non-current liabilities
held for sale. Amounts recognised are measured at the lower of the carrying amount and fair value less costs to sell.

The non-current assets and liabilities held for sale are as follows:

Non-current assets held for sale
Non-current liabilities held for sale

Investments in fund products held for sale

31 December
2015

31 December
2014

188
(69)

119

186
(33)

153

Investments cease to be classified as held for sale when the fund is no longer controlled by the Group, at which time they are classified as financial
assets at fair value through profit or loss (Note 16.2). Loss of control may eventuate through sale of the investment or a dilution in the Group’s holding.
If a held for sale fund remains under the control of the Group for more than one year, and it is unlikely that the Group will reduce or no longer control its
investment in the short-term, it will cease to be classified as held for sale and will be consolidated on a line-by-line basis as below. Two investments in
funds which were classified as held for sale in 2014 have been consolidated on a line-by-line basis for the year ending 31 December 2015. We expect
these seed investments will be sold in the short-term.

Management fee income earned from fund entities classified as held for sale was $1 million for the year ended 31 December 2015 (2014: $1 million).

Line-by-line consolidation
The investments relating to the three funds (2014: nil) which are controlled and are consolidated on a line-by-line basis are included within the Group
balance sheet and income statement as follows:

Balance Sheet
Cash and cash equivalents
Transferrable securities1
Accounts payable

Net assets of line-by-line consolidated fund entities
Third-party interest in consolidated funds

Net investment held by Man

Income statement
Net losses on investments2
Management fee expenses3

Net losses of line-by-line consolidated fund entities
Third-party share of losses relating to interests in consolidated funds

Losses attributable to net investment held by Man

31 December
2015

21
329
(1)

349
(136)

213

(16)
(4)

(20)
9

(11)

Notes:
1
2
3 Relates to management fees paid by the funds to Man during the year, and is eliminated within gross management and other fees in the Group income statement.

Included within Investments in fund products and other investments.
Included within Income or gains on investments and other financial instruments.

Man Group plc Annual Report 2015 115

FINANCIAL STATEMENTS
N O T E S T O T H E G R O U P F I N A N C I A L S T A T E M E N T S
C O N T I N U E D

1 6 . I N V E S T M E N T S I N F U N D P R O D U C T S A N D O T H E R I N V E S T M E N T S
C O N T I N U E D

16.4. Structured entities
A structured entity is an entity designed so that its activities are not governed by way of voting rights, for example where contractual arrangements are
the dominant factor in affecting an investor’s returns. Man has evaluated all exposures and concluded that where Man holds an investment, loan, fees
receivable, guarantee or commitment with an investment fund or a collateralised loan obligation, this represents an interest in a structured entity. The
activities of these entities are governed by investment management agreements or, in the case of a collateralised loan obligation, the indenture.

The key considerations in assessing whether the Group controls a structured entity, and therefore should be consolidated into the Group’s financial
statements, are outlined in Note 1. Consolidated structured entities are detailed in Note 16.3.

Man’s maximum exposure to loss from unconsolidated structured entities is the sum total of any investment held, fees receivable and loans to the fund
entities, and is $303 million for the year ended 31 December 2015 (2014: $394 million). Man’s interest in and exposure to unconsolidated structured
entities is as follows:

Year ended 31 December 2015

Total FUM
($bn)

Less
Managed
Accounts and
consolidated
fund entities1
($bn)

Total FUM
unconsolidated
structured
entities
($bn)

Gross
management
fee margin2
(%)

Fair value of
investment
held
($m)

No. of
funds

Fees
receivable
($m)

Loans to
funds
($m)

Maximum
exposure to
loss
($m)

Alternative

Quant (AHL/Numeric)
Discretionary (GLG)
Fund of funds (FRM)

Long only

Quant (AHL/Numeric)
Discretionary (GLG)

Guaranteed

Total

Year ended 31 December 2014

Alternative

Quant (AHL/Numeric)
Discretionary (GLG)
Fund of funds (FRM)

Long only

Quant (AHL/Numeric)
Discretionary (GLG)

Guaranteed

Total

16.4
16.3
11.9

18.6
14.2
1.3

78.7

0.1
0.2
2.9

–
–
–

3.2

16.2
16.1
9.0

18.6
14.3
1.3

75.5

114
370
238

105
131
36

994

1.7
1.0
0.9

0.3
1.0
5.1

38
150
4

2
4
1

199

33
8
10

3
4
5

–
–
–

–
–
41

71
158
14

5
8
47

303

Less Managed
Accounts and
consolidated
fund entities2
($bn)

Total FUM
unconsolidated
structured
entities
($bn)

Total FUM
($bn)

Gross
management
fee margin2
(%)

Fair value of
investment
held
($m)

No. of
funds

Fees
receivable
($m)

Loans to
funds
($m)

Maximum
exposure to
loss
($m)

12.9
14.5
10.8

16.7
16.0
2.0

72.9

–
0.1
1.8

–
–
–

1.9

12.9
14.4
9.0

16.7
16.0
2.0

71.0

87
439
141

10
112
48

837

2.2
1.4
0.9

0.3
0.9
5.2

40
114
6

2
4
–

85
7
12

3
9
18

166

134

1
–
–

–
–
93

126
121
18

5
13
111

394

Notes:
1 For managed accounts where we do not act as investment manager or advisor Man’s role in directing investment activities is diminished and therefore these are not considered to

be structured entities.

2 Gross management fee margins are the categorical weighted average. Performance fees can only be earned after a high water mark is achieved. For performance fee eligible

funds, performance fees are within the range of 10% to 20%.

Support by way of loans provided to unconsolidated structured entities is detailed in Note 16.1, and is included within the maximum exposure to loss
above. Furthermore, on occasion Man agrees to purchase illiquid investments from the funds at market rates in order to facilitate investor withdrawals.
Man has not provided any other non-contractual support to unconsolidated structured entities. Further information about risks relating to investment
funds can be found in Principal risks and mitigants on pages 36 and 37.

116 Man Group plc Annual Report 2015

1 7 . F E E A N D O T H E R R E C E I V A B L E S

Fee receivables
Prepayments and accrued income
Derivative financial instruments
Other receivables

31 December
2015

31 December
2014

63
171
2
67

303

134
204
3
55

396

Fee and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method.
Fee receivables and accrued income represent management and performance fees from fund products and are received in cash when the funds’ net
asset values are determined. All fees are deducted from the NAV of the respective funds by the independent administrators and therefore the credit
risk of fee receivables is minimal. No balances are overdue or delinquent at year end. At 31 December 2015, $12 million (2014: $8 million) of other
receivables are expected to be settled after 12 months.

For the Open Ended Investment Collective (OEIC) funds businesses, Man acts as the intermediary for the collection of subscriptions due from
customers and payable to the funds, and for redemptions receivable from funds and payable to customers. At 31 December 2015 the amount
included in other receivables is $26 million (2014: $19 million). The unsettled fund payable is recorded in trade and other payables.

Details of derivatives used to hedge foreign exchange risk are included in Note 15. Other derivative financial instruments, which consist primarily of
foreign exchange contracts, are measured at fair value through profit or loss.

The notional value of all derivative financial assets is $134 million (2014: $280 million). All derivatives are held with external banks with ratings of A or
higher and mature within one year. During the year, there were $12 million net realised and unrealised gains arising from derivatives (2014: $3 million
net losses). Derivatives are classified as Level 2 under Man’s fair value hierarchy (Note 28).

1 8 . T R A D E A N D O T H E R P A Y A B L E S

Accruals
Trade payables
Deferred consideration
Derivative financial instruments
Other payables

31 December
2015

31 December
2014

322
32
206
8
92

660

289
35
150
15
92

581

Accruals primarily relate to compensation accruals. Trade payables include payables relating to the OEIC funds business of $25 million at 31
December 2015 (2014: $20 million). Deferred consideration relates to the amounts payable in respect of acquisitions (Note 28). Other payables include
servicing fees payable to distributors and redemption proceeds due to investors.

Payables are initially recorded at fair value and subsequently measured at amortised cost. Included in trade and other payables at 31 December 2015
are balances of $178 million (2014: $109 million) that are expected to be settled after more than 12 months, which relate to deferred consideration.
Man’s policy is to meet its contractual commitments and pay suppliers according to agreed terms.

Details of derivatives used to hedge foreign exchange risk are included in Note 15. Derivative financial instruments, which consist primarily of foreign
exchange contracts, are measured at fair value through profit or loss.

The notional value of derivative financial liabilities at 31 December 2015 is $331 million (2014: $358 million). All derivative contracts mature within
one year.

Man Group plc Annual Report 2015 117

FINANCIAL STATEMENTS
N O T E S T O T H E G R O U P F I N A N C I A L S T A T E M E N T S
C O N T I N U E D

1 9 . P R O V I S I O N S

As 1 January 2015
Charged/(credited) to the income statement:

Charge in the year
Unwinding of discount
Exchange differences

Used during the year/settlements

At 31 December 2015

Onerous
property lease
contracts

Litigation

Restructuring

7
1
(2)
(8)

–
–
–
–

–
–
–
(5)

Total

7
1
(2)
(13)

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will
be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

The $7 million charge for onerous property lease contracts relates to an increase in the Riverbank House onerous property lease provision as a result
of a contractual market-linked rental increase (Note 2). Provisions for onerous property lease contracts represent the present value of the future lease
payments that the Group is presently obliged to make under non-cancellable onerous operating lease contracts, less the future benefit expected to be
generated from these, including sub-lease revenue where applicable. The unexpired terms of the onerous leases range from one to 20 years.

Provisions for restructuring are recognised when the obligation arises, following communication of the formal plan.

2 0 . I N V E S T M E N T S I N A S S O C I A T E S

Associates are entities in which Man holds an interest and over which it has significant influence but not control, and are accounted for using the
equity method. In assessing significant influence Man considers the investment held and its power to participate in the financial and operating policy
decisions of the investee through its voting or other rights.

Under the equity method associates are carried at cost plus (or minus) our share of cumulative post-acquisition movements in undistributed profits (or
losses). Gains and losses on transactions between the Group and its associates are eliminated to the extent of the Group’s interests in these entities.
An impairment assessment of the carrying value of associates is performed annually or whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable, and any impairment is expensed in the Group income statement.

Man’s investments in associates are as follows:

% ownership

At beginning of the year
Share of post-tax profit
Dividends received

At year end

Year ended 31 December 2015

Year ended 31 December 2014

Nephila
Capital Ltd

18.75%1

28
3
(3)

OFI
MGA

20%

2
–
–

Total

30
3
(3)

Nephila
Capital Ltd

18.75%1

28
9
(9)

OFI
MGA

20%

3
–
(1)

Total

31
9
(10)

Note:
1 18.75% represents Man’s ownership of class B common shares. Man’s participation in the profits of Nephila is governed by the share class rights and therefore does not relate

proportionately to the ownership interest held. Man considers that this equity interest, Man’s ability to veto Nephila’s annual business plan, and the presence of a Man member on
the Nephila board of directors provides Man with the power to participate in the financial and operating policy decisions, and equates to significant influence.

Nephila Capital Limited is an alternative investment manager based in Bermuda specialising in the management of funds which underwrite natural
catastrophe reinsurance and invest in insurance-linked securities and weather derivatives, and OFI MGA is a French asset manager. Both Nephila
Capital Limited and OFI MGA have a 31 December year end. Man has not provided any financial support to associates during the year to 31
December 2015 (2014: nil).

Commission income relating to sales of Nephila Capital Limited products totalled $14 million for the year ended 31 December 2015 (2014: $15 million),
and is included within gross management and other fees in the Group income statement.

118 Man Group plc Annual Report 2015

2 1 . L E A S E H O L D I M P R O V E M E N T S A N D E Q U I P M E N T

Cost
At beginning of the year
Acquisition of business
Additions
Disposals
Reclassifications1

At year end

Accumulated depreciation:
At beginning of the year
Charge for year
Accelerated depreciation
Disposals
Reclassifications1

At year end

Net book value at year end

Year ended 31 December 2015

Year ended 31 December 2014

Leasehold
improvements

Equipment

Total

Leasehold
improvements

Equipment

Total

114
–
2
(2)
–

103
–
5
(6)
4

217
–
7
(8)
4

114

106

220

(76)
(7)
–
1
–

(82)

(89)
(6)
–
5
(4)

(94)

(165)
(13)
–
6
(4)

(176)

119
2
1
(8)
–

114

(78)
(6)
–
8
–

(76)

114
–
2
(13)
–

103

(87)
(15)
–
13
–

(89)

233
2
3
(21)
–

217

(165)
(21)
–
21
–

(165)

Note:
1 Relate to reclassifications of nil net book value assets from capitalised computer software (Note 14) to computer hardware.

All leasehold improvements and equipment are shown at cost less depreciation and impairment. Cost includes the original purchase price of the
asset and costs directly attributable to bringing the asset to its working condition for its intended use. Depreciation is calculated using the straight-line
method over the asset’s estimated useful life, which for leasehold improvements is over the shorter of the life of the lease and the improvement and for
equipment is between three and ten years.

2 2 . D E F E R R E D C O M P E N S A T I O N A R R A N G E M E N T S

Man operates cash and equity-settled share-based payment schemes as well as fund product based compensation arrangements. Details of these
schemes can be found in the Directors’ remuneration report on pages 64 to 87.

For compensation plans whereby deferred compensation is invested in fund products managed by Man, the fair value of the employee services
received in exchange for the fund units is recognised as an expense over the vesting period, with a corresponding liability. The total amount to be
expensed is determined by reference to the fair value of the awards, which is remeasured at each reporting date, and equates to the fair value of the
underlying fund products at settlement date.

During the year, $53 million (2014: $42 million) is included within compensation costs relating to share-based payment and deferred fund product
plans, consisting of equity-settled share-based payments of $18 million (2014: $11 million), cash-settled share-based payments totalling nil (2014: $1
million), and deferred fund product plans of $35 million (2014: $30 million).

22.1 Employee Trusts
The Employee Trusts have the obligation to deliver shares, options and fund product based payments which have been granted to employees. Man
contributed funds, in order for the Trusts to meet their current period obligations in the year, of $37 million (2014: $21 million).

The Employee Trusts are fully consolidated into Man and shares held are treated as treasury shares for EPS purposes (Note 11). The shares held
by the Employee Trusts are deducted from Tier 1 Capital. The Employee Trusts are controlled by independent trustees and their assets are held
separately from those of Man. At 31 December 2015 the net assets of the Employee Trusts amounted to $80 million (2014: $82 million). These assets
include 22,077,638 (2014: 21,113,109) ordinary shares in the Company, $11 million notional value options over Man shares (2014: $32 million), and
$29 million of fund units (2014: $33 million) to deliver against the future obligations. The shares are recorded at cost and shown as a deduction from
shareholders’ funds. During the year the trustees of one of the Employee Trusts waived all of the interim dividend for the year ended 31 December
2015 on each of the 21,509,210 ordinary shares registered in its name at the relevant date for eligibility for the interim dividend (2014 interim dividend:
waived on all 21,217,345 shares) and all of the final dividend for the year ended 31 December 2014 on each of 21,473,372 of the ordinary shares
registered in its name at the relevant date for eligibility for the final dividend (2013 final dividend: waived on all 26,925,242 shares).

22.2 Share-based payments
In respect of equity-settled share-based payment schemes, the fair value of the employee services received in exchange for the share awards and
options granted is recognised as an expense, with the corresponding credit being recognised in equity. The total amount to be expensed over the
vesting period is determined by reference to the fair value of the share awards and options at grant date. The fair value of the share awards and
options granted in exchange for employee services is calculated using the Black-Scholes valuation model that takes into account the effect of both
financial and demographic assumptions. Forfeiture and early vesting are based on historical observable data. Changes to the original estimates, if any,
are included in the Group income statement, with a corresponding adjustment to equity.

Man Group plc Annual Report 2015 119

FINANCIAL STATEMENTS

N O T E S T O T H E G R O U P F I N A N C I A L S T A T E M E N T S
C O N T I N U E D

2 2 . D E F E R R E D C O M P E N S A T I O N A R R A N G E M E N T S C O N T I N U E D

Share options
The fair values of share options granted during the year and the assumptions used in the calculations are as follows:

Grant dates
Weighted average share price at grant date ($) (£1.6)
Weighted average exercise price at grant date ($) (£1.3)
Share options granted in the period
Vesting period (years)
Expected share price volatility (%)
Dividend yield (%)
Risk-free rate (%)
Expected option life (years)
Number of options assumed to vest
Average fair value per option granted ($)

Sharesave
share option
schemes

11/09/2015
2.5
2.0
1,891,097
3-5
45
6
0.9
3.2
1,448,912
0.7

The expected share price volatility is based on historical volatility over the past ten years. The expected option life is the average expected period
to exercise. The risk-free rate of return is the yield on zero-coupon US and UK (where appropriate) government bonds of a term consistent with the
assumed option life.

Movements in the number of share options outstanding are as follows:

Share options outstanding at beginning of the year
Granted
Forfeited
Exercised

Share options outstanding at year end

Share options exercisable at year end

Year ended 31 December 2015

Year ended 31 December 2014

Weighted
average
exercise price
($ per share)

Number

4.2 53,140,223
2,302,961
2.0
(4,225,115)
4.1
(244,150)
1.0

4.3 50,973,919

4.6 43,271,313

4.3
1.5
3.7
1.0

4.2

4.7

Number

50,973,919
1,891,097
(4,959,775)
(1,869,973)

46,035,268

41,535,779

The share options outstanding at the end of the year have a weighted average exercise price and expected remaining life as follows:

Range of exercise prices ($ per share)

1.01–5.00
5.01–7.00

31 December 2015

31 December 2014

Weighted
average
exercise price
($ per share)

Weighted
average
expected
remaining life

Number of
share options

Weighted
average
exercise price
($ per share)

Weighted
average
expected
remaining life

4.0
5.9

4.8 26,604,713
0.5 24,369,206

50,973,919

3.7
5.1

3.5
4.3

Number of
share options

45,987,250
48,018

46,035,268

Share awards
The fair values of share awards granted during the year and the assumptions used in the calculations are as follows:

Grant dates
Weighted average share price at grant date ($)
Share awards granted in the year
Vesting period (years)
Average fair value per share award granted ($)

Deferred
share plan

12/3/2015-23/12/2015
2.9
11,770,093
1-5
2.9

Deferred
Executive
Incentive Plan

12/3/2015
2.9
787,965
3-5
2.9

120 Man Group plc Annual Report 2015

2 2 . D E F E R R E D C O M P E N S A T I O N A R R A N G E M E N T S C O N T I N U E D

Movements in the number of share awards outstanding are as follows:

Share awards outstanding at beginning of the year
Granted
Forfeited
Exercised

Share awards outstanding at year end

Share awards exercisable at year end

2 3 . C A P I T A L M A N A G E M E N T

Year ended
31 December
2015
Number

22,218,804
12,558,058
(849,476)
(9,666,096)

Year ended
31 December
2014
Number

25,682,204
12,035,895
(1,738,473)
(13,760,822)

24,261,290

22,218,804

1,754,140

2,030,681

Investor confidence is an important element in the sustainability of our business. That confidence comes, in part, from the strength of our capital
base. Man has maintained significant surplus capital and available liquidity throughout the recent periods of market volatility. This capital has given
Man flexibility to support our investors, intermediaries and financial partners and to allow them to make informed decisions regarding their investment
exposures. This confidence gives our business credibility and sustainability.

We have a conservative capital and liquidity framework which allows us to invest in the growth of our business. We utilise capital to support the
operation of the investment management process and the launch of new fund products. We view this as a competitive advantage which allows us to
directly align our interests with those of investors and intermediaries.

Man monitors its capital requirements through continuous review of its regulatory and economic capital, including monthly reporting to the Risk and
Finance Committee and the Board.

Man’s dividend policy is that we will pay out at least 100% of adjusted net management fee earnings per share in each financial year by way of ordinary
dividend. In addition, Man expects to generate significant surplus capital over time, primarily from net performance fee earnings. Available surpluses,
after taking into account our required capital (including accruals for future earn-out payments), potential strategic opportunities and a prudent buffer,
will be distributed to shareholders over time, by way of higher dividend payments and/or share repurchases. Whilst the Board considers dividends as
the primary method of returning capital to shareholders, it will continue to execute share repurchases when advantageous.

Share capital and capital reserves
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.

Own shares held through the Employee Trusts are recorded at cost, including any directly attributable incremental costs (net of tax), and are deducted
from equity attributable to the Company’s equity holders until the shares are transferred to employees or sold. Where such shares are subsequently
sold, any consideration received, net of any directly attributable incremental transaction costs and the related tax effects, is included in equity
attributable to the Company’s equity holders.

Ordinary shares
Ordinary shares have a par value of 33/7 US cents per share (2014: 33/7 US cents per share) and represent 99.9% of issued share capital. All issued
shares are fully paid. The shares have attached to them full voting, dividend and capital distribution (including on wind up) rights. They do not confer
any rights of redemption. Ordinary shareholders have the right to receive notice of, attend, vote and speak at general meetings.

A holder of ordinary shares is entitled to one vote per ordinary share held when a vote is taken on a poll and one vote only when a vote is taken on a
show of hands.

During the year ended 31 December 2015, $175 million shares were repurchased at an average price of 195.6p, buying back 59.0 million shares
(2014: 68.8 million shares), which had an accretive impact on EPS of approximately 2%. $1 million of costs were incurred relating to the repurchase,
largely relating to stamp duty. As at 23 February 2016, Man Group had an unexpired authority to repurchase up to 247,247,179 of its ordinary shares. A
special resolution will be proposed at the forthcoming Annual General Meeting, pursuant to which the Company will seek authority to repurchase up
to 254,951,571 of its ordinary shares, representing 14.99% of the issued share capital at 23 February 2016.

Man Group plc Annual Report 2015 121

FINANCIAL STATEMENTS
N O T E S T O T H E G R O U P F I N A N C I A L S T A T E M E N T S
C O N T I N U E D

2 3 . C A P I T A L M A N A G E M E N T C O N T I N U E D

Deferred sterling shares
50,000 unlisted deferred sterling shares, representing 0.1% of the Company’s issued share capital with a par value of £1 per share, were issued due
to the redenomination of the ordinary share capital into USD. These shares are necessary for the Company to continue to comply with Section 763 of
the Companies Act 2006. The deferred sterling shares are freely transferable and have no rights to participate in the profits of the Company, to attend,
speak or vote at any general meeting and no right to participate in any distribution in a winding up except for a return of the nominal value in certain
limited circumstances.

Issued and fully paid share capital

At 1 January
Issue of ordinary shares:
– Purchase and cancellation of own shares
– Partnership Plans and Sharesave

Year ended 31 December 2015

Year ended 31 December 2014

Ordinary
shares
Number

Unlisted
deferred
Sterling
shares
Number

Nominal
value
$m

Ordinary
shares
Number

Unlisted
deferred
Sterling
shares
Number

1,756,290,714

50,000

61 1,823,733,081

50,000

(58,996,084)
3,516,383

–
–

(2)
–

(68,835,247)
1,392,880

–
–

At 31 December

1,700,811,013

50,000

59 1,756,290,714

50,000

Share capital and reserves

At 1 January 2015
Purchase and cancellation of own shares
Share awards/options

At 31 December 2015

At 1 January 2014
Purchase and cancellation of own shares
Share awards/options

At 31 December 2014

Share
capital

Share
premium
account

Capital
redemption
reserve

Merger
reserve

Reorganisation
reserve

61
(2)
–

63
(2)
–

7
–
7

5
–
2

2
2
–

–
2
–

491
–
–

491

491
–
–

491

632
–
–

632

632
–
–

632

Nominal
value
$m

(2)
–

Total

1,193
–
7

1,200

1,191
–
2

1,193

122 Man Group plc Annual Report 2015

2 3 . C A P I T A L M A N A G E M E N T C O N T I N U E D

Revaluation reserves and retained earnings

Available-for-
sale reserve

Cash flow
hedge
reserve1

Own shares
held by
Employee
Trusts

Cumulative
translation
adjustment1

Profit and
loss account

3
–
–
–
–
–
–
–
–
–
(1)
–
–
–

(16)
–
–
–
–
2
(9)
–
–
–
18
–
–
–

(5)

(62)
3
–
(30)
27
–
–
–
–
–
–
–
–
–

(62)

(14)
(11)
–
–
–
–
–
–
–
–
–
–
–
–

(25)

1,330
–
15
–
(27)
–
–
(21)
4
2
–
(176)
(193)
171

1,105

Available-for-
sale reserve

Cash flow
hedge
reserve1

Own shares
held by
Employee
Trusts

Cumulative
translation
adjustment1

Profit and
loss account

3
–
–
–
–
–
–
–
–
–
–
–
–
–

14
–
–
–
–
–
3
(16)
–
–
(17)
–
–
–

(16)

(110)
7
–
–
(14)
55
–
–
–
–
–
–
–
–

(62)

4
(18)
–
–
–
–
–
–
–
–
–
–
–
–

(14)

1,305
–
9
2
–
(55)
–
–
(21)
4
–
(116)
(163)
365

1,330

Total

1,241
(8)
15
(30)
–
2
(9)
(21)
4
2
17
(176)
(193)
171

1,015

Total

1,216
(11)
9
2
(14)
–
3
(16)
(21)
4
(17)
(116)
(163)
365

1,241

At 1 January 2015
Currency translation difference
Share-based payments charge for the year
Purchase of own shares by the Employee Trusts
Disposal of own shares by the Employee Trusts
Deferred tax credited on cash flow hedge movements
Fair value losses taken to equity
Revaluation of defined benefit pension scheme
Current tax credited to reserves – pension scheme
Deferred tax credited to reserves – pension scheme
Transfer to Group income statement
Share repurchases
Dividends
Profit for the year

At 31 December 2015

At 1 January 2014
Currency translation difference
Share-based payments charge for the year
Deferred tax credited to reserves – share-based payments
Purchase of own shares by the Employee Trusts
Disposal of own shares by the Employee Trusts
Deferred tax credited on cash flow hedge movements
Fair value losses taken to equity
Revaluation of defined benefit pension scheme
Current tax credited to reserves – pension scheme
Transfer to Group income statement
Share repurchases
Dividends
Profit for the year

At 31 December 2014

Note:
1 Details of the Group’s hedging arrangements are provided in Note 15.

2 4 . P E N S I O N B E N E F I T S

Man operates 12 (2014: 12) defined contribution plans and two (2014: two) funded defined benefit plans.

Defined contribution plans
Man pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. Man has no
further payment obligation once the contributions have been paid. Defined contribution pension costs totalled $9 million for the year to 31 December
2015 (2014: $8 million). The contributions are recognised as pension costs when they are due.

Defined benefit plans
A defined benefit plan creates a financial obligation to provide funding to the pension plan to provide a retired employee with pension benefits usually
dependent on one or more factors such as age, years of service and compensation. As with the vast majority of similar arrangements, Man ultimately
underwrites the risks related to the defined benefit plans. These risks include investment risks and demographic risks, such as members living longer
than expected.

The two defined benefit plans operated are the Man Group plc Pension Fund in the UK (the UK Plan) and the Man Group Pension Plan in Switzerland
(the Swiss Plan). At 31 December 2015, the UK plan comprised 91% (31 December 2014: 91%) of the Group’s total defined benefit pension obligations.

Man Group plc Annual Report 2015 123

FINANCIAL STATEMENTS

N O T E S T O T H E G R O U P F I N A N C I A L S T A T E M E N T S
C O N T I N U E D

2 4 . P E N S I O N B E N E F I T S C O N T I N U E D

The UK Plan is approved by HMRC for tax purposes, and is operated separately from Man and managed by an independent set of trustees. The
trustees are responsible for payment of the benefits and management of the UK Plan’s assets. Under UK regulations, Man and the trustees of the UK
Plan are required to agree a funding strategy and contribution schedule for the UK Plan.

In order to maintain flexibility with regards to the funding of the UK Plan, Man set up the Man Group Reservoir Trust (the Reservoir Trust) in 2010. Man
contributed $76 million (£50 million) of assets to the Reservoir Trust on 31 March 2010 and has committed to ensure the Reservoir Trust value remains
at least £69 million from 1 April 2013 or at the level of the funding deficit in the UK Plan, if lower. The Reservoir Trust gives the pension trustees comfort
that Man can fund a deficit at 31 December 2017 and in the event that the UK Plan is fully funded, allows Man to recover the assets so that the UK
Plan is not over funded.

The latest funding valuation of the UK Plan was carried out by independent qualified actuaries as at 31 December 2014 and indicated a deficit
of £11 million, after including £59 million of assets in the Reservoir Trust. To remove the funding deficit, Man agreed to make a cash payment of
£11.8 million to the UK Plan during 2015 along with a further payment in March 2018 of up to £69.0 million from the Reservoir Trust to cover any
remaining funding deficit. Cash contributions of £15.4 million were made to the UK Plan in the year to 31 December 2015 (including £3.6 million
of top-up payments to the Reservoir Trust in line with the requirements of the Reservoir Trust). If the contributions currently agreed are insufficient
to pay the benefits due, Man will need to make further contributions.

For the UK Plan, the Group has concluded that it has no requirement to adjust the balance sheet to recognise either a current surplus or a minimum
funding requirement on the basis that the Group has an unconditional right to a refund of a current or projected future surplus at some point in the
future for the UK Plan.

For the Swiss Plan, there is a small asset restriction at the 2015 year end. The Swiss Plan holds some of its assets in an “employer contribution
reserve”, which can be used to reduce the Group’s future contributions into the Plan. As the employer contribution reserve is less than the measured
surplus as at 31 December 2015, the surplus has been restricted to the value of the employer contribution reserve.

The UK plan was closed to new members in May 1999, and to future accrual in May 2011. Employed members of the UK plan retain enhanced
benefits, including a link to salary, on their accrued benefits in the UK plan. Future benefits are provided via a defined contribution plan.

In Switzerland, the Group operates a retirement foundation with assets which are held separately from the Group. This foundation covers the majority
of employees in Switzerland and provides benefits on a cash balance basis.

Each employee has a retirement account to which the employee and the Group make contributions at rates set out in the plan rules based on a
percentage of salary. Every year the pension fund commission (composed of employer and employee representatives) decides the level of interest, if
any, to apply to retirement accounts based on their agreed policy. At retirement an employee can take their retirement account as a lump sum or have
this paid as a pension.

In 2015 two changes were made to the structure of the benefits provided by the Swiss Plan, which led to the recognition of past service credits
totalling $4 million in the Group’s income statement.

The amounts recognised in the Group balance sheet are determined as follows:

Present value of funded obligations
Fair value of plan assets

Surplus
Amount not recognised due to asset ceiling - Swiss plan (see above)

Net pension asset in the Group balance sheet at year end

Our economic capital model includes capital in respect of a possible deficit in the pension plans.

31 December
2015

31 December
2014

(422)
471

49
(1)

(438)
483

45
–

124 Man Group plc Annual Report 2015

2 4 . P E N S I O N B E N E F I T S C O N T I N U E D

Pensions: actuarial information
Changes in the present value of the defined benefit obligations are as follows:

Present value of funded obligations at beginning of the year
Currency translation difference
Current service cost (employer portion)
Interest cost
Employee contributions
Remeasurements due to:
– changes in financial assumptions
– changes in demographic assumptions
– experience adjustments
Actual benefit payments
Past service costs
Curtailments and settlements

Present value of funded obligations at year end

Changes in the fair value of plan assets are as follows:

Fair value of plan assets at beginning of the year
Currency translation difference
Interest income on plan assets
Actual return on plan assets less interest on plan assets
Employer contributions/(repayments)
Employee contributions
Benefits paid
Assets distributed on curtailments and settlements

Fair value of plan assets at year end

Year ended
31 December
2015

Year ended
31 December
2014

438
(20)
3
14
1

(4)
8
–
(12)
(4)
(2)

422

413
(29)
2
17
1

61
–
(2)
(14)
–
(11)

438

Year ended
31 December
2015

Year ended
31 December
2014

483
(23)
16
(16)
24
1
(12)
(2)

471

484
(32)
21
38
(7)
1
(14)
(8)

483

The plan assets primarily relate to investments in bonds, liability-driven investments (LDIs) and diversified growth funds. The government bond assets
and diversified growth funds have prices quoted in active markets and the absolute return bonds and LDI are primarily unquoted. At 31 December
2015, around 60% of the plan assets relate to those with quoted prices and 40% with unquoted prices (2014: around 70% quoted and 30%
unquoted). The actual return on plan assets for the year to 31 December 2015 was nil (2014: $59 million).

The change in the net asset/(liability) recognised in the Group balance sheet is as follows:

Net pension asset at start of the year
Total pension credit
Amount recognised outside profit and loss
Employer contributions/(repayments)
Currency translation difference

Net pension asset at end of the year

The amounts recognised in the Group income statement are as follows:

Current service cost (employer portion)
Interest on net pension asset
Past service cost
Gains on settlement/curtailment

Total credit

There are no contributions expected to be paid during the year ending 31 December 2016.

Year ended
31 December
2015

Year ended
31 December
2014

45
3
(21)
24
(3)

71
5
(21)
(7)
(3)

Year ended
31 December
2015

Year ended
31 December
2014

3
(2)
(4)
–

(3)

2
(4)
–
(3)

(5)

Man Group plc Annual Report 2015 125

FINANCIAL STATEMENTS
N O T E S T O T H E G R O U P F I N A N C I A L S T A T E M E N T S
C O N T I N U E D

2 4 . P E N S I O N B E N E F I T S C O N T I N U E D

The amounts recognised in other comprehensive income are as follows:

Net actuarial gains/(losses) in the year due to
– changes in financial assumptions
– changes in demographic assumptions
– experience adjustments on benefit obligations
Actual return on plan assets less interest on plan assets
Adjustment to recognise the effect of the asset ceiling

Amount recognised in other comprehensive income

The change in the asset ceiling is as follows:

Opening asset ceiling
Net interest on asset ceiling
Losses

Closing asset ceiling

The most significant actuarial assumptions used in the valuations of the two plans are:

Discount rate
Price inflation
Future salary increases
Interest crediting rate
Social security increases
Pension in payment increases
Deferred pensions increases

Year ended
31 December
2015

Year ended
31 December
2014

4
(8)
–
(16)
(1)

(21)

(61)
–
2
38
–

(21)

Year ended
31 December
2015

Year ended
31 December
2014

–
–
1

–
–
–

–

UK plan

Swiss plan

31 December
2015
% pa

31 December
2014
% pa

31 December
2015
% pa

31 December
2014
% pa

3.7
3.3
3.3
–
–
3.7
5.0

3.6
3.0
3.0
–
–
3.6
5.0

1.2
1.3
1.3
1.2
1.0
–
–

1.1
1.4
1.4
1.1
1.0
–
–

At 31 December 2015, mortality rates in the UK plan are assumed to be in line with 100% of the S2NA Light tables for all members with pensions of
more than £50,000 pa at 31 December 2014 and S2NA tables for all other members (2014: 100% of the S1NA tables for all members). These mortality
tables are assumed to be projected by year of birth with allowance for future improvements in longevity in line with the 2015 CMI projections with a
long term rate of improvement of 1.25% pa for males and females (2014: in line with the 2014 CMI projections with a long-term rate of improvement of
1.25% pa for males and 1% pa for females).

At both 31 December 2014 and 31 December 2015 mortality rates in the Swiss plan are assumed to be in line with the Swiss BVG 2010 generational
tables.

Illustrative life expectancies are set out in the table below (the UK Plan life expectancies are based on the S2NA tables).

Life expectancy of male aged 60 at accounting date
Life expectancy of male aged 60 in 20 years
Life expectancy of female aged 60 at accounting date
Life expectancy of female aged 60 in 20 years

UK plan

Swiss plan

31 December
2015

31 December
2014

31 December
2015

31 December
2014

27.1
28.9
29.3
31.3

27.0
29.0
29.1
30.7

26.3
28.1
28.9
30.6

126 Man Group plc Annual Report 2015

2 4 . P E N S I O N B E N E F I T S C O N T I N U E D

The table below illustrates the impact on the assessed value of the benefit obligations from changing the actuarial assumptions. The calculations
to produce the below figures have been carried out using the same method and data as Man’s pension figures. Each assumption has been varied
individually and a combination of changes in assumptions could produce a different result.

As at 31 December 2015:

Discount rate decreased by 0.1% pa
Inflation rate increased by 0.1% pa
One year increase in assumed life expectancy

UK Plan

Swiss Plan

Increase in
obligation

6
2
13

1
–
1

The duration of a pension plan is the average term over which the plan’s benefits are expected to fall due, weighted by the present value of each
expected benefit payment. The duration of the UK plan is approximately 17 years, and the duration of the Swiss plan is approximately 20 years.

The assets held by the two plans as at 31 December 2015 are as follows:

Swiss equities
Non-Swiss equities
Index linked government bonds
Absolute return bonds
Swiss bonds
Non-Swiss bonds
Property
Hedge funds
LDI
Diversified growth funds
Cash
Other
Reservoir Trust (fund of hedge funds)

Total assets

UK plan

Swiss plan

–
–
36
48
–
–
–
–
111
108
34
–
92

429

–
–
9
11
–
–
–
–
26
25
8
–
21

100

5
7
–
–
7
11
7
1
–
–
2
2
–

12
17
–
–
16
26
15
3
–
–
6
5
–

100

The plans do not invest directly in property occupied by Man or in Man’s own transferable financial securities.

The UK Plan’s investment strategy is broadly split into “growth” and “matching” portfolios. The matching portfolio is invested primarily in government
and corporate bonds (the latter through the “Absolute return bonds” holding), and liability driven investment (LDI) funds. These are primarily intended
to match the movement in the UK Plan’s funding liabilities, and therefore remove most of the interest rate risk and some of the inflation rate risk (on a
Technical Provisions basis).

As the Swiss Plan is essentially a defined contribution plan with guarantees, the assets held aim to be at least as much as the total of the member
account balances at any point in time. Member account balances cannot reduce, but interest is only applied to the account balances when sufficient
surplus assets are available. As such there is no specific asset/liability matching strategy in place, but if the liabilities (the sum of the member account
balances) ever exceed the value of the assets, the Company will consider how to remove a deficit as quickly as possible.

2 5 . S E G M E N T A L A N A L Y S I S

The criteria for identifying an operating segment is that it is a component of Man whose results are regularly reviewed by the Board and the Executive
Committee to make decisions about resources to be allocated to the segment and to assess its performance. Management information regarding
revenues, gross management fee margins, investment performance and distribution costs relevant to the operation of the investment managers,
products and the investor base are reviewed by the Board and the Executive Committee. A centralised shared infrastructure for operations, product
structuring, distribution and support functions means that operating costs are not allocated to constituent parts of the investment management
businesses. As a result, performance is assessed, resources are allocated and other strategic and financial management decisions are determined by
the Board and the Executive Committee on the basis of the investment management business of Man as a whole. Accordingly we operate and report
as a single segment investment management business, together with relevant information regarding FUM flows, gross margins, and distribution costs
to allow for the analysis of the direct contribution of products and the respective investor base.

Man Group plc Annual Report 2015 127

FINANCIAL STATEMENTS
N O T E S T O T H E G R O U P F I N A N C I A L S T A T E M E N T S
C O N T I N U E D

2 6 . G E O G R A P H I C A L D I S C L O S U R E

Bermuda
Cayman Islands
Cook Islands
Ireland
United Kingdom and the Channel Islands
United States of America
Other countries

Year ended 31 December 2015

Year ended 31 December 2014

Non-current
assets

Revenues by
fund location

Non-current
assets

Revenues by
fund location

33
1
–
–
81
1,382
88

1,585

92
383
71
212
151
87
139

1,135

32
–
–
–
76
1,433
136

1,677

86
425
63
234
208
34
100

1,150

Disclosure of revenue by geographic location is based on the registered domicile of the fund entity paying Man fees. Revenue from any single fund
during the year did not exceed 10% of total revenues. Non-current assets above are allocated based on where the assets are located, and include
investments in associates, leasehold improvements and equipment, and goodwill and other intangible assets.

Average number of directors, employees and partners
The table below provides average headcount by location for the current and prior year.

United Kingdom and the Channel Islands
Switzerland
US
Other countries

Average number of directors, employees and partners

2 7 . F O R E I G N C U R R E N C I E S

Year ended
31 December
2015

Year ended
31 December
2014

681
118
199
108

640
150
105
106

1,106

1,001

The majority of revenues, assets, liabilities and funding are denominated in USD and therefore Man’s presentation currency is USD.

For consolidated entities that have a functional currency other than USD, the assets and liabilities are translated into USD at the balance sheet date
rate. Income and expenses are translated at the average rate for the period in which the transactions occur. Resulting exchange differences are
recorded in other comprehensive income.

For consolidated entities with a USD functional currency, monetary assets and liabilities denominated in foreign currencies are translated at each
balance sheet date rate. Transactions denominated in foreign currencies are converted at the spot rate at the date of the transaction or if appropriate
the average rate for the month in which the transaction occurs. Resulting exchange differences are recognised in the Group income statement.

128 Man Group plc Annual Report 2015

2 8 . F A I R V A L U E O F F I N A N C I A L A S S E T S / L I A B I L I T I E S

Man discloses the fair value measurement of financial assets and liabilities using three levels, as follows:

– Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
– Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly

(i.e. derived from prices).

– Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair value of financial assets and liabilities can be analysed as follows:

Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Total

31 December 2015

31 December 2014

Financial assets held at fair value:
Investments in fund products and

other investments (Note 16)
Investments in funds relating to
consolidated fund entities
(Note 16)

Derivative financial instruments

(Note 17)

Financial liabilities held at fair value:
Derivative financial instruments

(Note 18)

Contingent consideration (Note 18)

–

–
–

–

162

329

493

8
–

–

–
206

206

228

329

559

8
206

214

–

–
–

–

167

–

170

15
–

–

–
145

145

213

–

216

15
145

160

During the year, there were no significant changes in the business or economic circumstances that affected the fair value of Man’s financial assets
and no significant transfers of financial assets or liabilities held at fair value between categories. For investments in fund products, Level 2 investments
comprise holdings primarily in unlisted, open-ended, active and liquid funds, such as seeding investments, which have weekly or daily pricing derived
from third-party information.

A transfer into Level 3 would be deemed to occur where the level of prolonged activity, as evidenced by subscriptions and redemptions, is deemed
insufficient to support a Level 2 classification. This, as well as other factors such as a deterioration of liquidity in the underlying investments, would
result in a Level 3 classification. The material holdings within this category are priced on a recurring basis based on information supplied by third
parties without adjustment. Liquidity premium adjustments of $2 million (2014: $2 million) have been applied to gated, suspended, side-pocketed or
otherwise illiquid Level 3 investments. The range of liquidity premium adjustments is from 12% to 33% based on the expected timeframe for exit. A
larger liquidity adjustment is applied where the exit is further in the future. Reasonable changes in the liquidity premium assumptions would not have a
significant impact on the fair value.

The fair value of non-current assets and liabilities held for sale (Note 16.3) are equal to the carrying values of $188 million (2014: $186 million) and
$69 million respectively (2014: $33 million), and would be classified within Level 2 ($108 million) and Level 3 ($11 million). In 2014 non-current assets
and liabilities held for sale would have been classified as Level 2.

Man Group plc Annual Report 2015 129

FINANCIAL STATEMENTS

N O T E S T O T H E G R O U P F I N A N C I A L S T A T E M E N T S
C O N T I N U E D

2 8 . F A I R V A L U E O F F I N A N C I A L A S S E T S / L I A B I L I T I E S C O N T I N U E D

The basis of measuring the fair value of Level 3 investments is outlined in Note 16.2. The movements in Level 3 financial assets and financial liabilities
measured at fair value are as follows:

Level 3 financial assets held at fair value
At beginning of the year
Purchases
Total gains in the Group statement of comprehensive income

Included in profit for the year
Included in other comprehensive income

Sales or settlements
Transfers into Level 3
Transfers out of Level 3

At year end

Total gains for the year included in the Group statement of

comprehensive income for assets held at year end

Year ended 31 December 2015

Year ended 31 December 2014

Financial
assets at fair
value through
profit or loss

Available-for-
sale financial
assets

Financial
assets at fair
value through
profit or loss

Available-for-
sale financial
assets

Total

42
25
9

9
–

(14)
–
–

–
–
–

–
–

–
–
–

–

42
25
9

9
–

(14)
–
–

66
2
5

5
–

(14)
–
(17)

1
–
–

–
–

(1)
–
–

–

Total

67
2
5

5
–

(15)
–
(17)

Level 3 financial liabilities held at fair value
At beginning of the year
Purchases
Total charges/(gains) in the Group statement of comprehensive income

Included in profit for the year
Included in other comprehensive income

Settlements
Other adjustments

At year end

Total charges/(gains) for the year included in the Group statement of comprehensive income for liabilities held at

year end

Year ended
31 December
2015

Year ended
31 December
2014

145
23
79

79
–

(41)
–

206

44
118
(7)

(7)
–

(10)
–

145

(7)

The financial liabilities in Level 3 primarily relate to the contingent consideration payable at 31 December 2015 to the former owners of Numeric ($164
million), with the remaining $42 million relating to contingent consideration for other smaller acquisitions. In 2014 these largely relate to the contingent
consideration payable in relation to the Numeric and FRM acquisitions.

For Numeric the contingent consideration relates to an ongoing 18.3% equity interest of Numeric management in the business and profit interests of
16.5%, pursuant to a call and put option arrangement. The call and put options structure means that it is virtually certain that Man will elect to, or be
obliged to, purchase the interests held by Numeric management at five (call option) or five and a half (put option) years post-closing. The maximum
aggregate amount payable by Man in respect of the option consideration is capped at $275 million.

The fair values are based on discounted cash flow calculations, which represent the expected future profits of each business as per the earn-out
arrangements. The fair values are determined using a combination of inputs, such as weighted average cost of capital, high water mark levels,
net management fee margins, performance, operating margins and the growth in FUM, as applicable. The discount rates applied are 11% for
management fees and 17% for performance fees.

The most significant inputs into the valuations are as follows:

Weighted average net management fee margin (over the remaining earn-out period)
Compound growth in average FUM (over the remaining earn-out period)

Year ended
31 December
2015
Numeric

0.5%
12%

130 Man Group plc Annual Report 2015

2 8 . F A I R V A L U E O F F I N A N C I A L A S S E T S / L I A B I L I T I E S C O N T I N U E D

Changes in inputs would result in the following decrease/(increase) of the contingent consideration creditor:

Weighted average net management fee margin:
0.1% increase
0.1% decrease

Compound growth in average FUM:
1% increase
1% decrease

Year ended
31 December
2015
Numeric

34
(34)

6
(6)

Increases/(decreases) in the fair value of the contingent consideration creditor would have a corresponding (expense)/gain in the Group income
statement.

2 9 . R E L A T E D P A R T Y T R A N S A C T I O N S

Related parties comprise key management personnel and associates. All transactions with related parties were carried out on an arm’s length basis.
Refer to Note 20 for details of income earned from associates. Management fees earned from fund entities in which Man holds a controlling interest
are detailed in Note 16. Contingent consideration payable to Numeric management is detailed in Note 28.

The Executive Committee, together with the non-executive directors, are considered to be the Company’s key management, being those directors,
partners and employees having authority and responsibility for planning, directing and controlling the activities at Man. The average key management
headcount for the year to 31 December 2015 has increased by around 9% from 2014. Key management compensation is reported in the table below.

Key management compensation

Salaries and other short-term employee benefits1
Share-based payments
Fund product based payment charge
Pension costs
Termination benefits

Total

Note:
1

Includes salary, benefits (including cash pension allowance) and cash bonus.

Year ended
31 December
2015
$’000

Year ended
31 December
2014
$’000

33,152
4,408
6,095
405
–

44,060

27,895
4,522
6,426
426
765

40,034

3 0 . F I N A N C I A L G U A R A N T E E S A N D C O M M I T M E N T S

30.1 Committed purchase agreements (CPAs)
For certain structured products, Man has previously made commitments to buy underlying investments in specific fund products at a discount to net
asset value, if requested by the fund board directors, to create liquidity. Man has the option to defer a purchase, if so called, for three months. The
commitment at 31 December 2015 covers investments in existing fund products totalling $19 million (2014: $34 million).

Given the risk and liquidity management at the portfolio level by the investment manager the residual liquidity and market risk to Man from CPAs is not
significant. The stressed liquidity and risk modelling performed across all structured products includes the CPAs and is provided for in our liquidity and
risk management framework.

30.2 Daylight settlement facilities
Man from time to time provides a guarantee over certain bank accounts of structured product entities to secure daylight settlement facilities which
allow for the efficient movement of cash during the trading day. In aggregate these guarantees had a notional amount of $50 million (2014: $50 million).
Ordinarily no net exposure exists at the end of any given day and the fair value of these commitments has been determined to be nil (2014: nil).

30.3 Intra-day and overnight credit facilities
Man guarantees the obligations under a $500 million intra-day (2014: $500 million) and $25 million overnight credit facilities (2014: $25 million), used
to settle the majority of the Group’s banking arrangements. As at 31 December 2015, the exposure under the intra-day facility is nil (2014: nil) and the
overnight facility exposure is nil (2014: nil). The fair value of these commitments has been determined to be nil (2014: nil).

Man Group plc Annual Report 2015 131

FINANCIAL STATEMENTS

N O T E S T O T H E G R O U P F I N A N C I A L S T A T E M E N T S
C O N T I N U E D

3 0 . F I N A N C I A L G U A R A N T E E S A N D C O M M I T M E N T S C O N T I N U E D

30.4 Operating lease commitments
Operating lease commitments due within one year totalled $29 million (2014: $35 million), $70 million from one to five years (2014: $93 million) and
$261 million due after five years (2014: $289 million). The commitments include non-cancellable offsetting sublease arrangements, totalling $90 million
(2014: $82 million) for commitments less than five years and $52 million (2014: $73 million) for commitments over five years. Rent and associated
expenses for all leases are recognised on a straight-line basis over the life of the respective lease.

The operating lease commitments primarily include the agreements for lease contracts for the headquarters at Riverbank House, London (expiring in
2035), the UK Data Centres (Woking expiring in 2019 and Redhill expiring in 2025), and our main New York office (expiring in 2022), which aggregate to
$340 million (2014: $362 million).

3 1 . O T H E R M A T T E R S

Man Group is subject to various other claims, assessments, regulatory enquiries and investigations in the normal course of its business. The directors
do not expect these enquiries to have a material adverse effect on the financial position of the Group.

3 2 . G R O U P I N V E S T M E N T S

Details of the Group’s subsidiaries, which have been consolidated into the Group’s results, are provided below, with details of investments in
associates provided in Note 20. The country of operation is the same as the country of incorporation, the year end is 31 December, and effective
group interest represents both the percentage held and voting rights, unless otherwise stated.

Principal operating subsidiaries

Asset management
Man Investments Limited
AHL Partners LLP1
Man Investments AG
Man Investments Inc
Man Investments (CH) AG
GLG Partners LP
Numeric Investors LLC2

Group services company
E D & F Man Limited

Group treasury and holding company
Man Investments Finance Limited

Group holding and other subsidiaries

Man Group plc
Man Strategic Holdings Limited
Man Group Holdings Limited
Man Group UK Limited
GLG Partners Limited
Laurel Heights LLP1
Man Investments Australia Limited
Man Australia LP
FA Sub 3 Limited
GLG Holdings Limited
Mount Granite
GLG Partners (Cayman) Limited
GLG Partners Intermediate GP Ltd
Man Investments (Shanghai) Limited
Man Group Japan Limited
FRM Investment Management Limited
GLG Partners Hong Kong Limited
Man Investments (Hong Kong) Limited
GLG Partners Asset Management Limited
RBH Holdings (Jersey) Limited
Man (Europe) AG
Man Fund Management Netherlands BV
E. D. & F. Man Investments B.V.

132 Man Group plc Annual Report 2015

Direct or
indirect

Country of
incorporation

Effective
group interest
%

UK
Indirect
Indirect
UK
Indirect Switzerland
US
Indirect
Indirect Switzerland
UK
Indirect
US
Indirect

Indirect

UK
UK
Direct
UK
Indirect
UK
Indirect
UK
Indirect
UK
Indirect
Australia
Indirect
Australia
Indirect
BVI
Indirect
BVI
Indirect
BVI
Indirect
Cayman
Indirect
Cayman
Indirect
China
Indirect
Guernsey
Indirect
Guernsey
Indirect
Hong Kong
Indirect
Hong Kong
Indirect
Ireland
Indirect
Indirect
Jersey
Indirect Liechtenstein
Indirect Netherlands
Indirect Netherlands

100
100
100
100
100
100
100

100

100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100

3 2 . G R O U P I N V E S T M E N T S C O N T I N U E D

Group holding and other subsidiaries

Man Investments Middle East Limited
Man Australia GP Limited
Man Fund Management UK Limited (previously GLG Partners Investment Funds Ltd)
Financial Risk Management Limited
Man Investments Holdings Limited
Man Mash Limited
Man Valuation Services Limited
GLG Partners GP LLC
Man Investments Finance Inc.
Seabrook Holding Inc
Man Investments Holding Inc.
Man Investments (USA) Corp.
Man Investments USA Holdings Inc.
Man Washington Inc.
GLG Capital Management LLC
Man Litchfield Inc.
GLG LLC
Man UK Strategies Limited
Numeric Holdings LLC2
Silvermine Capital Management LLC
Man NewSmith Japan Limited
FRM Investment Management GP (USA) LLC (previously Pine Grove Asset Management GP LLC)
FRM Investment Management (USA) LLC (previously Pine Grove Asset Management LLC)
Man Group Services Limited
Man Solutions Limited (previously GLG Partners International Ltd)
Empyrean Re Limited
Lavender Heights LLP
Knox Pines Limited
Mount Garnet Limited
FRM Investments (USA) LLC
GLG Inc.
GLG Holdings Inc.
GLG Partners Inc.
GLG Partners Services LP
GLG Partners Services Limited
Man Fund Management (Guernsey) Limited
Man Fund Management Limited
GLG Partners UK Group Ltd
GLG Partners UK Holdings Ltd
GLG Partners UK Ltd
FRM Thames Fund General Partner 1 Limited
RMF Co-Investment Limited (Class A & B)
Man Principal Strategies Corp
Numeric Midco LLC2
Man GLG Credit Advisers AG
FRM Holdings Limited
FA Sub 2 Limited
E. D. & F. Man Investments Limited
E. D. & F. Man Capital Investments Limited
Man Financial Australia Pty Limited (in liquidation)
Man Investments (UK) Limited (in liquidation)
Man-AHL (USA) Limited (in liquidation)
Man Investments (Luxembourg) S.A. (in liquidation)
Empyrean Re (Canada) Inc. (in liquidation)
Man Corporate Services (Ireland) Limited (in liquidation)
Man Investments (Singapore) Pte. Ltd (in liquidation)
FCA Guernsey Limited (in liquidation)
Man Bluesky Limited (in liquidation)

Direct or
indirect

Country of
incorporation

Effective
group interest
%

UAE
Indirect
UK
Indirect
UK
Indirect
UK
Indirect
UK
Indirect
UK
Indirect
UK
Indirect
US
Indirect
US
Indirect
US
Indirect
US
Indirect
US
Indirect
US
Indirect
US
Indirect
US
Indirect
US
Indirect
US
Indirect
UK
Indirect
US
Indirect
US
Indirect
Japan
Indirect
US
Indirect
US
Indirect
UK
Indirect
UK
Indirect
Bermuda
Indirect
US
Indirect
BVI
Indirect
BVI
Indirect
US
Indirect
US
Indirect
US
Indirect
US
Indirect
Cayman
Indirect
Cayman
Indirect
Guernsey
Indirect
Ireland
Indirect
UK
Indirect
UK
Indirect
UK
Indirect
Cayman
Indirect
Cayman
Indirect
US
Indirect
US
Indirect
Switzerland
Indirect
Jersey
Indirect
BVI
Indirect
Jersey
Indirect
Jersey
Indirect
Australia
Indirect
UK
Indirect
UK
Indirect
Indirect Luxembourg
Canada
Indirect
Ireland
Indirect
Singapore
Indirect
Guernsey
Indirect
UK
Indirect

100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
82
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
82
100
100
100
100
100
100
100
100
100
100
100
100
100
100

Notes:
1 The financial year end is 31 March.
2 Numeric Management hold an 18.3% equity interest in the business as part of the acquisition deferred consideration, which is deemed to be a financial liability (Note 28).

Man Group plc Annual Report 2015 133

FINANCIAL STATEMENTS
N O T E S T O T H E G R O U P F I N A N C I A L S T A T E M E N T S
C O N T I N U E D

3 2 . G R O U P I N V E S T M E N T S C O N T I N U E D

Consolidated structured entities
The following investment funds, which the Group is deemed to control, have been consolidated (Note 16):

Strategy

Man Numeric Market Neutral1
Man Alternative Beta Strategies1
Man Numeric International Small Cap1
Man GLG Unconstrained Emerging Equity1
Man GLG International Equity1
GLG CLO II1
Man GLG Select Opportunities fund2
Man AHL Target Risk2
Man Systematic Directional Equities Alternative2

Notes:
1 Classified as non-current assets and liabilities held for sale (Note 16.3).
2 Consolidated on a line-by-line basis (Note 16.3).

Country of
incorporation/
principal place
of operation

% of net asset
value held

Ireland
Cayman
Cayman
Ireland
Cayman
Ireland
Cayman
Ireland
Ireland

60
100
100
45
100
34
58
62
64

134 Man Group plc Annual Report 2015

P A R E N T C O M P A N Y
F I N A N C I A L I N F O R M A T I O N

B A L A N C E S H E E T

Fixed assets
Investment in subsidiaries

Current assets
Debtors

Creditors – amounts falling due within one year
Other creditors and accruals

Net current liabilities

Creditors – amounts falling after more than one year
Borrowings

Total assets less current liabilities

Capital and reserves
Called up share capital
Share premium account
Capital Reserve
Merger reserve
Profit and loss account

Total shareholders’ funds

At 31
December
2015

At 31
December
2014

Note

2,439

198

(5)

193

(176)

(171)

(149)

2,483

2,119

59
14
4
491
1,915

2,483

61
7
2
491
1,558

2,119

The financial statements of the Company (registered number: 08172396) were approved by the Board of directors and authorised for issue on
24 February 2016, and were signed on its behalf by:

Emmanuel Roman
Chief Executive Officer

Jonathan Sorrell
Chief Financial Officer

S T A T E M E N T O F C H A N G E S I N E Q U I T Y

Called up
share
capital

Share
Premium
account

Capital
reserve

Merger
reserve

Profit and loss
account

At 1 January 2014
Issue of ordinary share capital
Repurchase of shares
Loss for the financial year
Dividends

At 31 December 2014

Issue of ordinary share capital
Repurchase of shares
Profit for the financial year
Dividends

At 31 December 2015

63
–
(2)
–
–

–
(2)
–
–

5
2
–
–
–

7
–
–
–

–
–
2
–
–

–
2
–
–

491
–
–
–
–

1,858
–
(116)
(21)
(163)

Total

2,417
2
(116)
(21)
(163)

491

1,558

2,119

–
–
–
–

–
(176)
726
(193)

7
(176)
726
(193)

491

1,915

2,483

Man Group plc Annual Report 2015 135

The allotted and fully paid share capital of the Company is detailed in Note 23 of the Group financial statements.

FINANCIAL STATEMENTS

N O T E S T O T H E C O M P A N Y F I N A N C I A L S T A T E M E N T S

1 . B A S I S O F P R E P A R A T I O N

The separate financial statements of the Company are presented as required by the Companies Act 2006.

The Company meets the definition of a qualifying entity under FRS 100 (Financial Reporting Standard 100) issued by the Financial Reporting Council.
Accordingly, in the year ended 31 December 2015 the Company has changed its accounting framework from pre-2015 UK GAAP to FRS 101
(Financial Reporting Standard 101) ‘Reduced Disclosure Framework’ as issued by the Financial Reporting Council and has, in doing so, applied
the requirements of IFRS 1.6-33 and related appendices. These financial statements were prepared in accordance with FRS 101 as issued by the
Financial Reporting Council. The transition is not considered to have had a material effect on the financial statements, and no restatement of prior year
comparatives is required as a result of the adoption of FRS 101 in the current year.

As permitted by FRS 101, the Company has taken advantage of the disclosure exemptions available under that standard in relation to share-based
payments, financial instruments, capital management, presentation of comparative information in respect of certain assets, presentation of a cash-
flow statement and certain related party transactions. Where required, equivalent disclosures are given in the Group financial statements.

The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are the same as those set out in
Note 1 to the Group financial statements except as noted below.

The Company’s financial statements are prepared on a going concern basis. For further details, refer to Note 1 to the Group financial statements.

Result for the year
The profit after tax for the year was $726 million (2014: $21 million loss). During the year the Company received dividend income of $750 million from
subsidiaries (2014: nil). In accordance with Section 408 of the Act, a separate profit and loss account has not been presented for the Company. Details
of audit fees are included on page 60.

Foreign currency transactions
Foreign currency transactions are translated into the functional currency using the spot rate at the date of the transaction. Foreign exchange gains and
losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities denominated in foreign currencies
at period end exchange rates, are recognised in the profit and loss account.

Dividends
Dividend distributions to the Company’s shareholders are recognised directly in equity in the period in which the dividend is paid or approved by
the Company’s shareholders, if required. Dividends received from subsidiary undertakings are recognised as income in the period in which they are
received. Refer to Note 12 to the Group financial statements for details of dividends paid during the year.

2 . I N V E S T M E N T S I N S U B S I D I A R I E S

Shares in Group undertakings
At 1 January and 31 December

31
December
2015

31
December
2014

2,439

The Company’s shares in subsidiary undertakings are stated in the balance sheet of the Company at cost less provision for any impairment incurred.
A complete list of the Company’s direct and indirect subsidiaries are provided in Note 32 to the Group financial statements.

3 . D E B T O R S – A M O U N T S F A L L I N G D U E W I T H I N O N E Y E A R

Current tax asset
Amounts owed by Group undertakings

31
December
2015

31
December
2014

6
192

198

5
–

4 . C R E D I T O R S – A M O U N T S F A L L I N G D U E W I T H I N O N E Y E A R

Amounts owed to Group undertakings
Other creditors

136 Man Group plc Annual Report 2015

31
December
2015

31
December
2014

2
3

173
3

176

5 . C R E D I T O R S – A M O U N T S F A L L I N G D U E A F T E R M O R E T H A N
O N E Y E A R

Borrowings relate to the 2024 fixed rate reset callable guaranteed subordinated notes issued by the Company, as detailed in Note 15 to the Group
financial statements.

6 . D I R E C T O R S ’ R E M U N E R A T I O N

Details of the individual directors’ emoluments and interests are disclosed in the Directors’ remuneration report on pages 64 to 87. The directors of the
Company were paid by another Group company in the year.

7 . S T A T U T O R Y A N D O T H E R I N F O R M A T I O N

Shares in the Company are awarded to directors and employees through the Group’s share schemes. Details relating to these share grants are
provided in the Directors’ remuneration report on pages 64 to 87.

Man Group plc Annual Report 2015 137

FINANCIAL STATEMENTS

F I V E Y E A R R E C O R D

Income statement
Profit before adjusting items
Adjusting items1

Pre-tax profit/(loss)
Taxation

Profit/(loss) for the period

12 months to
31 December
2015

12 months to
31 December
2014

12 months to
31 December
2013

12 months to
31 December
2012
(Restated)3

9 months to
31 December
2011

400
(216)

184
(13)

171

481
(97)

384
(19)

365

297
(241)

56
16

275
(1,023)

(748)
(39)

(787)

262
(69)

193
(34)

159

Earnings per share (diluted)

10.0

20.5

2.9

(45.8)

7.6

Balance sheet ($m)
Net cash
Net assets

Other statistics
Post-tax return on equity (%)

Ordinary dividends per share (cents)

Funds under management ($bn)

458
2,215

589
2,434

992
2,407

1,141
2,910

573
4,060

7.5

15.8

10.2

78.7

10.1

72.9

2.1

7.9

54.1

(23.2)

22.0

57.0

4.6

16.5

58.4

Average headcount2

1,106

1,001

1,163

1,458

1,596

Sterling/US Dollar exchange rates
Average
Period end

0.6544
0.6786

0.6072
0.6419

0.6388
0.6040

0.6307
0.6158

0.6233
0.6435

Notes:
1 Statutory profit/(loss) before tax is adjusted to give a fuller understanding of the underlying profitability of the business. See Note 2 to the Group financial statements.
2 The average headcount includes partners.
3 Restated for the impact of the adoption of IAS 19 (Revised) in 2013.

138 Man Group plc Annual Report 2015

S H A R E H O L D E R I N F O R M A T I O N

In this section we have provided some
key information to assist you in managing
your shareholding in Man. If you have a
question that is not answered below, you
can contact us by email: shareholder@
man.com

Useful websites
References are made throughout this section to two websites which you
will find useful for managing your shareholding in Man and for finding out
more about the Company:

Man (www.man.com)
The Man corporate website contains a wealth of information about
the Company including details of the industry in which we operate,
our strategy and business performance, recent news from Man and
corporate responsibility initiatives. The Investor Relations section is a
key tool for shareholders with information on share price and financial
results, reports and presentations. This section of the website also gives
access to the Shareholder Information pages which contain dividend and
shareholder meeting details and useful Frequently Asked Questions.

Equiniti Shareview (www.shareview.co.uk/shareholders)
Man’s register of shareholders is maintained by Equiniti, the Company’s
Registrars. Many aspects of managing your shares such as checking your
current shareholding, managing dividend payments, and updating your
contact details can be carried out by registering on the Equiniti Shareview
website. To do this you will need your shareholder reference number which
can be found on your share certificate or dividend tax voucher.

Dividends
Final dividend for the year ended 31 December 2015

3.40 pence per share

The directors have recommended a final dividend of 3.40 pence per
share in respect of the year ended 31 December 2015. Payment of this
dividend is subject to approval at the 2016 Annual General Meeting
(AGM). Key dates relating to this dividend are given below:

Ex-dividend date

Record date

DRIP election date

AGM (to approve final dividend)

Payment date

CREST accounts credited with DRIP shares

DRIP share certificates received

21 April 2016

22 April 2016

6 May 2016

13 May 2016

18 May 2016

19 May 2016

Dividend policy
Man’s dividend policy is to pay out at least 100% of adjusted
management fee earnings per share in each financial year by way of
ordinary dividend. In addition, the Group expects to generate significant
surplus capital over time, primarily from net performance fee earnings.
Available surpluses, after taking into account our required capital
(including accruals for future earn-out payments), potential strategic
opportunities and a prudent buffer, will be distributed to shareholders
over time, by way of higher dividend payments and/or share repurchases.
During 2015 the Company undertook a share repurchase programme
pursuant to which $175 million of surplus capital was returned to
shareholders. As announced at the time of our 2015 year end results,
the Board has decided to retain all of the Group’s current surplus capital,
but will review this decision throughout the year..

Dividend payment methods
You can choose to receive your dividend in a number of ways. Dividends
will automatically be paid to you by cheque and sent to your registered
address unless you have chosen one of the options below:

1. Direct payment to your bank: We recommend that you apply

for cash dividends to be paid directly into your UK bank or building
society account to speed up the payment process and to avoid the
risk of cheques becoming lost or delayed in the post. The associated
dividend confirmation will be sent direct to your registered address.
To switch to this method of payment simply download a dividend
mandate form from the Dividends section of our corporate website.
Alternatively, dividend mandate forms are available from the Equiniti
Shareview website. If you have any queries you may telephone Equiniti
on 0371 384 21121, who will be able to assist.

2. Overseas payment service2: If you live overseas, Equiniti offers an
overseas payment service which is available in certain countries. This
may make it possible to receive dividends direct into your bank account
in your local currency. Further information can be found on the Equiniti
Shareview website or via the Equiniti helpline 0371 384 21121.

3. Dividend Reinvestment Plan (DRIP): The Company is pleased to
offer a DRIP which gives shareholders the opportunity to build their
shareholding in Man Group plc in a convenient and cost-effective way.
Instead of receiving your dividend in cash, you receive as many whole
shares as can be bought with your dividend, taking into account
related purchase costs; any residual cash is then carried forward and
added to your next dividend. If you wish to join the DRIP, you can
download copies of the DRIP terms and conditions and the DRIP
mandate form from the Dividends section of the Man website. Simply
complete the DRIP mandate form and return it to Equiniti. Should
you have any questions regarding the DRIP, or to request a paper
mandate form, please contact Equiniti on 0371 384 22681. Please
note that if you wish to join the DRIP in time for the payment of the
forthcoming final dividend for the year ended 31 December 2015,
Equiniti must have received your instruction by 5.00pm on 22 April
2016. Instructions received after this date will be applied to the next
dividend payment.

Notes:
1 Lines are open from 8.30am to 5.30pm, each business day.
2 Please note that a payment charge will be deducted from each individual payment

before conversion to your local currency.

Man Group plc Annual Report 2015 139

OTHER INFORMATION
S H A R E H O L D E R I N F O R M A T I O N C O N T I N U E D

Dividends paid in the 2015/16 tax year

Dividend
no

Payment
date

Amount per
share (p)

Ex-dividend
date

Record
date

DRIP share
price (p)

DRIP
purchase
date

Interim dividend for the year ended 31 Dec 2015
Final dividend for the year ended 31 Dec 2014

O/17 02/09/2015
O/16 15/05/2015

3.47
3.95

13/08/15
23/04/15

14/08/15
24/04/15

152.23
176.998

03/09/15
15/05/15

Dividend history
To help shareholders with their tax affairs, details of dividends paid in
the 2015/16 tax year can be found above. Please note that the dividend
amounts are declared in US Dollars but paid in Sterling. For ease of
reference the Sterling dividend amounts have been detailed in the
table. For details of historical payments, please refer to the Dividends
section of our corporate website which can be found under Shareholder
Information.

unsolicited advice, offers to buy shares at a discount, or offers of free
reports about the Company. It is estimated that £200 million is lost in this
way in the UK each year, with an average loss of £20,000 per investor.
The Financial Conduct Authority (FCA) provides helpful information about
such scams on its website, including practical tips on how to protect
your savings and how to report a suspected investment scam. Man
encourages its shareholders to read the information on the site which can
be accessed at www.fca.org.uk/consumers/scams.

Changes to tax on dividend income
HM Revenue & Customs have announced that, from 6 April 2016, the
dividend tax credit is being replaced with a tax-free dividend allowance
of £5,000 per annum. As such, the tax voucher that previously
accompanied your dividend will be replaced with a dividend confirmation.
For further information, and to see how you might be affected by the
changes, please refer to the HMRC website.

Shareholder communications
Annual and Interim Reports
Man publishes an Annual and Interim Report every year. The Annual
Report is sent to shareholders in March through the post unless the
shareholder has chosen to receive shareholder communications
electronically (see ‘E-communications’ below). The Interim Report is
published on the website in early August and printed copies are available
on request from the Company Secretary.

E-communications
You can help Man to reduce its printing and postage costs as well as its
carbon footprint by signing up to receive communications electronically
rather than receiving printed documents such as annual reports and
notices of AGMs in the post. To sign up for e-communications, simply
register on the Equiniti Shareview website. Once registered, you will need
to change your mailing preference to e-communications and provide your
email address. You will then receive an email each time a shareholder
communication or document becomes available on the Man website.

Managing your shareholding
Online, by post, or by phone
Many aspects of your shareholding can be managed by registering on
the Equiniti Shareview website. For enquiries about your shareholding you
can also contact Equiniti in writing at Equiniti, Aspect House, Spencer
Road, Lancing, West Sussex BN99 6DA, or by telephone on 0371
384 21121 or Text tel 0371 384 22551, quoting Ref No 874. Callers from
outside the UK should telephone +44 121 415 7592.

Share dealing service
Equiniti provides a share dealing facility through which you can buy or
sell Man Group plc shares in the UK. The service is provided by Equiniti
Financial Services Limited and can be accessed via the dealing section
of the Equiniti Shareview website (www.shareview.co.uk/dealing). To use
Equiniti’s telephone dealing service, please call 03456 037 037 between
8.00am and 4.30pm Monday to Friday. You can also buy and sell shares
through any authorised stockbroker or bank that offers a share dealing
service in the UK, or in your country of residence if outside the UK.

Don’t fall victim to share fraud!
Even seasoned investors have been caught out by sophisticated share
or investment scams where smooth-talking fraudsters cold call from
‘boiler rooms’ to offer them worthless, overpriced or even non-existent
shares, or to buy shares they currently hold at a price higher than the
market value. All shareholders are advised to be extremely wary of any

140 Man Group plc Annual Report 2015

How your details are protected from cybercrime
Man takes the protection of its shareholders’ personal data from the
ever-increasing threat of cybercrime very seriously. Shareholder details
are maintained by Equiniti, our Registrars, who safeguard this information
to the highest standards, based on the 20 core critical controls
recommended by the Centre for the Protection of National Infrastructure
(CPNI). These can be viewed at www.cpni.gov.uk/advice/ cyber/Critical-
controls. Equiniti’s security measures include multiple levels of firewall,
no wireless access to the corporate network, and regular external
vulnerability scans and system penetration tests.

Company contact details
Registered office
Man Group plc
Riverbank House
2 Swan Lane
London
EC4R 3AD

Telephone: 020 7144 1000
Fax: 020 7144 1923
Web: www.man.com

Registered in England and Wales with registered no: 08172396

Investor Relations
investor@man.com
Head of Investor Relations – Andrea Waters

Company Secretariat
shareholder@man.com
Company Secretary – Rachel Rowson

Company advisers
Independent auditor
Deloitte LLP

Corporate brokers
Bank of America Merrill Lynch
Credit Suisse
Goldman Sachs

Public relations
RLM Finsbury

Registrars
Equiniti

Note:
1 Lines are open from 8.30am to 5.30pm, each business day.

man.com

Man Group plc
Riverbank House
2 Swan Lane
London
EC4R 3AD

+44 (0)20 7144 1000