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Man Group plc
Annual Report 2021
Talent +
Technology
Strategic report
Man Group plc | Annual Report 2021
Man Group
isateis a technology-
empowered
activeine investment
management firm
with
1,450+
employees
from
55+
countries
We trade in
800+
markets around the world
and offer
75+
alternative and long-only
investment strategies
to help our
650+
institutional clients
meet their investment goals
01
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
Strategic report
At a glance 02
Chair’s statement 04
Our business model 10
Our market 12
Our strategy 14
Chief Executive Officer’s review 16
Key performance indicators 22
Chief Financial Officer’s review 24
Risk management 30
People and culture 38
Responsible business 46
Our policies and practices 61
Governance
Governance at a glance 68
Chair’s governance overview 70
Board of Directors 72
Senior Executive Committee 74
Board activities timeline 76
Stakeholder engagement 78
Board effectiveness 86
Board evaluation 88
Audit and Risk Committee report 90
Nomination Committee report 97
Directors’ Remuneration report 102
Directors’ report 134
Financial statements
Independent auditor’s report 138
Group income statement 146
Group statement of
comprehensive income 146
Group balance sheet 147
Group cash flow statement 148
Group statement of changes
in equity 149
Notes to the Group financial
statements 150
Five-year record 182
Alternative performance measures 183
Shareholder information
Shareholder information 188
Glossary 190
The Strategic report was approved by
the Board and signed on its behalf by:
Luke Ellis Chief Executive Officer
Contents
02
Strategic report
Man Group plc | Annual Report 2021
At a glance
Our proposition is strong
Our purpose
We are an active investment
managementfirm focused on delivering
outperformance for our clients and the
millions of savers they represent.
Our culture
We have an inclusive, meritocratic culture
designed to achieve excellence through
collaboration and differentiated thinking.
Our principles
Our business principles are designed
todistil and define our key priorities,
focus and culture.
Performance
We focus on achieving superior
risk-adjusted performance.
Clients
Our clients are at the heart
of everything that we do.
Responsibility
Our people do the right thing
and conduct business with the
highest standards of integrity.
Excellence
Good is not enough, we strive
to be excellent in all we do.
Differentiation
We seek to be differentiated
and original in our thinking.
Meritocracy
We succeed through talent,
commitment, diligence and teamwork.
We actively manage investments of
$148.6 billion in alternative and long-only
strategies, run on a quantitative and
discretionary basis across liquid and private
markets for our global client base and the
millions of individuals they represent.
We drive long-term growth through our
continued focus on:
Talent +
A deep and diverse pool of talent is vital to our continued
success. Our priority is to hire, develop and retain world-
class talent across the firm, and to foster a diverse and
inclusive environment to support our collaborative culture.
+
go topage 20
Technology +
Technology is part of our DNA. With 35 years of quant
investing experience, we harness the power of technology to
improve performance and efficiency across alpha generation,
trading and execution, and our operating platform.
+
go topage 08
Sustainability +
Making a positive impact on our stakeholders, as an
investorand as a firm, is a key priority for us. We conduct
our business with the highest level of integrity and
continuously challenge ourselves to be better.
+
go topage 44
03
Strategic report | Governance | Financial statements | Shareholder information
A
bsolute
return
T
otal
return
M
ulti-manager
solutions
S
ystematic
long-only
D
iscretionary
l
ong-only
$41.2bn
$35.4bn
$15.0bn
$36.1bn
$20.9bn
Man Group plc | Annual Report 2021
AUM by client domicile
29%
Americas
53%
EMEA
18%
Asia Pacific
$148.6bn
AUM by strategy type AUM by product category
Alternative $91.6bn
Long-only $57.0bn
04
Strategic report
Man Group plc | Annual Report 2021
Chair’s statement
Overview of the year
To all intents and purposes, 2021 felt like
anextension of 2020. The world remained
gripped by the COVID-19 pandemic, though
gradually science and human ingenuity
havecreated opportunities for respite.
Governments and central banks were still
inclined to be accommodating to the
markets, and stimulus packages remained
inplace in most Western economies.
Against this backdrop, Man Group has had
ahighly successful year. The markets have
been by and large active and strong, and
both our algorithmic investing engines and
discretionary portfolio managers have been
able to create considerable value for our
clients. We delivered 10.4% of absolute
investment performance during the year,
which means our clients earned $12.5 billion
byinvesting with Man Group. On occasion,
the markets have reacted abruptly to
surprise news flow: the identification of the
Omicron variant of the coronavirus perturbed
almost all markets at thetime of the US
Thanksgiving holiday. However, as a general
picture, equity, commodity and credit
markets remained strong, despite severe
economic challenges in the real economy.
The S&P 500 gained 27% for the year, MSCI
World was up 20%, and WTI Oil gained 55%
while the Barclays Global Aggregate lost 5%.
When investing our clients’ assets, we strive
to achieve outperformance against the
benchmarks mutually agreed with clients.
When we succeed for our clients, we
succeed for our shareholders and our staff.
In 2021, the tremendous value we created
for clients translates directly into our core
performance fees. These were $569 million
in the year, compared with $179 million in
2020. Performance fees are the main driver
of the year-on-year improvement in our
profits, whether measured on a profit before
tax or earnings per share basis.
We delivered 10.4% of absolute investment performance
during the year, which means our investors earned
$12.5billion by investing with Man Group.
John Cryan | Chair
05
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
As a direct consequence of the overall strong
performance of the assets we manage,
combined with net inflows of new money in
the year, all adjusted for currency
fluctuations, our assets under management
ended the year at $148.6 billion, a record
figure. This is also a driver of our profits, as
we charge fees for management of clients’
funds based on the value of those funds
from time to time. Our core net management
fee revenue for 2021 was also strong at
$877 million, an increase of 20% over the
commensurate amount for 2020. The
increase is driven by higher assets under
management, with some marginal negative
impact from the underlying asset mix and the
ongoing, market-wide fee pressure to which
we have to respond to remain competitive.
Overall profitability for the year under review
was significantly impacted by the strong
increase in performance fee profits year on
year. Core profit before tax for the firm as
awhole for 2021 rose by 132% compared
tothe prior year, growing from a healthy
$284 million to $658 million this year.
In 2021, we made an adjustment to our
dividend and capital return policy, which
reflected feedback from institutional
shareholders. We have moved to a progressive
dividend policy, which is more typical of the
companies listed on the London Stock
Exchange and demonstrates our confidence
inthe future growth prospects of our business.
Our target is to be able to recommend annual
dividends that grow year on year. This comes
with the obvious proviso that we would only
recommend increasing dividends if our
performance and the capital position of the
Company warranted increases. Clearly the
strong performance in 2021 provides us with
the opportunity to meet our dividend target.
In line with our new policy, the Board has
recommended a final dividend of 8.4¢
pershare, which, when taken together
withthe interim dividend already distributed,
amounts to a full-year dividend of 14.0¢ per
share. This compares with the aggregate
dividend for 2020 of 10.6¢ per share, a 32%
increase. The final dividend recommendation is,
as usual, subject to approval by shareholders
atthe AGM to be held in May2022.
In addition to our dividend distribution
policy,we review periodically our reserves
ofretained earnings — those we have not
previously distributed to shareholders as
dividends or share buybacks or used for
acquisitions — to determine whether or not
they exceed the amounts we need to retain
to ensure the safe, prudential and flexible
management of the Company in all reasonable
circumstances. Where we believe we have
excess capital over and above those needs,
we seek to return further value to shareholders
beyond our regular dividends.
Recently we have done this by way of
sharebuyback programmes. In July and
November of 2021, we completed buybacks
of approximately $100 million that we
announced in September 2020 and with
the2021 interim results respectively. In early
December 2021, your Board approved a
further buyback operation of up to $250 million,
to be implemented in tranches, with the first
one of $125 million under way. Together with
the earlier $100 million buyback announced
in 2021 and the proposed final dividend,
$544 million of total shareholder returns have
been announced in relation to 2021. The
timing of share buybacks is, of course,
subject to future prevailing market conditions,
and cannot be predicted with great accuracy.
In 2021, we repurchased an aggregate
$180million worth of shares under our
former and current buyback programmes.
Assets under management
$148.6bn
+20%
2020: $123.6bn
Statutory EPS (diluted)
33.8¢
+263%
2020: 9.3¢
Core EPS
38.7¢
+139%
2020: 16.2¢
Proposed dividend per share
14.0¢
+32%
2020: 10.6¢
Female representation on our Board
50%
at 31 December 2021
1 Man Group’s alternative performance measures are outlined on pages 183 to 187.
06
Strategic report
Man Group plc | Annual Report 2021
Chair’s statement continued
Our role as an asset manager
Our core strategic intent is to meet the needs
of our clients in creating or preserving value
for the many millions of individual savers
andpensioners that they represent. We
seekto outperform the markets through
active management of the funds under our
stewardship. To achieve this, we employ
experienced investment professionals and
highly skilled technologists, combining their
strengths to create strategies that we believe
can generate the desired outperformance.
The Board spends a significant amount of time
reviewing the performance of our investment
strategies. We monitor the sourcing and
development of business partnerships with
ourmajor clients. We ensure that management
is focused on the creation of customised
solutions to meet investor needs. Investment
inour people and our technology is critical
toour continuing success.
We at Man Group recognise that part of our
fiduciary duty to our clients is the responsible
investment of the funds we manage on their
and their own clients’ behalf. In ensuring the
sound stewardship of our investors’ capital
we seek not only to align with the values of
our clients but also balance the expectations
of our shareholders and all the other
stakeholders of Man Group. We view
Environmental, Social and Governance
(ESG)as a natural complement to traditional
financial analysis, resulting in a more
comprehensive assessment of a company’s
long-term prospects. Man Group takes a
diversified approach to Responsible
Investment (RI) across its business and
recognises the importance of responsible
investing across all asset classes and
investment styles where applicable. Each of
our strategies aims to apply the best practices
of RI in the way that is most relevant to their
fields of research through a variety of different
methods. We offer our investment managers
proprietary tools to monitor and manage
ESGfactors as well as maintaining a list of
companies whose securities are ineligible
forinclusion in our portfolios. A significant
proportion of our assets under management
fall under the category of ESG-integrated
funds, as determined by the Global
Sustainable Investment Alliance. As of the
endof 2021, ESG-integrated assets under
management totalled $55.2 billion,
representing 37% of our total assets under
management at the time. Further details
arecontained in the responsible business
section on page 46.
Finally, as a reflection of the growing
importance of ESG considerations for all
stakeholders, we are proposing to introduce
explicit ESG targets in the remuneration of
executive directors from 2022.
Working from home
Since the onset of the coronavirus pandemic
in early 2020, we have responded to the
various work-from-home government
directives in the numerous jurisdictions
inwhich we do business.
At times during the year, all bar a handful
ofessential support staff dedicated to
maintenance of our premises have been
forced by government directives to connect
remotely to the Company’s systems.
Wecontinue to operate remote working
seamlessly, with no noticeable impact on
theeffectiveness of our operations or on the
strength of our controls. The Board remains
justifiably proud of the resilience, dedication
and commitment shown by all our staff
throughout the year. In addition to
responding to government directives and
guidance, we believe that an element of
remote working will remain in operation long
after the pandemic is over, as it affords our
people the opportunity to rebalance their
work, family and social time. To that end, we
have been operating both work-from-home
and hybrid home and office working models.
Under the tagline ‘Hub, Club, Home and
Roam’, we offer staff an agile working
environment, with a range of options
designed to ensure all our staff feel safe
andcomfortable in our employment.
Management remains extremely attentive
tothe needs of individuals and the specific
and unique challenges each member of
stafffaces when working from their home
environment. The Board has been hugely
impressed by the thoughtful and caring
approach management has taken to the
physical, mental and emotional well-being
ofeach and every one at Man Group during
these trying times.
People and culture
Our success in attracting, retaining,
developing and motivating staff is of vital
importance to our future and remains a key
area of focus for the Board and senior
management. An element of this effort
involves us ensuring that Man Group remains
a highly attractive place to work. Increasingly
too, it means ensuring that we espouse and
act with corporate social responsibility. Firms
that are well run get their Corporate Social
Responsibility (CSR) engagement right.
Good governance, a social conscience,
respect for the environment: these should
bethe very least that we expect from a 21st
century company. As your Board, it is our
duty to foster a culture ofresponsibility and
decency in everything Man Group does.
The Board also oversees management’s
alignment of our culture with the ethical
values we embrace, for example, becoming
a signatory to the United Nations Global
Compact. We also encourage management
in its promotion of diversity, equity and
inclusion of staff at all levels of the
organisation in order to better reflect the
diverse perspectives of our stakeholders.
Toensure that feedback and ideas from our
people are captured, we conducted another
employee survey during the year. We were
particularly keen to understand the views
ofstaff in the context of remote working.
Iampleased to report that the results
ofthesurvey, while indicating ideas for
improvement, were highly encouraging.
1 Further details on the United Nations Global Compact and
our signatory status can be found in the CSR Brochure.
07
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
Community
We are conscious of the impact our
organisation has on the broader community,
and we aim to give back and contribute
positively to those around us. We achieve
this primarily through our work with the Man
Charitable Trust in the UK and our US-based
Man Charitable Foundation, to which Man
Group donated a total of $4 million in 2021.
Our employees are actively involved in
charitable initiatives and volunteering
opportunities through our ManKind
Programme. ManKind gives employees
theopportunity to take two days’ paid leave
each year to volunteer with a charity of their
choice. In addition, this year all staff were
offered £400 each to donate to a food bank
or a charity focused on homelessness
orpoverty in their community.
The firm continues to develop its work
topromote diversity and social mobility
ineducation, particularly in STEM subjects
(science, technology, engineering and
mathematics). As part of this, Man Group
continues to support the King’s College
London Mathematics School and we are
now in our third year of working with the
students and teachers there. In 2021, we
also extended our focus on STEM to include
‘responsibility’ and sponsored Green Skills
Week, run by Speakers4Schools. Luke Ellis,
Robyn Grew and several of our staff spoke
about responsible investing and corporate
social responsibility at a number of schools.
You can read about how the Board
considers the interests of our stakeholders
when complying with the obligations of
section 172 of the Companies Act 2006
onpage 68.
Shareholders
The Board gives high priority to shareholder
and investor communications. It receives
regular investor reports which detail the
feedback from investor meetings and from
engagement with the various shareholders’
representative organisations. The Board has
also been focused on ensuring proactive
engagement with shareholders in specific
relation to remuneration matters.
In 2021, we held our Annual General Meeting
using a webcasting facility. The system
allowed for shareholders to pose questions
in real-time to the Board using an in-built
chat function. It remains to be seen whether
we will be able to hold our 2022 meeting
inperson.
Board changes
Mark Jones was appointed as Deputy
CEOof Man Group on 1 October 2021 and
stepped down from the Board on that date.
Iwould like to thank Mark for the significant
contribution he made to the firm as CFO
andwish him the very best for his new role.
Antoine Forterre, previously co-CEO of Man
AHL, took over the CFO role on 1 October
2021. Antoine brings a wealth of knowledge
and experience from his previous roles at
Man Group and he has quickly settled into
his new responsibilities. I am very much
looking forward to our continued work together.
In early December, we announced that
DevSanyal will be stepping down from our
Board after a full term of service upon the
completion of our AGM in 2022. Dev has
been an outstanding director since he joined
our Board in 2013. His sage advice and
strategic insights have been invaluable
sources of guidance to Board and
management alike. I would like to thank
himfor his tremendous contribution and
wishhimwell. Zoe Cruz will also be
steppingdown from our Board following the
2022 AGM. I would like to thank Zoe for her
excellent contribution to the Board over the
past four years, particularly her insight on
global financial markets and strong US
perspective, and wish her all the best for
thefuture. Finally, I am pleased to report
thatJackie Hunt has been appointed to the
Board with effect from 28 February 2022.
Jackie brings substantial asset management,
financial and executive management
experience and will be a valuable addition
tothe Board. We are very much looking
forward to working with her.
Workforce engagement
When the Board takes important decisions,
it always gives specific consideration to how
those decisions might impact staff. We also
monitor feedback from staff on the choices
made. As part of this process, we engage
formally and directly with our employees
across the globe in specific fora. Dame
KateBarker and Zoe Cruz are the Board’s
designated representatives, and have lead
this engagement. Ceci Kurzman will assume
these responsibilities from Zoe from March
2022. More generally, we encourage all
Board members to engage with staff in
formal or informal settings. Given pandemic-
related restrictions on face-to-face
gatherings, direct engagement by the Board
with the workforce in 2021 has continued
tobe somewhat restricted and tailored to
remote working. The Board as a whole has
discussed and considered the feedback
received to date, and we continue to assess
what may be the most effective means of
incorporating the interests of staff more
explicitly into Board decision-making.
On behalf of the Board, I would like to thank
all my colleagues for their dedication and
hard work, and all our shareholders for
theircontinuing support.
John Cryan
Chair
Our success in attracting, retaining, developing
andmotivating staff is of vital importance to our future
andremains a key area of focus for the Board and
seniormanagement.
John Cryan | Chair
Strategic report
Man Group plc | Annual Report 2021
Technology+
Innovation
08
Man Group plc | Annual Report 2021
Overview
Technology is part of our DNA. For us, it
isn’t just about making better investment
decisions; it permeates our culture and
powers everything we do. We have
invested in and built a single robust
technology platform that supports all parts
of our business, from alpha generation,
portfolio management, trade execution,
riskmanagement and operations all the
way through to compliance and fund
accounting. Our unique collaboration with
Oxford University (Oxford-Man Institute)
provides us with a direct connection to
cutting-edge machine learning research
and allows for the cross-pollination of
ideasbetween the investment and
academic communities.
For more information on technology, please visit:
https://www.man.com/technology
Strategy spotlight
AHL TargetRisk
• Launched: 2014
• Multi-asset, long-only strategy
• Systematic techniques to manage risk actively
• AUM at December 2021: $18.7bn, 67% growth
in 12 months
570+
quantitative researchers and
technologists
75%
of trades automated and routed using
machine learning techniques
150bn+
data points captured weekly
09
Strategic report | Governance | Financial statements | Shareholder information
Strategic report
Man Group plc | Annual Report 2021
Our business model
Agile and responsible
Our clients are at the heart of everything we
doandour strengths allow us to help them meet
theirinvestment goals through value-added active
asset management.
Range of
investment
styles
Cutting-edge
technology
Sustainability
focused
Diverse
talent pool
Customised
solutions
Single point
of contact for our
clients
Underpinned by
Risk
management
see page 30
Strong
capital base
see page 29
Governance
framework
see page 68
Our competitive advantage…
10
Man Group plc | Annual Report 2021
•
Single point of contact for our clients
We serve millions of underlying savers through
longstanding relationships with the largest institutions
and intermediaries in the world, and put our clients’
needs at the centre of everything we do.
•
Range of investment styles
We offer alternative and long-only strategies run on a
quantitative and discretionary basis across liquid and
private markets, where each team has the autonomy
toapply their own specific approach.
•
Diverse talent pool
We are fundamentally a people business. Our talent
andcollaborative culture are vital components to
ensurewe deliver the best possible outcomes for
allourstakeholders. See page 38 for further details.
•
Customised solutions
We understand the unique needs of each of our clients
and have the ability to create solutions tailored to meet
their individual risk and return requirements.
•
Sustainability focused
We recognise the importance of a responsible approach
to investing our clients’ assets and running Man Group
ina sustainable way as we seek to grow.
•
Cutting-edge technology
We harness the power of technology to improve
performance and efficiency across everything from alpha
generation and risk management to trade execution and
our operating infrastructure.
Creating value
We believe the combination of profit growth, capital
generation and dividend yield provides a highly
attractive total return to our shareholders over time.
Capital growth from performance in our investment
strategies together with net inflows from our clients
drive organic revenue growth. The operating leverage
inherent in our business and reinforced by our
technology means profits can grow faster than
revenues if we maintain cost discipline, and this
inturnsupports shareholder returns.
Delivering for all our stakeholders
Clients
Absolute
investment performance
$12.5bn
of gains for clients in 2021
see page 26
Servicing clients’ needs
62%
AUM customised for individual
client needs
Shareholders
Shareholder
returns
$1.7bn
of dividends and buybacks
in the last five years
see page 25
Dividends and
share buybacks
$544m
in relation to 2021
Employees
Employee
engagement score
81%
see page 39
Internal transfers
226
Communities
Employees
volunteered
1,200+
hours both remotely and
in-person during 2021
see page 43
Donations
£400
offered to all our employees
todonate to a local food bank
orhomeless shelter
11
Strategic report | Governance | Financial statements | Shareholder information
Strategic report
Man Group plc | Annual Report 2021
Our market
Market environment
and industry trends
We are well positioned for continued growth against
thebackdrop of the key trends affecting the asset
management industry.
Market Industry
Macro environment Inflation New markets Allocations to alternatives ESG Technology
Description Description
• After the volatility of 2020, global equity
markets continued to rally through 2021
with the S&P 500 and the MSCI World
index ending the year near all-time highs.
• By the end of 2021, the Shiller cyclically
adjusted price-to-earnings ratio reached
its highest levels since the height of the
dot-com bubble in 2000.
• The US ten-year yield increased
consistently from the 0.5% low in March
2020 to reach 1.5% by December 2021.
Longer-term bond yields also increased
but typically remained below pre-
pandemic averages.
• The US consumer price index rose 7.0%
2
in the year to December 2021, the highest
increase since 1982.
• The equivalent 4.8% rise in the UK was
the largest in a decade.
• Inflation, likely to be particularly
challenging for fixed income securities,
isexpected to drive demand for bond
replacement strategies and alternatives
more broadly.
• Cryptocurrencies were among the
best-performing asset classes in 2021
andcontinued to draw institutional interest
with the combined market value of the
most frequently traded coins passing
$2trillion by December 2021.
• China confirmed the gradual opening of
itscapital markets to foreign institutional
investors, notably via relaxing some
oftheconstraints around QFII quotas.
• The electronification of the credit market
structure remained a key trend in fixed
income markets. In October 2021, 37%
ofhigh-grade US corporate bond trading
happened electronically, up from 21%
inearly 2019, according to Coalition
Greenwich.
• Assets across the hedge fund industry
exceeded $4 trillion for the first time
in2021.
• Having navigated equity and commodity
market volatility, rising rates and inflationary
pressure, global institutional investors are
beginning to increase their allocations
toliquid alternatives.
• 2021 brought a number of significant
changes for ESG within the investment
management industry.
• March 2021 marked the beginning
ofEuropean ESG regulatory oversight,
highlighted by the EU’s Sustainable
Finance Disclosure Regulation (SFDR)
imposing mandatory ESG disclosure
requirements for asset managers and
other financial market participants.
• Net zero carbon emissions became
awidely held target across the public
andprivate sectors.
• Effective stewardship continued to gain
momentum as an important competitive
differentiator.
• 95% of the asset managers surveyed
in‘The Future of Asset Management’
report by Accenture believed that
technology, data and digital capabilities
will be key differentiators in the future
ofasset management.
What this means for Man Group What this means for Man Group
• Elevated equity and bond valuations
make a compelling case for investing
inalternatives. We are a market leader
inalternatives
1
, with over 35 years
ofexperience in liquid alternative
investment strategies.
• Many of our strategies have the potential
to generate alpha irrespective of the
direction of prevailing market trends,
positioning uswell to protect client
capitalthrough turbulent periods.
• By trading a wide range of macro
investments, as well as traditional
assetclasses, our strategies are able
togenerate diversifying alpha in varied
macro regimes.
• We continue to maintain the highest
standards of risk management across
oursuite of product offerings.
• We do not focus on market timing,
instead offering a breadth of capabilities
that are able to profit through upward
ordownward trends in the market.
• We believe some of our alternative
strategies canmimic bond returns while
adding favourable characteristics,
including targeting inflation protection.
• We believe our diversified trend-following
strategies are particularly well placed to
perform through periods of high inflation
3
.
• Interest rate increases and tapering of
quantitative easing have led to a rotation
away from growth stocks, which could
support our more value-oriented
long-only strategies.
• We have a long track record of trading
newasset classes and frontier markets.
• Man Group first started trading Bitcoin
futures in January 2018, adding Ether
futures in February 2021.
• We are investigating utilising
cryptocurrencies in some of our
macrostrategies.
• We continue to be early investors in a range
of China strategies, and see opportunity
for further growth in both discretionary
andsystematic investment styles.
• Our fixed income quantitative investment
strategies are using the growing amount
ofdata available on the fixed income and
credit markets to develop new strategies.
• Our strong performance in 2021 and
deepclient relationships position us well
tobenefit from industry-wide tailwinds.
• Alternative strategies made up 62% of
ourAUM as at December 2021. These
relatively higher-fee and alpha-oriented
products are in high demand and are
supported by solid investment
performance in the year.
• We also offer multi-manager solutions
which leverage our operational expertise,
breadth of investment styles and internal
infrastructure to service large sophisticated
clients in order to meet their individual
requirements.
• We aim to be a leader in responsible
investment across our investment
strategies.
• We have committed to the Net Zero Asset
Manager Initiative, targeting net zero
carbon emissions across our investment
portfolios by 2050.
• We are investing significantly in our climate
resources and capabilities.
• We have established the Man Responsible
Investment Oversight Committee and
havedeveloped frameworks and control
functions in alignment with the European
Sustainable Finance Disclosure Regulation.
• We have invested heavily in developing
our proprietary technology infrastructure
to ensure we remain cutting edge.
• Our trading and asset management
operating platform is supported by over
570 quants, engineers and technologists.
• We employ machine learning and
proprietary algorithms for trading across
our asset management teams, creating
significant economies of scale for our
business and value for our clients.
• In January 2021, we announced the HUB
joint venture, in partnership with PIMCO,
IHS Markit, State Street, Microsoft and
McKinsey. HUB aims for the first time
tomake our technology available to third
parties over the cloud.
1 Source: P&I, largest hedge fund managers in 2021.
2 Before seasonal adjustment.
3 See ‘The Best Strategies for Inflationary Times’, available via the Man Institute.
12
Man Group plc | Annual Report 2021
Market Industry
Macro environment Inflation New markets Allocations to alternatives ESG Technology
Description Description
• After the volatility of 2020, global equity
markets continued to rally through 2021
with the S&P 500 and the MSCI World
index ending the year near all-time highs.
• By the end of 2021, the Shiller cyclically
adjusted price-to-earnings ratio reached
its highest levels since the height of the
dot-com bubble in 2000.
• The US ten-year yield increased
consistently from the 0.5% low in March
2020 to reach 1.5% by December 2021.
Longer-term bond yields also increased
but typically remained below pre-
pandemic averages.
• The US consumer price index rose 7.0%
2
in the year to December 2021, the highest
increase since 1982.
• The equivalent 4.8% rise in the UK was
the largest in a decade.
• Inflation, likely to be particularly
challenging for fixed income securities,
isexpected to drive demand for bond
replacement strategies and alternatives
more broadly.
• Cryptocurrencies were among the
best-performing asset classes in 2021
andcontinued to draw institutional interest
with the combined market value of the
most frequently traded coins passing
$2trillion by December 2021.
• China confirmed the gradual opening of
itscapital markets to foreign institutional
investors, notably via relaxing some
oftheconstraints around QFII quotas.
• The electronification of the credit market
structure remained a key trend in fixed
income markets. In October 2021, 37%
ofhigh-grade US corporate bond trading
happened electronically, up from 21%
inearly 2019, according to Coalition
Greenwich.
• Assets across the hedge fund industry
exceeded $4 trillion for the first time
in2021.
• Having navigated equity and commodity
market volatility, rising rates and inflationary
pressure, global institutional investors are
beginning to increase their allocations
toliquid alternatives.
• 2021 brought a number of significant
changes for ESG within the investment
management industry.
• March 2021 marked the beginning
ofEuropean ESG regulatory oversight,
highlighted by the EU’s Sustainable
Finance Disclosure Regulation (SFDR)
imposing mandatory ESG disclosure
requirements for asset managers and
other financial market participants.
• Net zero carbon emissions became
awidely held target across the public
andprivate sectors.
• Effective stewardship continued to gain
momentum as an important competitive
differentiator.
• 95% of the asset managers surveyed
in‘The Future of Asset Management’
report by Accenture believed that
technology, data and digital capabilities
will be key differentiators in the future
ofasset management.
What this means for Man Group What this means for Man Group
• Elevated equity and bond valuations
make a compelling case for investing
inalternatives. We are a market leader
inalternatives
1
, with over 35 years
ofexperience in liquid alternative
investment strategies.
• Many of our strategies have the potential
to generate alpha irrespective of the
direction of prevailing market trends,
positioning uswell to protect client
capitalthrough turbulent periods.
• By trading a wide range of macro
investments, as well as traditional
assetclasses, our strategies are able
togenerate diversifying alpha in varied
macro regimes.
• We continue to maintain the highest
standards of risk management across
oursuite of product offerings.
• We do not focus on market timing,
instead offering a breadth of capabilities
that are able to profit through upward
ordownward trends in the market.
• We believe some of our alternative
strategies canmimic bond returns while
adding favourable characteristics,
including targeting inflation protection.
• We believe our diversified trend-following
strategies are particularly well placed to
perform through periods of high inflation
3
.
• Interest rate increases and tapering of
quantitative easing have led to a rotation
away from growth stocks, which could
support our more value-oriented
long-only strategies.
• We have a long track record of trading
newasset classes and frontier markets.
• Man Group first started trading Bitcoin
futures in January 2018, adding Ether
futures in February 2021.
• We are investigating utilising
cryptocurrencies in some of our
macrostrategies.
• We continue to be early investors in a range
of China strategies, and see opportunity
for further growth in both discretionary
andsystematic investment styles.
• Our fixed income quantitative investment
strategies are using the growing amount
ofdata available on the fixed income and
credit markets to develop new strategies.
• Our strong performance in 2021 and
deepclient relationships position us well
tobenefit from industry-wide tailwinds.
• Alternative strategies made up 62% of
ourAUM as at December 2021. These
relatively higher-fee and alpha-oriented
products are in high demand and are
supported by solid investment
performance in the year.
• We also offer multi-manager solutions
which leverage our operational expertise,
breadth of investment styles and internal
infrastructure to service large sophisticated
clients in order to meet their individual
requirements.
• We aim to be a leader in responsible
investment across our investment
strategies.
• We have committed to the Net Zero Asset
Manager Initiative, targeting net zero
carbon emissions across our investment
portfolios by 2050.
• We are investing significantly in our climate
resources and capabilities.
• We have established the Man Responsible
Investment Oversight Committee and
havedeveloped frameworks and control
functions in alignment with the European
Sustainable Finance Disclosure Regulation.
• We have invested heavily in developing
our proprietary technology infrastructure
to ensure we remain cutting edge.
• Our trading and asset management
operating platform is supported by over
570 quants, engineers and technologists.
• We employ machine learning and
proprietary algorithms for trading across
our asset management teams, creating
significant economies of scale for our
business and value for our clients.
• In January 2021, we announced the HUB
joint venture, in partnership with PIMCO,
IHS Markit, State Street, Microsoft and
McKinsey. HUB aims for the first time
tomake our technology available to third
parties over the cloud.
13
Strategic report | Governance | Financial statements | Shareholder information
Strategic report
Man Group plc | Annual Report 2021
Our strategy
Driving sustainable growth
We leverage our 35 years of experience investing in liquid
alternatives to deliver alpha and customised solutions for our
clients. Four main strategic pillars drive value for Man Group.
Innovative
investment strategies
Strong
client relationships
Efficient and
effective operations
Returns
to shareholders
Combining our exceptional talent
andmarket-leading technology
togenerate superior investment
returnsfor our clients.
Building long-term partnerships with
clients, through one point of contact,
to understand their needs and offer
solutions to meet their risk and
returnrequirements.
Harnessing technology to power
investment performance and
infrastructure, provide scalable options
for growth and create operating
efficiencies throughout the firm.
Generating excess capital to either
return to shareholders or reinvest
inourbusiness to create long-term
value.
16
new investment strategies seeded
across our business in 2021
$13.7bn
of net inflows in 2021, a new record
forour firm
60%
of our discretionary strategies
usealternative data in their
investmentprocesses
$544m
total shareholder returns announced
in relation to 2021
How we performed in 2021
• Absolute investment performance of
10.4%, or $12.5 billion, for our clients.
• Strong performance across alternative
andlong-only strategies, which resulted
inoverall asset weighted relative investment
outperformance of 1.9%.
• Exceptionally strong outperformance
fromsystematic long-only strategies,
which delivered 5.6% alpha relative
tobenchmarks.
• Core performance fees
1
of $569 million,
the strongest recorded in over ten years.
• Built on the success of Man AHL
TargetRisk by launching new related
strategies, scaling total assets to
$18.7billion.
• Announced the first close of our Man GPM
RI Community Housing strategy earlier in
the year, which is focused on addressing
the affordable housing shortage in the UK.
• Record net inflows in 2021 of $13.7billion,
outperforming the industry by 9.8%.
• Continued to engage with clients
regularly, attending 10,500 virtual client
meetings in 2021.
• Reinforced longstanding client
relationships: 48% of AUM from clients
invested in four or more products.
• Continued to see clients investing across
our platform: our top 50 clients invest in
an average of four products.
• Focused on building new relationships:
28 new clients invested $50 million or
more with us.
• Awarded a large, climate-focused
institutional mandate, which is a strong
endorsement of our ability to innovate
and deliver a bespoke product to meet
clients’ ESG goals.
• Hosted our annual Man Alternative
Investing Symposium and 41 other client
webinars attended by over 1,200 clients.
• Invested over $100 million into our
investment management and technology
capabilities which will further support our
ability to serve our clients globally.
• Seamlessly transitioned to an agile working
model as a result of our single operating
platform, which underpins our business
processes in a flexible and scalable way.
• Successfully completed the refurbishment
of our London office, Riverbank House,
aspace designed to support our new
agileworking model.
• Increased the number of high-performance
computing users by 16% to over 400
employees.
• Trained 115 employees in Python and
datascience skills through four internally
developed courses in order to technically
upskill our people across the business.
• Continued to actively foster a diverse
andinclusive culture across the business
through the Drive programme.
• Completed two $100 million share
buyback programmes announced
inSeptember 2020 and July 2021.
• Announced a further $250 million share
buyback programme in December 2021,
to be implemented in tranches.
• Full year 2021 dividend of 14.0¢, 32%
higher than full year 2020, under our
progressive dividend policy.
• Strong, liquid balance sheet with
$907million of net financial assets
1
.
• Identified and reviewed over 100
potential acquisition opportunities
duringthe year.
Objectives for 2022
• Generate value through expansion of
ouralternative and solutions offerings.
• Continue to develop ESG strategies
thatmeet client demand and add value
totheir portfolios.
• Attract and develop talent in sales,
providing relevant training and
development across all levels.
• Broaden and deepen existing client
relationships and continue to develop
relationships with key target clients
andinstitutions.
• Continue investment in technology
andtalent across both our investment
andinfrastructure teams to support
futuregrowth.
• Maintain focus on cost base and
carbonfootprint to ensure that we run
thebusiness effectively.
• Maintain focus on balance
sheetefficiency.
• Assess capital returns alongside
anyorganic deployment or potential
acquisition opportunities.
1 Man Group’s alternative performance measures are
outlined on pages 183 to 187.
2 ESG-oriented funds made up of 16 Article 8 funds
and1Article 9 fund under SFDR.
For more information on how KPIs relate to our strategy go to page 22.
For more information on how Risks relate to our strategy go to page 30.
14
Man Group plc | Annual Report 2021
Our climate strategy
At Man Group, we believe in the absolute
necessity of addressing the climate crisis.
As stewards of capital and long-term
investors, we acknowledge our
responsibility to address climate change-
related risks and opportunities through
ourown investment decisions, as well
asthrough our influence on investee
companies.
In July 2021, we became a signatory
oftheNet Zero Asset Managers initiative,
committing to the attainment of net zero
emissions within our investment portfolios
by 2050.
We view the climate transition not only
asarisk, but also as an important driver
ofgrowth for our business. We recognise
thecritical importance of adapting our
strategies to stay relevant to our clients
andcater to their long-term investment
objectives as we transition to a low-
carboneconomy.
We have also committed to achieve net
zero carbon in our workplaces by 2030
and were recognised as an FT Europe
Climate Leader in 2021 for our work
towards reducing emissions. We are
ontrack tomeet our targets.
$55.2bn
ESG-integrated assets under
management
17
ESG-oriented funds
2
launched
orconverted this year
How we address climate-related risks
and opportunities
1. Broaden our range of climate-focused
investment strategies.
2. Apply a rigorous, data-driven process
toESG integration.
3. Focus on our stewardship efforts to
drive meaningful, positive outcomes.
4. Contribute to industry-wide initiatives
and thought leadership.
5. Manage our operations
inasustainableway.
As our understanding of climate-related
risks and opportunities evolves and we
develop a better understanding of the
interdependencies among climate factors
and their impact on our business, we will
continue to refine our strategy to build
sustainable value for all our stakeholders
and support the transition to a low-
carboneconomy.
+ For our Responsible Business section
seepage 46
+ For our TCFD references seepages 61 and 62
Innovative
investment strategies
Strong
client relationships
Efficient and
effective operations
Returns
to shareholders
Combining our exceptional talent
andmarket-leading technology
togenerate superior investment
returnsfor our clients.
Building long-term partnerships with
clients, through one point of contact,
to understand their needs and offer
solutions to meet their risk and
returnrequirements.
Harnessing technology to power
investment performance and
infrastructure, provide scalable options
for growth and create operating
efficiencies throughout the firm.
Generating excess capital to either
return to shareholders or reinvest
inourbusiness to create long-term
value.
16
new investment strategies seeded
across our business in 2021
$13.7bn
of net inflows in 2021, a new record
forour firm
60%
of our discretionary strategies
usealternative data in their
investmentprocesses
$544m
total shareholder returns announced
in relation to 2021
How we performed in 2021
• Absolute investment performance of
10.4%, or $12.5 billion, for our clients.
• Strong performance across alternative
andlong-only strategies, which resulted
inoverall asset weighted relative investment
outperformance of 1.9%.
• Exceptionally strong outperformance
fromsystematic long-only strategies,
which delivered 5.6% alpha relative
tobenchmarks.
• Core performance fees
1
of $569 million,
the strongest recorded in over ten years.
• Built on the success of Man AHL
TargetRisk by launching new related
strategies, scaling total assets to
$18.7billion.
• Announced the first close of our Man GPM
RI Community Housing strategy earlier in
the year, which is focused on addressing
the affordable housing shortage in the UK.
• Record net inflows in 2021 of $13.7billion,
outperforming the industry by 9.8%.
• Continued to engage with clients
regularly, attending 10,500 virtual client
meetings in 2021.
• Reinforced longstanding client
relationships: 48% of AUM from clients
invested in four or more products.
• Continued to see clients investing across
our platform: our top 50 clients invest in
an average of four products.
• Focused on building new relationships:
28 new clients invested $50 million or
more with us.
• Awarded a large, climate-focused
institutional mandate, which is a strong
endorsement of our ability to innovate
and deliver a bespoke product to meet
clients’ ESG goals.
• Hosted our annual Man Alternative
Investing Symposium and 41 other client
webinars attended by over 1,200 clients.
• Invested over $100 million into our
investment management and technology
capabilities which will further support our
ability to serve our clients globally.
• Seamlessly transitioned to an agile working
model as a result of our single operating
platform, which underpins our business
processes in a flexible and scalable way.
• Successfully completed the refurbishment
of our London office, Riverbank House,
aspace designed to support our new
agileworking model.
• Increased the number of high-performance
computing users by 16% to over 400
employees.
• Trained 115 employees in Python and
datascience skills through four internally
developed courses in order to technically
upskill our people across the business.
• Continued to actively foster a diverse
andinclusive culture across the business
through the Drive programme.
• Completed two $100 million share
buyback programmes announced
inSeptember 2020 and July 2021.
• Announced a further $250 million share
buyback programme in December 2021,
to be implemented in tranches.
• Full year 2021 dividend of 14.0¢, 32%
higher than full year 2020, under our
progressive dividend policy.
• Strong, liquid balance sheet with
$907million of net financial assets
1
.
• Identified and reviewed over 100
potential acquisition opportunities
duringthe year.
Objectives for 2022
• Generate value through expansion of
ouralternative and solutions offerings.
• Continue to develop ESG strategies
thatmeet client demand and add value
totheir portfolios.
• Attract and develop talent in sales,
providing relevant training and
development across all levels.
• Broaden and deepen existing client
relationships and continue to develop
relationships with key target clients
andinstitutions.
• Continue investment in technology
andtalent across both our investment
andinfrastructure teams to support
futuregrowth.
• Maintain focus on cost base and
carbonfootprint to ensure that we run
thebusiness effectively.
• Maintain focus on balance
sheetefficiency.
• Assess capital returns alongside
anyorganic deployment or potential
acquisition opportunities.
1 Man Group’s alternative performance measures are
outlined on pages 183 to 187.
2 ESG-oriented funds made up of 16 Article 8 funds
and1Article 9 fund under SFDR.
15
Strategic report | Governance | Financial statements | Shareholder information
16
Strategic report
Man Group plc | Annual Report 2021
Chief Executive Officer’s review
I am delighted by the exceptionally strong set of results
wedelivered for 2021. During the year we made significant
progress on our key strategic objectives, which has laid firm
foundations for the longer-term growth of the business.
Luke Ellis | Chief Executive Officer
Overview¹
2021 was another unprecedented year
shaped by the COVID-19 pandemic. It was
ayear of anticipation as many around the
world looked ahead optimistically at a return
to a degree of normality. Markets rose
relatively steadily, driven by the distribution
ofvaccines, continued fiscal and monetary
stimulus, strong corporate earnings and
increased consumer demand as lockdowns
eased. Most major equity indices ended
theyear at or near record highs, delivering
double-digit returns despite periods of
uncertainty and volatility at various times
owing to issues ranging from surging
inflation, new virus variants, supply chain
disruptions and the emergence of
speculative retail investors.
I am delighted by the exceptionally strong
setof results we delivered for 2021. During
the year we made significant progress on our
key strategic objectives, which has laid firm
foundations for the longer-term growth
ofthebusiness.
Our technology-empowered active
investment processes delivered strong
overall investment performance for our
clients of $12.5billion, and 1.9% in asset
weighted relative investment outperformance
across our strategies. Our clients have
recognised this performance with
$13.7billion of net inflows, including our
strongest quarters ever in Q3 and Q4. More
importantly, we continue to develop better
and deeper relationships with the world’s
largest and most sophisticated asset
owners. In addition, we continued to
addtoour range of investment strategies,
withnew strategies such as Man GPM
RICommunity Housing, and invest in
ourresearch and innovation, whether
thatbeexecution technology, machine
learning, data science or our responsible
investing capabilities.
17
Strategic report | Governance | Financial statements | Shareholder information
Relative
Absolute return
Total return
Multi-manager solutions
Systematic long-only
Discretionary long-only
Group
Absolute
-0.7%
2.8%
-0.7%
5.6%
1.4%
1.9%
8.1%
9.4%
4.6%
14.8%
11.0%
10.4%
Man Group plc | Annual Report 2021
The strong outperformance together with
positive momentum in markets and net
inflows resulted in our AUM increasing to
$148.6 billion, a new high for Man Group.
The growth was broad based, with both
ouralternative and long-only strategies
growing their AUM during the year.
Core profit before tax increased to
$658million, compared to $284 million
in2020, due to growth in management fee
earnings and an exceptionally strong
performance fee outcome. Our results
highlight the benefit of the diversified set of
performance fee earning strategies we offer.
Core management fee profit before tax was
up 48%, reflecting the strong growth of AUM
during the year. Statutory profit before tax
was $590 million, compared to $179 million
in 2020.
These results are a reflection of our
performance, our growth, the demand
forour products and the value of active
investment management. Our ability to
continue to deliver positive client outcomes
during uncertain economic periods
reinforces my belief that our range of
strategies, dedicated talent, technological
edge, collaborative culture and the depth
ofour client relationships, mean we are
wellpositioned for the future.
Performance¹
Absolute investment performance across
ourproduct categories was up 10.4%.
Ouralternative strategies were up 8.1%,
driven by positive performance from AHL
Evolution (+17.0%) and Alternative Risk
Premia (+12.8%). On average, our long-only
strategies were up 13.4%, having benefited
from rallying equity markets and the rotation
into value. Performance in Numeric Europe
(+29.4%) and GLG Japan CoreAlpha
(+28.2%) was particularly strong as
aresultofthis.
Asset weighted relative outperformance
of0.5% in alternatives was driven by our
quantitative strategies, with AHL TargetRisk
continuing its relative outperformance since
launch. Relative outperformance of 3.8%
across our long-only strategies was
exceptionally strong, largely due to their
valuation focus. Our systematic long-only
strategies at Man Numeric, as well as GLG
Japan CoreAlpha, outperformed in the year.
Progress against strategic priorities
Strong client relationships
2021 saw excellent engagement with
existing and new clients across the globe,
reflected by record net inflows for the year
of$13.7 billion. This is notably strong relative
to the industry, which saw average inflows
of1.3% across comparable strategies in
2021. It is one of the best signs of the
strength of our business today.
We continued to make good progress in
building long-term relationships with clients
and during the year we added a significant
number of new relationships with strategically
important asset allocators and distributors.
One of the most notable wins was a large
mandate into our Numeric Global Sustainable
Climate strategy. This marks a very exciting
milestone for us and is a strong endorsement
of our ability to innovate and deliver a bespoke
product that incorporates proprietary climate
research to meet our clients’ ESG goals.
The trend of clients investing across the firm
continues, with a number of existing clients
investing in new products in 2021. At the end
of December, 78% of our AUM is from clients
investing in two products or more and 48%
from clients investing in four products or
more. Our 50 largest clients are invested
inanaverage offour of our strategies. This
illustrates the strength and breadth of our
offering, and the value of providing clients with
a single point of contact who understands
them and their unique requirements.
Absolute investment performance
$12.5bn
2020: $3.3bn
Relative investment performance
+1.9%
2020: -1.0%
Statutory profit before tax
$590m
+230%
2020: $179m
Core profit before tax
$658m
+132%
2020: $284m
Absolute and relative investment performance in 2021
1 Past performance is not indicative of future results.
Returnsmay increase or decrease as a result of currency
fluctuations. Performance figures are shown net of
representative management and performance fees.
2 Man Group’s alternative performance measures are outlined
on pages 183 to 187.
18
Strategic report
Man Group plc | Annual Report 2021
Chief Executive Officer’s review continued
In September, we hosted the Man Alternative
Investing Symposium in partnership with
theOxford Man Institute, a world-leading
academic research institute at the University
of Oxford that Man Group has worked
incollaboration with since 2007. The
Symposium included clients from the UK,
Europe and the US, as well as a number of
internal and guest speakers. The sessions
covered a range of topics from modern
monetary theory to climate change models
under the overarching theme of ‘forecasting’.
The feedback we received from clients was
overwhelmingly positive, and it was fantastic
for us to host clients in person again.
Innovative investment strategies
Innovation strengthens our business by
further diversifying our revenue streams,
providing interesting development
opportunities for our people and, most
importantly, maintaining our performance
edge and relevance with clients. We
recognise that we need to keep innovating
tomeet their unique requirements, and we
invest a huge amount of time and energy
inresearch.
During 2021, we continued to see growth
from strategies we have seeded and
developed organically in the past. Once
again, AHL TargetRisk saw material client
demand during the year and was a
significant contributor to the firm as a
whole.We launched additional products
within the AHL TargetRisk range, including
TargetGrowth and TargetRisk Core, and
nowhave a total of $18.7 billion of AUM
inthe strategy range.
We were also pleased to announce the
firstclose of our Man GPM RI Community
Housing Fund earlier in the year, which is
focused on addressing the shortage of
new,high-quality housing in the UK that
isaffordable to those earning the median
income and below. The first residents moved
in before Christmas and included young
families and key workers whom we all relied
upon during the pandemic.
We see an opportunity for further growth in
credit and fixed income, whether systematic
or discretionary, and strategies focused
onAsia. Our fixed income quantitative
investment strategies are using the growing
amount of data available on the fixed income
and credit markets to develop new strategies
operating in those markets. We launched a
new systematic fixed income strategy during
the year and continue to see inflows into
ourdiscretionary and quantitative high yield
strategies. We have also seen good traction
with strategies focused on Asia ex-Japan
and both onshore and offshore inChina.
We see our pipeline of new ideas and
products as very strong and have seeded
16new strategies this year, increasing our
seeding book to $648 million at the end
of2021.
Using the Global Sustainable Investment
Alliance’s definitions and classification,
$55.2billion of Man Group’s assets under
management across all our investment
engines integrate ESG factors into their
decision-making process. As ESG becomes
better understood as something that can be
quantitative as well as qualitative, we believe
our 570+ quants and technologists and
35years of experience in understanding
data and quant investing puts us in a unique
position to provide meaningful RI solutions
for our clients across the range of strategies
we offer.
We continue to build our firmwide centre
ofexecution excellence in trading, trading
technology and trading research. Efficient
execution is key to our business’s success
and the delivery of performance for clients.
Itenables them to capture more of the alpha
that our portfolio managers generate. It is also
a fast-evolving area that is ripe for innovation,
for example, via the expanded use of machine
learning or the development of systematic
ways to trade single name credit.
Efficient and effective operations
Our technology and central infrastructure are
the foundations on which the firm operates.
This enables us to evolve and adapt as
markets and clients’ needs do. With the
firm’s knowledge, experience and talent, our
single platform facilitates alpha generation,
portfolio management, trade execution,
operations, compliance, risk management
and financial reporting.
During the year, we invested over $100million
in our technology capabilities, which will
further support our ability to serve our
clientsglobally. Continuous investment in
ourpeople, data and platform technology
inorder to enhance our capabilities is what
maintains and increases our technological
lead and our competitive edge. In January
2021, we also announced the HUB joint
venture, in partnership with PIMCO,
IHSMarkit, State Street, Microsoft and
McKinsey. HUB aims to, for the first time,
make our intellectual property in technology
available to third parties via the cloud.
This year we completed an extensive
refurbishment of our offices and moved
allour London teams to the same building
inthe City of London, a space designed
tosupport our new agile working model.
Wealready see the significant advantages
this generates for employees, the firm
andour clients.
We also continue to review a large number
ofacquisition opportunities, and while
wehaven’t seen any that meet our criteria
in2021, we think this capability will prove
valuable to shareholders in the longer term,
as it has in the past.
Climate change
The need for rapid action on climate change
is beyond debate, and the world of climate
science is moving at a commensurate pace.
2021 has marked an important milestone in
our commitment to combat climate change
as we signed up to the Net Zero Asset
Managers initiative and committed to climate
neutrality in line with the Paris Agreement.
We are also pleased to report that Man
Group has been listed in the top 300 of
theFT’s Climate Leaders list for Europe
forreducing our core greenhouse gas
emission intensity.
While climate change is undoubtedly
athreatto society, it also presents an
opportunity forour firm. We are building
andlaunching climate-oriented strategies
across the business and established climate
research capabilities in-house. Developing
and researching innovative investment
solutions compatible with supporting a
transition toalow-carbon economy is a key
area of strategic focus for us, both to stay
relevant toour clients and achieve more
sustainable growth over time.
People and culture
Our focus on attracting, supporting and
retaining the best talent has remained a
toppriority throughout this unusual year.
Weare fundamentally a people business,
and attracting the brightest at all levels is vital
to our ability to deliver better outcomes for all
our stakeholders. We place great importance
on being an employer of choice and an
organisation where all our employees can
bring their authentic selves to work to learn,
develop and achieve excellence. We are
pleased to report that our 2021 staff survey
recorded an engagement score of 81%
witha response rate of 78%.
At Man Group, we believe in diversity.
Itistheright thing to do because it makes
usa better place to work, and a stronger
business. Our culture is based on mutual
respect for others, and we believe that
bycelebrating diversity at all levels, we
encourage original and collaborative thinking
with multiple and differing perspectives.
19
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
Our initiatives to support diversity and
inclusion are led by Drive, Man Group’s
close-knit and collaborative group of
networks run by our employees and
sponsored by members of the Senior
Executive Committee. It seeks to inform,
support and inspire our people, and we
haverun a number of successful events
during the year to mark Global Inclusion
Week, Mental Health Awareness Week
andEarth Day, to name a few.
In recent years, we have been pleased to
seea positive trajectory in relation to gender
diversity. We have seen the proportion of
women in senior management roles rising
from 20% in 2017 to 27% in 2021.
I am also pleased to reconfirm Man Group’s
support for the Ten Principles of the United
Nations Global Compact on human rights,
labour, environment and anti-corruption.
Asan active signatory, we are committed
tomaking the UN Global Compact and its
principles part of the strategy, culture and
day-to-day operations of our firm, and to
engaging in collaborative projects which
advance the broader development goals
ofthe United Nations, particularly the
Sustainable Development Goals.
I am proud of what we’ve achieved so
far,but I know that fostering a truly diverse
andinclusive business takes time. It is
ateam effort that requires commitment
andcollaboration, and there is still work
tobedone. However, I’m convinced that
thisfirm and our industry will be better in
thelong term because of the steps we are
taking today.
Growth
2021 was another strong year of growth
forMan Group. Our intensely client-centric
approach has proved key to improving flows,
and our technology leadership has extended
our competitive advantage and delivered
strong returns for clients and shareholders.
Since the beginning of 2017, we have seen
$37.8 billion of net inflows from clients and
the number of clients for whom we manage
more than $1 billion has grown from 10 to26.
We have increased our core management
fee profitability
¹ by 102% to$266 million and
have grown our core management fee EPS
¹
by 134%, while returning on average 10%
ofour market capin dividends and share
buybacks every year during that period.
Outlook
2021 was an excellent period of growth
anddemonstrates the potential of the firm
we have built over the past few years.
Weareconfident in our growth trajectory,
entering the year with good momentum and
remain focused on investing in our talent
andtechnology, which are the foundations
ofthe firm and cement our sustainable
competitive advantage.
Luke Ellis
Chief Executive Officer
Women in senior management
27%
at 31 December 2021
AHL TargetRisk AUM
$18.7bn
at 31 December 2021
Net inflows
$37.8bn
over five years (2017 to 2021)
Quants and technologists
570+
at 31 December 2021
We remain confident in our growth trajectory, with
thecombination of our talented team and our lead
intechnology driving our strong competitive position.
Luke Ellis | Chief Executive Officer
1 Man Group’s alternative performance measures are outlined
on pages 183 to 187.
Strategic report
Man Group plc | Annual Report 2021
Talent +
Excellence
20
Man Group plc | Annual Report 2021
Overview
A deep and diverse pool of talent is vital to our
continued success. Our priority is to hire and
develop world-class talent across the firm,
from quants and technologists to portfolio
managers and analysts, and to foster a
diverse workforce to support innovation and
collaboration. We are committed to
developing an inclusive culture, where people
at every level of the firm can develop their
skills, make an impact, and build their careers.
For more information on diversity, equity and
inclusion, please visit:
https://www.man.com/diversity
Strategy spotlight
GLG High Yield
• Launched: 2019
• Unconstrained global high yield bond strategy
• Focus on bottom-up credit analysis
• AUM at December 2021: $2.8 billion,
with$1.9billion of net inflows in the year
27%
of our senior managers are women
226
internal transfers during 2021
+1.9%
relative investment performance
in2021
1 For definition see glossary.
21
Strategic report | Governance | Financial statements | Shareholder information
Strategic report
Man Group plc | Annual Report 2021
Key performance indicators
Measuring our success
Our financial KPIs illustrate and measure the
relationship between the investment experience
of our clients, our financial performance and the
creation of shareholder value over time.
Link to strategy
1
Innovative investment strategies
2
Strong client relationships
3
Efficient and effective operations
4
Returns to shareholders
Link to governance
R
Executive Director Remuneration
Relative investment performance
1
4
R
021
020
019
1.9%
-1.0%
-1.1%
What we measure
The asset weighted performance of Man Group’s strategies compared to peers
gives an indication of the competitiveness of our investment performance against
similar strategies offered by other investment managers.
How we performed
We had asset weighted relative investment outperformance of 1.9% in 2021,
acrossboth alternative and systematic long-only strategies, an improvement on
2019 and 2020. Forfurther discussion on investment performance see page 17.
Relative net flows
1
2
4
R
021
020
019
9.8%
4.6%
-0.4%
What we measure
Relative net flows are a measure of our ability to attract and retain investor
capitalincomparison to our industry peers. AUM drives our financial performance
in terms of our ability to earn management and performance fees.
How we performed
At 9.8%, relative net flows in 2021 have been particularly strong, indicating
thestrength of our diversified product offering and depth of our global client
relationships.
Core EPS
1
2
3
4
R
021
020
019
38.7¢
16.2¢
21.0¢
What we measure
Core EPS
1
is a measure of core profitability and capital management. From 2021
we changed to this KPI from core profit before tax
1
in order to provide better
comparability across our peers and to align management incentives and
shareholder interests further.
How we performed
Core EPS of 38.7¢ for 2021 is an increase of 139% compared to 2020, reflecting
exceptionally strong performance fee generation in the year and the operating
leverage inherent in our business.
Core management fee EPS growth
1
2
3
4
021
020
019
52%
6%
-12%
What we measure
Core management fee EPS¹ growth in the year measures the overall effectiveness
of our business model and reflects the value generation for shareholders from our
more stable earnings stream. In 2021 we changed this KPI from adjusted to core
management fee EPS growth, as these two measures became aligned in 2020.
How we performed
Core management fee EPS increased by 52% to 15.7¢. Investment performance
and net inflows drove increased management fee profitability in the year,
supplemented by $180 million of capital returned through our share buyback
programmes which reduce total share count.
22
Man Group plc | Annual Report 2021
Our non-financial KPIs further demonstrate
our commitment to our people, wider
society and the environment, which reflect
our core values.
Carbon footprint (tCO
2
e)
2
021
2
020
2
019
1,494
1,606
5,284
What we measure
In order to monitor and decrease our direct carbon footprint, we measure total
greenhouse gas emissions (tCO
2
e), using the market-based approach
2
.
How we performed
In 2021, total carbon emissions decreased by 7% compared to 2020, despite
ouroffices reopening as lockdowns eased. We continued to reduce emissions
byimproving the energy efficiency of our offices. Further information on how
weseek to minimise any negative impact on the environment can be found
onpages 49 to53.
Employee engagement
021
020
019
81%
83%
77%
What we measure
Each year we conduct a staff survey to help us monitor and understand employee
engagement and identify any areas for action.
How we performed
Our 2021 staff survey recorded an engagement score of 81%, with a slight
decrease in the response rate in 2021 to 78% from 85% in 2020. The well-being
ofour employees remained a top priority as we transitioned from remote working
toour new agile working model. More information on how we supported staff
throughout the year can be found on page 38.
Women in senior management roles
R
2
021
2
020
2
019
27%
26%
20%
What we measure
As we seek to encourage greater diversity across the investment management
industry, we measure the number of women in senior management positions.
Thisis defined as those who are or report directly to members of our Executive
Committee.
How we performed
We made some progress in the number of women in senior management roles
during the year, increasing the percentage to 27% in 2021. However, we recognise
there remains a long way to go. Further information on our initiatives to develop
adiversified pool of talent at Man Group can be found on pages 41 and 42.
ESG-integrated AUM ($bn)
R
021
020
019
55.2
42.7
–
What we measure
The amount of our AUM invested responsibly is crucial to our business and
ourclients. We calculate ESG-integrated AUM in line with the Global Sustainable
Investment Alliance definitions, which have emerged as the global standard
ofclassification.
This is a new non-financial KPI from 2021. Further details on how we calculate
thismetric can be found on page 55.
How we performed
We first reported this metric in 2020. Since then, we have made significant
progress and now manage $55.2 billion of ESG-integrated AUM for our clients. 
1 Details of the calculation of our alternative performance measures are provided
onpages183to187.
2 Indirect emissions from non-renewable electricity sources (Scope 2) and upstream leased
assets (Scope 3). We have refined our methodology in 2021 and have restated 2020
numbersto reflect this change. 2019 carbon footprint measures have not been updated.
23
Strategic report | Governance | Financial statements | Shareholder information
24
Strategic report
Man Group plc | Annual Report 2021
Chief Financial Officer’s review
Man Group delivered excellent results in 2021, with the
continued strong growth in both core net management fee
revenue andcore performance fees leading to core profit
exceeding the previous ten-year peak achieved in 2019.
Asa result, statutory profit increased to $487 million from
$138million in 2020.
Antoine Forterre | Chief Financial Officer
Core management fee EPS
1
15.7¢
+52%
2020: 10.3¢
Core EPS
38.7¢
+139%
2020: 16.2¢
Statutory EPS (diluted)
33.8¢
+263%
2020: 9.3¢
Capital returns to shareholders in 2021
$0.5bn
Overview
Man Group delivered excellent results in
2021, with the continued strong growth in
both core net management fee revenue¹
andcore performance fees¹ leading to core
profit¹ exceeding the previous ten-year peak
achieved in 2021. As a result, statutory profit
increased to $487 million, from $138 million
in2020. Record net inflows and strong
investment performance increased our
AUMto a new high of $148.6 billion, leading
to a 57% increase in core net revenue¹ to
$1,486 million. Coupled with a cost discipline
that combines prudence with investment in
selected growth areas, this resulted in core
EPS¹ growing by 139% to reach new record
levels of 38.7¢ in 2021, thanks to particularly
strong performance fee earnings. Core
management fee EPS¹ increased from
10.3¢to 15.7¢ and core performance fee
EPS¹ increased from 5.9¢ to 23.0¢. Statutory
EPS increased from 9.3¢ to 33.8¢. We
continue to deliver strong cash conversion
ofour profits and, driven by the growth
inearnings, have increased our returns to
shareholders significantly in 2021. Our total
proposed dividend for 2021 of 14.0¢ per
share represents an increase of 32% from
10.6¢in2020, reflecting the growth in the
business and the implementation of our new
25
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
Core and statutory profits
$m
Year ended
31 December
2021
Year ended
31 December
2020
Core net management fee revenue 877 730
Core performance fees 569 179
Core gains on investments 27 20
Core sub-lease rental and lease surrender income 13 18
Core net revenue
1
1,486 947
Asset servicing costs (58) (55)
Fixed compensation (208) (194)
Variable compensation (388) (257)
Core other costs (161) (145)
Core costs (815) (651)
Core net finance expense (13) (12)
Core profit before tax
1
658 284
Core management fee profit before tax
1
266 180
Core performance fee profit before tax
1
392 104
Core profit
1
557 240
Non-core items (68) (105)
Statutory profit 487 138
Statutory EPS (diluted) 33.8¢ 9.3¢
Core EPS 38.7¢ 16.2¢
Core management fee EPS 15.7¢ 10.3¢
Dividend per share
4
14.0¢ 10.6¢
increases in core costs¹ primarily relate to
higher fixed compensation and recruitment
costs, reflecting a step up in hiring due to
recent and expected future growth. The less
favourable sterling to US dollar rates in 2021
also contributed to an increase in core costs¹
of around $14 million compared to 2020.
Wecontinued to benefit from savings
relatedtotravel and entertainment as a
resultoftheongoing pandemic, although
weexpect these will ultimately return to
morenormalised levels. Whilst climate
change hasnot adversely impacted our
financial performance and position to
date,our financial planning and reporting
process nowincorporates the potential
future impacts of climate change on our
business. It is compiled with an emphasis on
sustainability, looking to minimise the carbon
emissions of our office premises in the near
term, reduce inter-office travel, and plan for
the future. This is an area of focus of the
Audit and Risk Committee (see page 90). As
part of our ongoing commitment to reduce
our carbon footprint we are introducing
carbon emissions targets into our directors’
long-term incentive plans from 2022, as
setout in the Directors’ Remuneration report
on page 122. We have set targets to reduce
our Scope 1, 2 and 3 carbon emissions
aspart of our commitment to reach net zero
by 2030 and have also recently purchased
carbon offsets which support a net zero
emissions position through to this point.
Following the lease surrender by the principal
sub-tenant of our London office in 2020 and
the coinciding commercial property market
uncertainty due to COVID-19, we recognised
in 2020 a $25 million impairment of the
associated right-of-use lease asset to reflect
an expected period of future vacancy (a
non-core¹ item). Following our exit from the
remaining portion of the space available for
sub-let during 2021 we recognised a further
associated $3 million impairment. In late
2021, we began marketing the remaining
vacant space in our London office for sub-let
and, until such time as the sub-let space
isfully occupied, we will incur increased
occupancy costs as well as earn less
sub-lease rental income. Finally, we
completed a full future-of-work focused
refitof our London office in 2021, and
initiated one for our New York office.
1 Man Group’s alternative performance measures, including
reconciliations between statutory measures and their core
equivalents, are outlined on pages 183 to 187.
2 Comprises the 2021 interim and final dividends plus the
share buybacks announced during 2021.
3 Comprises the total dividends relating to the last five
financial years and share buybacks announced in
thoseyears.
4 Dividend per share includes the interim and final dividend
relating to each financial year, which for 2021 includes
theproposed final dividend.
progressive dividend policy. After completing
the $100 million share buyback announced
in September 2020, we announced a further
$350 million in share buybacks over 2021,
ofwhich $116 million had been completed
at31 December 2021. Together with an
estimated $194 million of dividend payments
in relation to 2021, this brings thetotal
announced returns to shareholders for 2021
alone to over $0.5 billion², and $1.7 billion³
over the last five years.
Our assets under management increased by
$25.0 billion to a new record of $148.6 billion
at the end of 2021, due to positive investment
performance of $12.5 billion across both
alternative and long-only strategies and net
inflows of $13.7 billion, partially offset by
adverse FX and other movements of
$1.2billion. Our five AUM product categories
all recorded positive net flows for the year,
with 11.1% net flows overall compared with
1.3% for our peers. At 66 basis points, the
average netmanagement fee margin for the
year remained largely in line with 2020. The
run rate net management fee margin as of
31 December 2021 stood at 63 basis points,
predominantly due to the large long-only
systematic mandate in Q4 which attracts a
lower margin due to both its investment style
and the low tracking error of the mandate.
Asa result, run rate core net management
fee revenue, which applies the run rate net
management fee margin to closing AUM
atthe end of the year, has increased to
$939million at the end of 2021, up by
15%from $815 million at the end of 2020.
Management and other fees increased
by20% to $914 million for the year due to
higher average AUM, which also drove the
20% increase in core net management fee
revenue¹ to $877 million. Core performance
fee¹ generation was strong, with $569 million
earned in the year, a significant increase
from$179 million in 2020 and our best in
over ten years. Our asset weighted relative
investment outperformance was 1.9% above
our peers, largely due to particularly strong
performance from ouralternative and
systematic long-only strategies. Although the
majority of performance fees were earned
from systematic macro strategies, all our
investment engines contributed positively.
We also made core gains on investments¹
of$27 million which predominantly relate
toour seed book, a slight increase on the
$20 million gain in 2020, reflecting continued
effective risk management and strong
performance from various strategies.
Core costs¹, which exclude the gross-up of
costs relating to consolidated fund entities,
were $815 million, up from $651 million in
2020, largely driven by higher performance
fee related variable compensation. Other
26
Strategic report
Man Group plc | Annual Report 2021
Chief Financial Officer’s review continued
In June, we acquired a 23% stake in Hub Platform Technology
Partners Limited (HUB), a start-up company whose objective is to
deliver a cloud-based operating platform aimed at transforming the
operations technology for asset managers. HUB will beloss-making
in the early years due to investment in developing the platform,
withour share of these losses of $2 million recognised as a non-
core¹item in 2021.
Statutory profit increased by $349 million in 2021 to $487 million.
When analysing statutory profit we consider it most meaningful to split
this into core profit¹ and non-core
1
items. Core profit
1
of $557 million
easily surpassed the ten-year peak achieved in 2019 of $325 million,
largely driven by the strong performance fee generation. Non-core
1
items (excluding tax) decreased from $105 million in 2020 to
$68million in 2021, reflecting the impact of the 2020 $55 million
GPMgoodwill impairment charge which was partially offset by
arelated $22 million decrease in the fair value of the contingent
consideration creditor.
Our balance sheet remains strong and liquid and allows us
successfully to navigate stressed periods whilst continuing to invest
in the business and support our long-term growth prospects. This is
evidenced by our continued return of capital to shareholders through
dividends and share repurchases throughout the course of the
pandemic, as well as increased seed capital allocations and capital
expenditure to ensure we remain leaders in technology and provide
the most attractive office environment for our employees.
We have net tangible assets of $928 million or 63¢ per share at
31 December 2021, and net financial assets¹ of $907 million. We
have cash of $323 million (2020: $289 million), excluding amounts
held by consolidated fund entities, and continue to be strongly cash
generative, with core cash flows from operations excluding working
capital movements¹ of $700 million (2020: $341 million).
Assets under management (AUM)
Change
$bn
31 December
2020
Net inflows/
(outflows)
Investment
performance
FX
and other
31 December
2021 $bn %
Alternative Absolute return 34.0 4.8 2.5 (0.1) 41.2 7.2 21%
Total return 29.0 4.4 2.3 (0.3) 35.4 6.4 22%
Multi-manager solutions 14.2 0.2 0.6 0.0 15.0 0.8 6%
Total 77.2 9.4 5.4 (0.4) 91.6 14.4 19%
Long-only Systematic 27. 8 3.3 5.3 (0.3) 36.1 8.3 30%
Discretionary 18.6 1.0 1.8 (0.5) 20.9 2.3 12%
Total 46.4 4.3 7.1 (0.8) 57.0 10.6 23%
Total 123.6 13.7 12.5 (1.2) 148.6 25.0 20%
Core net management fee revenue
1
$m
Year ended
31 December
2021
Year ended
31 December
2020
Absolute return 451 355
Total return 198 171
Multi-manager solutions 30 32
Systematic long-only 82 73
Discretionary long-only 116 99
Core net management fee revenue 877 730
Absolute return
The increase in absolute return AUM was driven by net inflows
of$4.8 billion, primarily into Man Institutional Solutions, GLG
EventDriven and AHL Alpha, partially offset by outflows from
GLGEuropean Long-Short. Performance of $2.5 billion was
drivenbyanumber of strategies in the product category.
Total return
Net inflows of $4.4 billion, primarily into AHL TargetRisk and
ManGlobal Private Markets, partially offset by outflows from
Alternative Risk Premia, drove the increase in total return AUM.
Performance of$2.3 billion was driven by gains in AHL TargetRisk
and Alternative Risk Premia.
Multi-manager solutions
The increase in multi-manager solutions AUM was primarily driven
byperformance of $0.6 billion across a number of strategies.
Systematic long-only
Net inflows of $3.3 billion were primarily into Numeric Global
strategies. Performance of $5.3 billion was driven by a number
ofstrategies in the product category.
Discretionary long-only
Net inflows of $1.0 billion and positive investment performance
$1.8billion were partially offset by negative FX and other movements
of $0.5 billion. Net inflows were primarily into GLG High Yield and
GLG Asia ex Japan, partially offset by outflows from GLG Continental
Europe. Performance was driven by gains in GLG Japan CoreAlpha
and GLG UK Undervalued Assets.
27
Strategic report | Governance | Financial statements | Shareholder information
180
120 (20)
(14)
266
2020 Increased
revenues
incl. FX and
variable
compensation
charges
Increases
in other
costs
FX impact
on fixed
costs
2021
Man Group plc | Annual Report 2021
Revenue
Core net revenue¹ increased by $539 million from $947 million
in2020 to $1,486 million in 2021 as a result of net inflows and
stronginvestment performance, which grew our AUM to a new
peakand generated significant performance fees. Statutory net
revenue increased from $953 million to $1,486 million.
Net management fee revenue and margins
Run rate net management fee revenue was $939 million at
31 December 2021 (2020: $815 million), largely as a result of the
increase in absolute return AUM during the year. Although our total net
management fee margin increased slightly by one basis point during
the year to 66 basis points, the run rate net management fee margin at
31 December 2021 stood at 63 basis points as a result ofthe large
systematic long-only mandate which funded in December 2021.
The absolute return net management fee margin increased by one
basis point to 119 basis points as a result of higher closing AUM in
Man Institutional Solutions and AHL Evolution in particular, which
attract higher margins. The total return net management fee margin
is broadly in line with 2020. The multi-manager net management fee
margin decreased to 22 basis points in 2021, from 24 basis points
in2020, as a result of Man FRM’s continued shift towards solutions
from traditional fund of funds. The net management fee margin of
long-only strategies continued its gradual decline due to margin
pressure and mix effects in recent years, with systematic long-only
margins decreasing from 30 basis points to 27 basis points and
discretionary long-only margins decreasing from 62 basis points
in2020 to 58 basis points in 2021.
Core net management fee revenue¹, which excludes amounts relating
toconsolidated fund entities which are reclassified to core gains on
investments¹ to better reflect these with other seed book activity,
increased by 20% to $877 million in 2021, driven by higher average AUM.
Performance fees
Core performance fees¹ for the year were $569 million (2020:
$179million), which included $533 million from alternative strategies
(2020: $175 million) and $36 million from long-only strategies (2020:
$4million). We have strong performance fee optionality and diversity,
with $60.2 billion of performance-fee-eligible AUM at year end, the
majority being at high-water mark, and a broad range of strategies
having contributed to our performance fee earnings over recent years.
Investment gains and losses
Core gains on investments
1
of $27 million (2020: $20 million) primarily
relate to gains on seed investments. The seed book (see Note 14
tothe Group financial statements) was $648 million at year-end, up
from $485 million in 2020 as we deploy our capital to support new
strategies, grow the business, and increase returns to shareholders.
We had $108 million of additional seed investment exposure via total
return swaps at year-end (2020: $50 million).
Sub-lease rental and lease surrender income
In 2020, the principal sub-tenant of our main London office paid
us$26 million in order to terminate their lease early, which was offset
by an associated non-cash deferred rent write-off of $8 million and
resulted in a net accounting gain on lease surrender of $18 million.
The surrender gain represented payment for sub-lease rental risk
and other costs taken on by Man Group as a result of this agreement
and accordingly the amount relating to future lost sub-lease rental
income and additional costs ($7 million) was deferred through
non-core¹ items and subsequently fully utilised in 2021. We
recognised a $25 million impairment of the related right-of-use lease
asset in 2020 and, following our exit from occupying the remaining
portion of the space available for sub-let during 2021, we recognised
a further associated $3 million impairment.
Costs
Asset servicing
Asset servicing costs vary depending on transaction volumes, the
number and mix of funds, and fund NAVs. Asset servicing costs were
$58 million (2020: $55 million), which equates to around 6 (2020: 7)
basis points of average AUM excluding systematic long-only and
Man GPM strategies.
Compensation costs
Total compensation costs were $596 million for the year, up by 32%
from $451 million in 2020 primarily as a result of higher management
and performance fee revenues increasing the associated variable
compensation, as well as the less favourable sterling to US dollar
exchange rates in 2021. Our compensation ratio is generally between
40% and 50% of core net revenue¹, depending on the mix and level
of revenue. We expect to be at the higher end of the range in years
when absolute investment performance fees are low or driven
predominantly by discretionary strategies, and conversely we
expectto be at the lower end of the range when absolute investment
performance fees are high or driven by systematic strategies. The
overall compensation ratio therefore decreased to 40% in 2021 from
48% in 2020, which reflects the overall increase in performance fee
revenue generated in 2021 andillustrates the inherent operating
leverage in our business.
Other costs
Core other costs¹, which exclude the gross-up of costs relating
toconsolidated fund entities, were $161 million for the year (2020:
$145 million). Our recruitment and temporary staff costs increased
due to hiring, as attrition levels normalised during the year compared
to 2020 and as we increase headcount to support business growth
which we expect to continue in 2022. The less favourable sterling
toUS dollar exchange rates also increased other costs compared
with 2020.
1 Man Group’s alternative performance measures are outlined on pages 183 to 187.
28
Core earnings per share (¢)
9.4
11.0
9.7
10.3
1.7
9.5
11. 3
5.9
15.7
23.0
2017 2018 2019 2020 2021
Core management fee EPS
Core performance fee EPS
Strategic report
Man Group plc | Annual Report 2021
Chief Financial Officer’s review continued
Tax
The majority of our profits are earned in the UK, with significant
profits also arising in the US, where our cash tax rate is effectively
nilas a result of available tax assets, and in Switzerland, which
hasalower rate than the UK.
The core tax rate¹ in 2021 was 15% (2020: 16%), a decrease largely
due to the reduced weighting of profits in the UK where the
applicable statutory tax rate is 19%.
Tax on statutory profit for the year was $103 million (2020:
$41million), which equates to a statutory effective tax rate of 17%
(2020: 23%). The decrease in the tax rate is largely due to non-
recurring items arising in 2020, including the impairment of the
GPMgoodwill which was partially offset by the revaluation of the
associated contingent consideration creditor, as well as the
derecognition of a portion of our US deferred tax assets.
In the US we have accumulated tax losses as well as tax deductible
goodwill and intangibles of $85 million (2020: $95 million), which can
be offset against future US profits and will therefore reduce taxable
profits. We have recognised $74 million of these US deferred tax
assets on the balance sheet at 31 December 2021 (2020: $81 million)
as certain state and city tax losses are expected to expire before
consumption. The US core tax rate¹ will remain at nil until cash
taxesare payable in the US, with movements in the deferred tax
asset classified as a non-core¹ item to reflect this. We currently
expect these to be fully consumed by 2024.
The principal factors influencing our future underlying tax rate are
themix of profits by tax jurisdiction, the consumption of US deferred
tax assets and changes to applicable statutory tax rates, in particular
a rate increase in the UK and the potential introduction of a global
minimum tax rate, both of which are expected to apply from April
2023. The underlying tax rate in 2022 is currently expected to remain
consistent with 2021, dependent on the factors outlined above,
andis expected to increase from 2023.
Core profit
The directors consider that Man Group’s profit is most meaningful
when considered together with an alternative ‘core’ basis which
reflects the revenues and costs that drive our cash flows during the
year. Core metrics, which represent our main alternative performance
measures (APMs) and as such should be read in conjunction with
IFRS or statutory metrics, are detailed on pages 183 to 187.
Core profit¹ was $557 million compared to $240 million in 2020.
Ourcore profitability exceeded the ten-year peak reached in 2019,
driven by our strong performance fee generation and continued
growth in AUM.
The increase in core profit
1
and the $180 million of shares
repurchased during the year drove the increase in core EPS
1
from16.2¢ in 2020 to 38.7¢ in 2021.
Cash earnings
Given the strong cash conversion of our business, we believe our
core profit¹ is a good measure of our cash flow generation, although
the timing of cash conversion is impacted by the cyclical movements
in our working capital position through the year and the size of our
seed book over time. Core cash flows from operations excluding
working capital movements¹ were $700 million during the year.
$m
Year ended
31 December
2021
Year ended
31 December
2020
Opening core cash and cash equivalents 289 220
Core cash flows from operations excluding
working capital movements
¹ 700 341
Working capital movements (excluding
seeding) (45) 9
Working capital movements – seeding (173) 41
Dividends paid (160) (147)
Share repurchases (including costs) (180) (107)
Payment of acquisition-related contingent
consideration – (2)
Investment in associate (HUB) (19) –
Other movements (89) (66)
Core cash and cash equivalents at year end 323 289
Working capital movements in 2021 largely relate to the year-on-year
increase in our seed book.
29
Strategic report | Governance | Financial statements | Shareholder information
Net financial assets1 ($m)
648
(64)
907
323
Cash and
seeding
Repo
obligations
Cash
Net financial
assets
Seeding Repo obligations
Man Group plc | Annual Report 2021
Balance sheet
As at 31 December 2021, our cash balance was $323 million,
excluding amounts held by consolidated fund entities, and the
undrawn committed revolving credit facility, which matures in 2026,
was $500 million.
We have a strong and liquid balance sheet. Fees and other
receivables have increased as a result of the higher level of
performance fees earned in December compared to the prior year.
Payables have similarly increased due to an increase in related
compensation accruals. The increase in investments in funds is
driven by seed investments, as outlined below.
$m
31 December
2021
31 December
2020
Core cash and cash equivalents¹ 323 289
Core fee and other receivables¹ 480 382
Core payables¹ (712) (568)
Core investments in fund products and other
investments¹ 770 607
Pension asset 27 2
Investment in associate (HUB) 18 –
Right-of-use lease assets – investment
property 77 78
Right-of-use lease assets – leasehold property 61 74
Leasehold improvements and equipment 43 30
Lease liability (250) (272)
Net deferred tax asset 91 94
Net tangible assets 928 716
Goodwill and other intangibles 723 781
Shareholders’ equity 1,651 1,497
Net financial assets¹ 907 716
Seed investments
We use our balance sheet to invest in new products and both assist
in the growth of the business and generate returns to shareholders,
aiming to redeem as client AUM grows in the funds. At 31 December
2021 our seed investments were $648 million, which have increased
from $485 million at 31 December 2020 due to targeted deployment
of capital to invest in new strategies and grow the business.
Inaddition, we held $108 million of total return swap exposure
at31 December 2021 (2020: $50 million), allowing us to increase
seed investments without utilising large cash balances.
Capital management and shareholder returns
Our robust balance sheet and liquidity position allows us to weather
crises whilst continuing to invest in the business to support our
long-term growth prospects and maximising shareholder value,
returning capital to shareholders that we consider to be in excess
ofour medium-term requirements. In 2021, we completed both the
end of the $100 million share repurchase announced in September
2020, and the subsequent $100 million repurchase announced
inJuly 2021. In December 2021, we announced our intention to
repurchase a further $250 million of shares ($16 million of the first
tranche of $125 million had been repurchased at 31 December 2021).
In 2020 we moved to a progressive dividend policy, and our 2021
total dividend of 14.0¢ per share represents an increase of 32%
on2020. Our business is highly cash-generative, and these cash
flows support a growing dividend over time. We actively manage
ourcapital to seek to maximise value to shareholders and support
ourstrategy by either investing that capital to improve shareholder
returns in the future or returning it to shareholders through higher
dividends or share buybacks, after taking into account required
capital and potential strategic opportunities, to ensure we maintain
aprudent balance sheet. Over the past five years we have returned
$851 million through dividends and announced $850 million of
sharebuybacks for shareholders.
We have a capital and liquidity framework which allows us to
investinthe growth of our business. Our $500 million revolving credit
facility provides additional liquidity (see Note 11 to the Group financial
statements) and now matures in 2026 due to the exercise of our final
one-year extension option in December 2021. We have maintained
prudent capital and available liquidity throughout the year and
deployed capital to support investment management operations
andthe launch of new investment products. We monitor our capital
requirements through continuous review of our regulatory and
economic capital, including regularly reporting to the Risk and
Finance Committee and the Board.
The Board is proposing a final dividend for 2021 of 8.4¢ per share,
which together with the interim dividend of 5.6¢ per share equates
toa total dividend for 2021 of 14.0¢ per share. The proposed final
dividend equates to around $115 million, which is more than covered
by our available liquidity and capital resources. Key datesrelating to
the proposed final dividend are provided in the Shareholder
information section on page 188.
Antoine Forterre
Chief Financial Officer
1 Man Group’s alternative performance measures are outlined on pages 183 to 187.
2 Excludes amounts relating to consolidated fund entities.
3 Equates to net tangible assets per share of 63¢ (2020: 46¢).
30
Strategic report
Man Group plc | Annual Report 2021
Risk management
A comprehensive approach
Our approach to risk management is unified and fully
embedded into both the management of funds on
behalf of our investors and the management of
ManGroup’s business on behalf of our shareholders.
Man Group’s Board has ultimate
responsibility for risk governance and
management. Accountability for day-to-day
risk management, however, is embedded
throughout the business. Our risk
management framework ensures that the
business operates within acceptable risk
tolerances, as defined by the Board’s risk
appetite, with our governance structure
providing a foundation for continuous
oversight in a changing environment.
Inaddition, independent fund boards
areresponsible for protecting the interests
offundinvestors.
Developments in 2021
Investment underperformance remains the
biggest risk facing Man Group. Although
markets generally trended upwards in 2021,
there were some volatile periods driven by
COVID-19 news (particularly shortly after
Thanksgiving, associated with the Omicron
variant), inflation concerns and Federal
Reserve tapering. Overall performance in
2021 has been good– many of our trend-
following quantitative strategies performed
well on anabsolute basis and relative to
peers, andvaluation-focused strategies
suchas Japan CoreAlpha and within
Numeric andAlternative Risk Premia saw
arebound from underperformance in prior
years. Statutory performance fees were up
220% compared to2020 and up 74%
compared to 2019. Assets under
management rose by $25.0 billion in 2021,
as described on page 25, driven by absolute
investment performance and net inflows.
Our product offering is supported by our
balance sheet, which we utilised to continue
the firm’s seeding programme. 2021 saw
theseeding of a number of funds spanning
Man Group’s investment strategies. Whilst
the firm is exposed to adecline in the
valueof seed investments, supporting
thedevelopment of new products is an
important way to increase and diversify
revenues. Overall the seeding book
performed well in 2021.
Man Group climate change risk
management and strategy
Man Group recognises the urgent challenge
presented by climate change, and our
corporate responsibilities and ability to
effectpositive change through our own
behaviour, responsible investment principles
and fund offerings.
The firm has articulated its climate change
risks using existing risk identification
processes: Risk and Control Self-Assessment
(RCSA) for the short-term risks through to the
emerging risks assessment for medium and
long-term risks. Both processes assess risks
in terms oflikelihood (or timeframe over which
it may manifest) and impact (such as business
continuity, financial, regulatory or reputational).
For the risks identified there areassociated
controls and actions that helpmanage/
mitigate the risks. Climate change risks are
captured in Man Group’s riskgovernance and
reporting framework within the associated risk
category such asinvestment performance or
business continuity. The risk governance
framework isowned by the Board and
implemented bythe senior management of
Man Group, and it is at this level that strategic
decisions are made to avoid, mitigate, reduce
or acceptrisks, including those related to
climatechange.
The key short-term risk (one to five-year
timehorizon) and strategic opportunity for
Man Group relates to meeting and exceeding
client expectations for inclusion of meaningful
climate-related analysis into our investment
strategies. Failure, or taking too long, to
deliver genuinely suitable investment products
could lead to outflows or reduced inflows over
time. A related reputational risk comes from
any suggestion of greenwashing if the ESG
credentials of a fund do not meet client,
regulatory or wider public expectations.
The impact of climate change on the
downside scenarios within our three-year
business planning horizon has been
considered – currently none of Man Group’s
plausible downside scenarios, within this
timeperiod, are driven by adverse impacts
ofclimate change. We will continue to
reassessthis.
In the medium term (five to ten-year time
horizon), the key risks to Man Group are
frommarket disruption or volatility triggered
by weather events and disruption to transport
and working arrangements. These could
leadto increased costs (e.g. procurement,
insurance or taxes) and restrictions on
business practices such as international
travelto meet clients. Some of these are
already being mitigated through investment
incollaboration technology and flexible
working, others can be addressed through
agile working practices and having a more
local presence. Thoughtful new regulatory
requirements will be an important tool in
helping companies to consistently effect
genuinely positive change – we will closely
monitor emerging requirements and have
been, and will seek to be, early adopters
ofnew regulations.
As the world transitions towards a low-carbon
economy (in line with the consensus path
toa1.5°C or 2°C scenario) fund performance
could be impacted by fundamental moves
inunderlying asset prices or liquidity. The firm
has invested in a proprietary ESG analytics
tool to facilitate analysis of the underlying
exposures through an ESG lens.
Longer-term (ten to 30-year time horizon)
physical risks include major business or
market disruption following severe weather
events and long-term impacts on employee
health and well-being. For example, the
corporate headquarters in London could
beimpacted by a failure of flood defences.
Such events, or even a heightened risk,
couldcause the firm’s key business locations
to become less relevant. This is mitigated
through long-range monitoring and our
smallphysical footprint helps to reduce
ourexposure.
We must demonstrate responsible conduct
and leadership to our stakeholders – clients,
shareholders, business partners, employees
and our local communities. Our strategic
initiatives relating to our direct environmental
footprint are discussed on pages 46 to 60,
including a commitment to be a net zero
carbon workplace by 2030 and achieve net
zero carbon investment portfolios by 2050.
Our support of TCFD is outlined on page 61
and our stewardship role in relation to
responsible investment is discussed
onpage57.
31
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
The ongoing impact of COVID-19
The COVID-19 pandemic and its impact
onthe health and safety of our staff and the
behaviour of markets continued to dominate
much of risk management throughout 2021.
We have remained focused on looking after
our people, enabling them to work from
home effectively and return to the offices
when local rules permitted it. Overarching
this was the need to protect our clients’
assets with close attention to market,
liquidity, counterparty, cybercrime and
operational risks. Existing risk controls and
processes have continued to function well
albeit with increased oversight at times.
Despite the heightened risk factors, there
have not been any material operational loss
events or control failures associated with
COVID-19 or working from home.
A dedicated COVID-19 response team,
created in early 2020, continues to lead
ManGroup’s pandemic response in line
withlocal government advice and supports
the health and well-being of staff. With
theOmicron variant becoming dominant
inDecember, greater focus was placed on
contact tracing and ensuring critical teams
and processes could continue to function.
The pandemic has shown that employees
could shift seamlessly to working from
homeutilising existing business continuity
infrastructure and facilitated by video
conferencing and collaboration technologies.
Whilst working from home continued to
dominate much of2021, some offices
opened at reduced occupancy to
accommodate those wanting to come in.
Later in 2021 some offices opened to greater
numbers under an agile working model
which allowed many employees to blend
thebenefits of home and office work.
Viability statement
The directors believe that there continues
tobe robust global demand for asset
management firms, such as Man Group,
toprovide fund management services and
make active investment decisions on behalf
of their clients in order to manage their
capital. Man Group’s value-adding services
form the basis of a sustainable business model.
A failure to deliver superior performance
isthe main risk to Man Group’s ability to
maintain adequate capital and liquidity. This
risk is mitigated through our diversified fund
offering. The directors confirm that they have
a reasonable expectation that Man Group
will continue to operate and meet its
liabilities, as they fall due, for the next three
years. A three-year period is consistent with
Man Group’s business planning horizon.
In July, we completed the $100 million
sharerepurchase programme announced
inSeptember 2020 and immediately began
anew share repurchase programme
whichreturned $100 million of capital to
shareholders by mid-October. In December
we announced and commenced a larger
$250 million share repurchase programme
tobe completed over one year in tranches.
By 31 December 2021, the first tranche
was13% complete.
The UK left the European Union (EU) on
31 January 2020 and the transition period
ended on 1 January 2021 with a trade and
cooperation agreement between the UK and
EU coming into effect. In March 2021 the UK
and EU agreed on an initial framework for
future regulatory cooperation on financial
services and equivalence. Any future
agreements may impact market access and
general economic conditions in the UK and
other European countries. In 2019, Man
Group received regulatory approval to
upgrade the regulatory permissions of its
existing Irish entity and opened a physical
office in Dublin, with locally based staff and
branches in various European countries.
Thisallows Man Group to continue servicing
its existing European clients and to access
new business in the EU under the
delegationmodel. We will continue to
monitor developments closely throughout
2022 and will take steps to ensure that the
impact on our employees, business and
clients is minimised.
Three lines of defence
1st 2nd 3rd
Business and
Operational
Management
Business
Operational Risk
and Resilience
Group
Compliance
Internal Audit External Audit
The overall risk management framework
atManGroup is based on the three lines of
defencemodel and is overseen by the Audit
andRisk Committee (ARCom)asdelegated
bytheBoard.
The framework instils the principles of direct
responsibility for risk management in each
business unit. Embedding accountability
witheachemployee at the business level
isthe‘first lineof defence’.
The business units are monitored by the Group
Risk and Compliance control functions 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 firm’s risk management,
control and governance processes against
bestpractice.
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.
Group Risk
32
Strategic report
Man Group plc | Annual Report 2021
Risk management continued
The directors’ assessment has been made
with reference to Man Group’s current
position, the firm’s strategy, the Board’s risk
appetite and Man Group’s principal and
emerging risks and how these are managed
(described later in this section, on pages 34
to 37). The principal risks are linked to each
of Man Group’s strategic priorities. The
strategy and associated principal risks form
the basis of Man Group’s medium-term plan.
This covers a three-year period and includes
downside scenario testing. Man Group’s
medium-term plan is built by aggregating the
expected business performance across the
firm, and then stressing key business
assumptions (particularly investment
performance, fund flows, expected
performance fees and the associated
performance of the balance sheet seeding
and investment positions, determined using
internal quantitative models).
The directors have considered the impact of
climate change on the downside scenarios.
Currently none of Man Group’s plausible
downside scenarios, within the three-year
business planning horizon, are driven by
adverse impacts as a result of climate change.
Our operational and financial performance
during 2020 and 2021 demonstrates Man
Group’s resilience to the effects of COVID-19
and supports our assessment that it does
not impact our future viability.
The medium-term plan assessment is
augmented throughout the year by regular
briefings at the ARCom on strategy, risk and
controls, as well as dashboards across risk,
compliance, finance and Internal Audit. The
principal and emerging risks are considered
within the Board’s risk appetite framework.
Board oversight of risk
management and internal controls
The Board oversees and monitors Man
Group’s risk management and internal
control systems on an ongoing basis and,
atleast annually, carries out a review of their
effectiveness. A summary of the firm’s risk
management and internal control systems,
including those relating to the financial
reporting process, is given below.
Objectives and governance
framework
Man Group’s risk management framework
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 framework is designed to
manage key risks but cannot eliminate the
risk of failure to achieve business objectives
and can only provide reasonable and
notabsolute assurance against material
misstatement or loss. The risk management
framework and internal control systems,
which have been in place throughout the
year and up to the date of this Annual
Report, comply with the FRC’s Guidance
onRisk Management, Internal Control and
Related Financial and Business Reporting.
Whilst the Board retains overall responsibility
for Man Group’s risk management and
internal control systems, it has delegated
oversight to the ARCom. The report from
theChair of the ARCom on pages 90 to 96
provides further information on how the
ARCom has discharged its risk oversight
responsibilities during 2021.
The governance framework and control
environment within Man Group have been
designed to manage risks in accordance with
risk appetite. The Board and ARCom receive
regular reporting on Man Group’s risk profile
and adherence with risk appetite. Any
breaches to risk appetite would be resolved in
line with the firm’s procedures and processes.
Man Group’s risk appetite
statements
The risk appetite statements are set
bytheBoard and cover all significant
riskcategories. They apply to both the
corporate and investment management
functions of ManGroup. The statements
express the Board’s appetite for risk,
promote a risk-aware culture and set
outobjectives andboundaries for
Man Group’s governance
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.
Board
CEO Audit and Risk Committee (ARCom)
The ARCom is a Committee of the Board which has oversight of
the assurance functions (see pages 90 to 96 for further detail).
Senior Executive Committee
The Senior ExCo is accountable for all risks assumed in the
business and is responsible for the execution of appropriate risk
management discipline.
Risk and Finance Committees
The Risk and Finance Committees (RAFs) oversee the operational, regulatory and reputational risks and the internal control
environment. There are three committees covering Global, UK/EEA and Rest of World Man Group entities. The committees also
monitor balance sheet financial risks and the adequacy of capital and liquidity buffers. The RAFs are chaired by the Chief Financial
Officer and the Group Chief Operating Officer & General Counsel.
33
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Man Group plc | Annual Report 2021
ManGroup’s business. The primary goal
ofrisk management is to support the
achievement of Man Group’s objectives
byencouraging an appropriate balance
between risk and benefit, in a controlled
andregulatory compliant context.
During the year, the Board reviewed
andapproved the output from the annual
refresh of Man Group’s Risk Governance
andAppetite Framework. There were no
material changes to the risk tolerances of the
business, however the qualitative risk appetite
statements were updated to emphasise
ESGconsiderations in decision-making
andrecognising the faster evolving pace of
the cyber threat and Man Group’s response
to it. A summary of the risk appetite
statements is available on our website.
Corporate reorganisation risk
governance implementation
The corporate reorganisation in May 2019
included the creation of UK/EEA and Rest of
World holding companies and boards. Each
board has its own review and authorisation
framework to ensure a consistent approach
to business decisions in accordance with
Man Group’s risk appetite.
The UK/EEA entities are regulated on a
consolidated prudential basis by the FCA.
The2020 Internal Capital Adequacy
Assessment Process (ICAAP) for the UK/EEA
entities was approved by the UK/EEA board
in 2021, with planning under way for the
Internal Capital and Risk Assessment (ICARA)
processes and documentation. In addition,
anICAAP for the Irish entity was prepared
forthe CBI.
Financial reporting controls
Man Group’s financial controls framework
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
ManGroup’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 the
financial statements preparation process.
During theyear, senior management
monitored theresults of the certification
process andasample of the certifications
was independently spot checked each
month to provide assurance that the
certifications were correct.
Ongoing risk reporting
The Board receives regular reports
fromtheChair of the ARCom, business
management and Group Risk on the
riskstothe achievement of Man Group’s
operational and financial objectives, together
with notification of any instances of the level
of risk taken not being in accordance with
the Board’s risk appetite. These reports
include a summary ‘risk commentary’ and
aquantitative assessment of the downside
risks faced byMan Group. The Board
reviewed and discussed Man Group’s
emerging risks andthe firm’s response
tothese.
Specific annual review of risk
management and internal controls
In addition to its ongoing monitoring of
ManGroup’s risk management and internal
controls, the Board has conducted a
specificannual review of their effectiveness
in respect of 2021 and up to the date of this
Annual Report. This review included a robust
assessment of Man Group’s principal and
emerging risks (see details on pages 34
to37) and any 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 Risk
and Control Self-Assessment (RCSA)
process performed by business management
andthe quality of the controls in place to
mitigate these risks. Following this review,
the Board concluded that Man Group’s risk
management processes were effective and
that there were no significant weaknesses
orfailings in the system of internal controls.
Assessment of principal and
emerging risks
Man Group’s comprehensive risk framework
includes business, credit, liquidity, market,
operational and reputational risks to both
thefirm and our funds.
Man Group’s risk profile has not changed
materially in 2021. However, market and
operational risks linked to COVID-19 and
mass working from home have been a focus.
Man Group does not currently have any
integration risk. Business risks continue to
represent the biggest risks to Man Group;
ofthese, investment underperformance is
the single biggest risk.
Given its wide range of investment products
and strategies, Man Group manages a wide
array of operational risks. The breadth and
complexity of the regulations that Man Group
and its funds are subject to across multiple
jurisdictions also represent significant
operational risks should the firm fail to
comply with these regulations. Man Group
supports proportionate and thoughtful
regulation and initiatives that develop the
regulatory environment. However, regulatory
change can also result in increased
operational complexity and costs.
The directors confirm that they have carried
out a robust assessment of the principal and
emerging risks facing Man Group, including
those that would threaten its business
model, future performance, solvency or
liquidity and reputation. Since 2020 this has
included a specific assessment of climate
change risks facing the firm – as a principal
risk in its own right and impacting the other
principal risks.
The directors have described and assessed
these principal and emerging risks on pages
34 to 37 and explained how they are being
managed or mitigated.
34
Strategic report
Man Group plc | Annual Report 2021
Risk management continued
Link to strategy
1
Innovative investment strategies
2
Strong client relationships
3
Efficient and effective operations
4
Returns to shareholders
Business risks
1 32 4
Risk Mitigants Status and trend Change
1.
Investment
performance
Fund underperformance, on an absolute
basis, relative to a benchmark or relative to
peer groups, could reduce AUM and may
result in lower subscriptions and higher
redemptions. This risk is heightened at
times of volatile markets. This may also
result in dissatisfied clients, negative press
and reputational damage.
Investment performance is exposed to
market disruption or volatility triggered by
severe weather events. Performance could
also be impacted by fundamental moves in
underlying asset prices or liquidity as the
world transitions to a low-carbon economy.
Lower AUM results in lower management
fees and underperformance results in lower
performance fees.
Man Group’s investment businesses each
have clearly defined investment processes
designed to target and deliver on the
investment mandate of each product.
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 limits the risk to the business
from underperformance of any particular
strategy or market. This includes a current
focus on responsible investment products
incorporating ESG analytics to meet current
and future investor needs.
Despite periods of market volatility linked to
COVID-19 developments, inflation concerns
and Fed tapering, 2021 has seen good
overall performance for Man Group’s funds.
Trend-following quantitative strategies
performed well and valuation-focused
strategies such as Japan CoreAlpha and
those within Man Numeric and Alternative
Risk Premia recovered from weaker
performance in prior years.
AUM increased largely due to absolute
investment performance and net inflows
over the year in roughly equal parts.
The discussion of Man Group’s investment
performance is on page 17.
2.
Key person
risk
A key person to the business leaves or
isunable to perform their role. This also
includes team resilience to individuals
being incapacitated by COVID-19.
Retention risk may increase in years of poor
performance and reduced compensation.
In 2021 the sector has also seen individuals
looking for fundamental lifestyle changes
triggered by the pandemic.
Business and investment processes are
designed to minimise the impact of losing
any key individuals. Diversification of
strategies and the emphasis on technology
and systematic strategies reduce the overall
risk to Man Group. The COVID-19 response
sought to minimise resilience risks through
physical separation of key persons.
Succession plans and deferred
compensation schemes are in place to
support the retention of senior investment
professionals and key management.
Man Group has continued to be able
toattract and retain an array of talented
individuals across the firm. Voluntary staff
turnover has picked up, returning to
pre-pandemic levels.
We did not see any investor concerns or
material outflows as a result of announced
departures in 2021, including the retirement
of the CIO and subsequent Senior ExCo
reorganisation. We continue to operate
asuccession planning process to manage
this risk.
Credit risks
1 32 4
Risk Mitigants Status and trend Change
3.
Counterparty
A counterparty with which the funds or
Man Group have financial transactions,
directly or indirectly, becomes distressed
or defaults.
Shareholders and investors in Man Group
funds and products are exposed to
creditrisk of prime brokers, custodians,
sub-custodians, clearing houses and
depository banks.
Man Group and its funds diversify exposures
across a number of strong financial
counterparties, each of which is approved
and regularly reviewed for creditworthiness
by the Counterparty Monitoring Committee
(CMC). The CMC also oversees contingency
planning ahead of significant market or
political events.
The risk teams monitor credit metrics on the
approved counterparties daily. This includes
CDS spreads and credit ratings.
Increased regulatory scrutiny, stress testing
and capital requirements for investment
banks and central clearing houses following
the 2008 financial crisis supported the
overall stability of Man Group’s core
counterparties.
The main counterparty event for 2021 was
names linked to the collapse of Archegos.
This led to our decision to migrate risk away
from one of our main prime brokers. Our
diversification model allowed for a smooth
transition to alternative providers without
any issues.
35
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Man Group plc | Annual Report 2021
Liquidity risks
31 4
Risk Mitigants Status and trend Change
4.
Corporate
andfund
Volatile markets and reduced market
liquidity can place additional, often
short-term, demands on the balance sheet.
Man Group is exposed to having insufficient
liquidity resources to meet its obligations.
Adverse market moves and 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.
A $500 million revolving credit facility (RCF)
provides Man Group with a robust liquidity
backstop. Liquidity forecasting for the
ManGroup and UK/EEA entities, including
downside cases, facilitates planning and
informs decision-making.
The investment risk teams conduct
regularliquidity tests on Man Group’s funds.
Weendeavour to manage resources in
sucha way as to meet all demands for fund
redemptions according to contractual terms.
The RCF was extended to mature in five
years and now incorporates a carbon
emissions target.
The asset liquidity distribution across
fundshas remained broadly unchanged.
Acentralised liquidity analysis and reporting
toolkit is fully embedded. Market liquidity
has largely returned to pre-pandemic levels
– the WallStreetBets short squeeze had
aminimal impact on our funds but led
tofurther developments of the liquidity
analysis framework.
Market risks
31 4
Risk Mitigants Status and trend Change
5.
Investment
book
Man Group uses capital to seed new
fundsto build our fund offering, expand
product distribution and generate returns
for shareholders. Man Group also holds
Collateralised Loan Obligation (CLO) risk
retention positions until the product
maturity, and in 2021 participated in
aUSCLO Warehouse to facilitate a
product launch.
The firm is therefore exposed to a decline
in value of the investment book.
A disciplined framework ensures that each
request for seed capital is assessed on its
risk and return on capital.
Approvals are granted by a 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 and
hedges are monitored regularly by Group
Risk and reviewed by the SIC.
The investment book grew over 2021. The
seeding book returns were positive, with the
benchmark hedges performing as expected.
Man Group continues to use repo and swap
financing for some of the CLO and seed
positions to release liquidity but retain the
market risk.
A framework for active balance sheet risk
taking in Man Group funds is being
developed, seeking uncorrelated returns
to Man Group’s dominant flagship funds.
6.
Pension
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.
The UK pension plan has a low net exposure
to UK interest rates and RPI inflation. The
return-seeking assets are low volatility and
have a low correlation to directional equity
markets. Longevity is the largest remaining
risk but is uncorrelated to Man Group’s
other risks.
A triennial valuation exercise as of year-end
2020 led to a small funding contribution
from Man Group. As of 31 December 2021,
the scheme has a surplus on both an
accounting and actuarial basis which brings
down the overall risk assessment. The
impact of COVID-19 has not had a material
impact on the longevity assumptions.
36
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Man Group plc | Annual Report 2021
Risk management continued
Operational risks
31 4
Risk Mitigants Status and trend Change
7.
Information
technology
and business
continuity
Risk of losses incurred by IT software
andhardware failures resulting in system
downtime, severely degraded performance
or limited system functionality.
Business continuity risks may arise from
incidents such as a denial of access to a
key site or a data centre outage, which
could lead to business disruptions.
Technology plays a fundamental role in
delivering our objectives, so the IT functions
work closely with each business unit to
ensure work is correctly prioritised and
financed. The prioritisation process
considers the life cycle of both hardware
and software to ensure both are adequately
supported and sized. The firm’s operational
processes include mature risk, incident
and problem management procedures
tominimise the likelihood and impact
oftechnology failures.
Business continuity risk mitigation
includesdetailed planning and testing of
remote access and contingency/recovery
operations, and ongoing risk and threat
assessments.
In 2021 we commenced our move to a
long-term flexible working model which is
being implemented globally. We continue to
improve our technology offering, capability
and security to support the new working
model. Particular focus and investment
hasbeen on hardware and software
enhancements to core technology and
datacentres, and the enrichment of the
trading and operations platform. Progress
incentralisation of order management
technology for the firm also continues apace.
Remote working and collaboration
technologies facilitated a seamless move
tomass working from home at the start
of the pandemic and evolved in late 2021
into secure and efficient flexible working
arrangements for the majority of staff.
8.
Internal
process
failure
Risk of losses resulting from inadequate
orfailed processes within Man Group.
Man Group’s risk management framework
and internal control systems are based on
athree lines of defence model.
Heightened risks relating to the pandemic
and remote working have continued to be
an area of management focus in 2021.
Man Group remains focused on enhancing
its systems and control processes where
required and ensuring internal process
failures are kept to a minimum.
Man Group has not observed an increase
inmaterial internal events in 2021, nor any
material operational events directly
attributable to COVID-19.
9.
External
process
failure
Man Group continues to outsource a
number of functions as well as managing
outsourcing arrangements on behalf of
itsfunds. The risk is that the outsourced
service providers do not perform as
required, resulting in knock-on implications
for our business and processes.
External service providers continue to face
heightened risks attributable to COVID-19.
Man Group’s operations team has
implemented a robust methodology
(including ongoing third-party due
diligenceand KPI monitoring) to confirm
that outsourced service providers are
delivering as required.
The firm has concentrated its outsourcing
into a smaller number of carefully selected
and proven outsource providers with which
it has established working relationships
allowing for greater process consolidation
and rationalisation.
We observed a modest increase in issues
faced by some of our third-party providers
during 2020 and 2021. However, these have
not had any material loss impacts.
10.
Information
and
cybercrime
security
The risk of loss resulting from cybercrime,
malicious disruption to our networks or
from the theft, misplacing, interception,
corruption or deletion of information.
Some of the risks and potential impacts
are heightened while the majority of the
firm is working from home.
Man Group has established information
security and cyber security programmes
that are aligned with industry expectations
and best practices. They are continuously
reviewed and adjusted to keep pace with
the regulatory, legislative and cyber threat
landscapes. Man Group practises defence
in depth by layering security controls and
using state-of-the-art technologies, enabling
us to detect and prevent malicious activities
and complex cyber-attacks.
The cyber landscape continued to evolve
throughout 2021 with criminals seeking to
exploit emerging supply chain vulnerabilities
as well as COVID-19 and working from
home. Key threats arise from social
engineering (phishing), ransomware,
denialof service and cloud data storage/
processing attacks. Criminals continued
toincrease attacks against remote access
infrastructures, aiming to disrupt workforces
and breach poorly configured remote
access gateways and services.
Man Group did not experience any material
client or operational impact from cyber
events in 2021, nor did Man Group
experience any material data breaches
involving customers’ personally identifiable
information (PII). Our security operations and
incident response functions remained fully
operational.
Link to strategy
1
Innovative investment strategies
2
Strong client relationships
3
Efficient and effective operations
4
Returns to shareholders
37
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
Operational risks continued
31 4
Risk Mitigants Status and trend Change
11.
Legal and
regulatory
The global nature of Man Group’s business,
the expansion of its investment businesses
and the acquisition of new investment
businesses, with corporate and fund
entities located in multiple jurisdictions and
a diverse investor base, makes it subject
toa wide range of laws and regulations.
Failure to comply with these laws and
regulations may put Man Group at risk
offines, lawsuits or reputational damage.
Changes in laws and regulations can
materially impact Man Group or the sectors
or the market in which it operates.
Man Group operates a global legal and
compliance framework which underpins
allaspects of its business and is resourced
by experienced teams. These teams are
physically located in Man Group’s key
jurisdictions, helping them to understand the
context and impact of any requirements.
Emphasis is placed on proactively analysing
new legal and regulatory developments to
assess likely impacts and mitigate risks.
Man Group continues to liaise directly and
indirectly with competent authorities e.g.
FCA, SEC, FINMA, CBI.
Man Group continues to experience
newregulatory requirements. In 2021 this
included implementation of the Investment
Firms Prudential Regime (IFPR) regulatory
capital and remuneration requirements.
Man Group maintained an open dialogue
with regulators throughout 2021 around
theimpact of COVID-19 on markets, fund
performance and our resilience.
Work continues on a number of regulatory
initiatives including IBOR transition, IFPR/
ICARA and climate change disclosures
(TCFD).
Reputational risks
1 32 4
Risk Mitigants Status and trend Change
12.
Negative
publicity
The risk that an incident or negative
publicity undermines our reputation as
aleading investment manager and place
to work. Reputational damage could result
in significant redemptions from our funds,
and could lead to issues with external
financing, credit ratings and relations
withcore counterparties and outsourcing
providers.
Our reputation is dependent on our
operational and fund performance and the
conduct of our employees. Our governance
and control structure mitigate operational
concerns, and our attention to people
andinvestment processes are designed
tocomply with accepted standards of
investment management practice.
Weencourage a culture of openness,
inclusion and diversity.
Man Group enjoys a good reputation
andwork continues to build Man Group’s
profile and protect its reputation across
stakeholder groups.
We are alert to the increased risk of any
suggestion of greenwashing if the ESG
credentials of an investment strategy does
not meet client, regulator or the wider
public’s expectations.
Climate change risks
1 32 4
Risk Mitigants Status and trend Change
13.
Physical and
transition
risks
Physical risks of business disruption,
property damage or to employee
well-being due to a severe weather event
or longer-term shifts in climate patterns.
The primary physical risk of the 1.5 to
2°Cscenario is to Man Group’s offices
and data centres, principally the London
headquarters which may be exposed
toflooding of the River Thames.
Transition risks as the world moves
towards a low-carbon economy can
belegal, regulatory, technological,
marketor reputational.
The risks to Man Group are described
inthe call-out box on page 30.
Man Group has a small number of
employees and a relatively limited physical
footprint. Man Group is sufficiently agile to
be able to adjust to medium-term transition
risks and capture any opportunities.
The firm continues to focus on providing
investors with products that incorporate
ESG analytics. This is augmented by
activestewardship of fund assets to
influence positive change. In 2021 the firm
announced its commitment to net zero
carbon investment portfolios by 2050,
andhas previously committed to being
a net zero carbon workplace by 2030.
The firm will continue to monitor and
manage other medium/long-term risks
through business as usual reporting and
management processes for the relevant
principal risk (see risks 1, 7, 11 and 12).
Emerging risks
1 32 4
Risk Mitigants Status and trend Change
14.
External risks
Primarily external in nature and
complementary to the principal risks
whichare focused on current internal
risk.The emerging risk categories include
natural disasters, pandemics, disruption
tofinancial markets and business
infrastructure, geopolitical risk and
changes in the competitive landscape.
The Board and Group Risk monitor
emerging risks, trends and changes in
thelikelihood of impact. This assessment
informs the universe of principal risks faced
by the firm.
The principal and emerging risks
werereviewed by the Board in 2021.
Nochanges were made to Man Group’s
headline principal risks, but some
likelihoods and impacts of the
emergingrisks were reassessed.
38
Strategic report
Man Group plc | Annual Report 2021
People and culture
A deep and diverse pool of talent
We seek to attract and retain the best talent and ensure
that everyone can reach their full potential. We believe
inthe importance of an inclusive and collaborative
environment, where there are equal opportunities for
success. Promoting and celebrating diversity is firmly
embedded in our culture and values and is a critical
factorin the long-term growth of our business.
2021 continued to present numerous
challenges for our global workforce. Rather
than transitioning back to ‘normality’ as we
once knew it, we spent much of theyear
operating under restrictions of somesort.
Attimes when we were able to return to our
offices, we leveraged the lessons we learned
while operating remotely to provide greater
flexibility for our staff.
We have now implemented an agile working
framework in all locations, welcoming staff
back to the office, when possible, and
offering more flexibility. Our COVID-19
Response Team continues to monitor local
guidance across all jurisdictions, disseminate
information across our organisation and
coordinate office closures and reopenings as
required. During the year, we also continued
to expand our staff well-being programme,
supporting our people through the
challenges that they faced, whether related
to their health, families or personal
circumstances.
Agile working
We launched our global Agile Working
Framework in July, which allows staff to work
from home as well as in the office. The
framework includes four categories: Hub,
Club, Roam and Home, providing our staff
with flexibility on the number of days spent
inthe office based on their role. We have
supported employees by providing them
with an Agile Working Guide, which defines
the Agile Framework and includes help on
technology tools useful for collaboration and
support on how to maintain team cohesion
and build relationships within an agile
framework. We also expanded our guidance
for our people managers, launching an Agile
Working Toolkit including information on
managing staff remotely and assessing
performance when staff are working
between locations, and held a series
ofroundtables covering their questions
andconcerns so that guidance could be
tailored appropriately.
Redesign of our office space
We have completed an extensive
refurbishment of our Riverbank House office
in 2021, where all of our London-based
teams are now located. We have designed
the office space to support the adoption
ofour new hybrid working model, locating
teams in ‘neighbourhoods’. All staff have
laptops so they can work from all parts of the
building, which includes break-out areas for
brainstorming as well as cafes and lounges
for collaborating. The new office space also
includes a mothers’ room, a mindfulness
Nationalities
59
Internal transfers
226
Uptake of enhanced parental
leave
50
D&I report
CSR brochure
39
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
room, a music room and a well-being suite,
encouraging staff to prioritise their health
whilst in the office. We held a photo
competition during 2021, under the theme
of‘optimism’, and the winning entries will
bedisplayed around our new office, further
reinforcing the importance of our people’s
contribution to our office space.
Inclusive workplace
The new office space has been equipped
with best-of-breed technology, which has
allowed us to host events such as firmwide
meetings in our new town hall space while
simultaneously broadcasting them live
andenabling connectivity for all of our
staffglobally. We continue to run our virtual
initiatives that were introduced during the
pandemic, such as the ‘Man Group Coffee
Club’ (randomly pairing individuals from
across the firm) and ‘Minds at Man Group’,
which has now hosted 55 sessions featuring
employees — and some of our non-
executive directors — giving talks about
topics (both business and non-business
related) they are passionate about.
Employee engagement
The welfare of our employees continues
tobe at the heart of the initiatives that we
implement. Our staff survey for 2021 recorded
an engagement score of 81%, with 1,068
ofour employees participating. This annual
survey was supported by other pulse surveys
run across business units throughout the year
to ensure that employees have an opportunity
to provide feedback. We have been able to
incorporate this information into our planning,
our engagement agenda, and updates to our
well-being programme.
Our well-being programme continues to
betailored for our workforce and topics
covered in 2021 ranged from mindfulness
and nutrition to menopause and mental
health. We held events with Jonny Benjamin
MBE and Neil Laybourn to mark Mental
Health Awareness Week in May and have
also made a well-being app available to
allemployees.
To continue to foster the sense of community
and belonging within Man Group, we have
used a variety of internal communications
tools including Slack, our Daily Newsletter
and our intranet to share regular updates
and announcements. We do this to
ensureour people are aware of the latest
developments across the firm and business
priorities. Our CEO also continues to send
his weekly Friday evening missive, giving
business updates and ‘village news’. Where
lockdowns and jurisdictional restrictions have
allowed, some of our staff have been able
totravel to other offices and host small
events in-person. Kate Barker and Zoe Cruz,
two of our non-executive directors, have
hosted virtual sessions with employees
specifically focused on staff engagement.
+ Testimonial
Gordon Coughlan
COO, Alpha Technology
Man Group
Q: How have you pursued your own
professional development over the past
year? Were there particular initiatives from
the Talent and HR team at Man Group that
you found helped you?
A: I’ve been fortunate over the years to have had
fantastic support from our Talent and HR teams
as my career at the firm has progressed. This past
year has been no exception. I had one-on-one
executive coaching, which was immensely helpful
in stepping more fully into my leadership role
inAlpha Technology, allowing me to better
understand my risk appetite and preferred
leadership style.
I was also nominated by Luke Ellis to be part of
the inaugural Distinctive Leadership Programme, a
set of intensive coaching and team engagements
which brought together a cohort of emerging
senior leaders from across the firm. Over the
course of several months, we were asked to
examine, improve, and ultimately take ownership
for how we were showing up as leaders. This
tooka lot of energy and thinking time, but it was
very much worth the investment. I’ve particularly
benefited from the enduring cohort-effect, having
a network of people across the firm that are
navigating similar leadership challenges to
myown.
Q: What was the most surprising area
ofyour professional or personal growth?
Howdid this come about?
A: On the Distinctive Leadership course, I got the
unexpected feedback that I was ‘too professional’
in my interactions at times and that I should let my
guard down and share more of my story. I recall
playing that back to my mentor at the time which
elicited much head nodding. Thinking about it
more, I had been looking for ways to be more
tangibly involved in Pride, our LGBT+ network,
andso putting the two together, I decided to write
a public profile about the importance of being
avisible role model. This has since led to many
great conversations and connections with people
inside and outside of the firm.
40
Strategic report
Man Group plc | Annual Report 2021
People and culture continued
Talent acquisition, retention
anddevelopment
We believe that the success of our firm
isdue in huge part to our staff. Throughout
this unusual year, our focus onattracting
andretaining the best talent has remained
atop priority, and we havecontinued our
emphasis on talent development as a key
way to maintain our competitive edge.
Ourtalent development strategy is a fully
established, core part ofour business. We
believe we have the processes, technology,
products and services to enable us to
maximise the potential of our people. We
seek to provide career development and
performance support to staff at all levels
andin 2021, 90%of employees voluntarily
engaged in thissupport.
Executives continue to receive support
toensure business areas are managed
effectively. In 2021, along with the transition
to agile working, many parts of the business
were provided with team development
support and over 200 employees were
identified for 1:1 talent development.
Following career anddevelopment
conversations, these employees were
furtherempowered with coaching,
mentoringor other forms of personal
development. We are committed to
ensuringthat every employee at the firm
receives the support they require to
maximise their potential.
In 2021, ‘Adaero’, a proprietary feedback
app, went live to the whole firm for the
firsttime and take-up has been strong.
Wehave also seen a number of new
initiatives where internal expertise is shared
amongst colleagues, often in the form of
virtual roundtables, which further fosters
ourculture of knowledge sharing and
collaboration.
Our talent development efforts are guided
bya globally adopted talent review process,
which seeks to assess the performance and
potential of our employees. The data and
insights from this process are part of our
Senior Executive Committee’s bi-annual
talent and succession planning reviews. The
retention and development of our workforce
is of paramount importance, and we strive
tomake internal appointments wherever
possible to maximise career progression.
During 2021, internal promotions included
the appointments of: a Deputy CEO and
CFO for the firm, COO at Man Numeric,
Head of Investment Risk at Man AHL, Head
of Quant Investment and Research, and
theHeads of Human Resources covering the
UK and EEA, and the US and Rest of World.
One of our priorities is to continue to build
ajunior talent pipeline via entry-level (both
graduate and intern) programmes within
investment management, sales and
marketing, technology and finance and
operations. This year we have expanded
ourreach to find diverse candidates for our
entry-level programmes and have worked
with #10000BlackInterns, GAIN (Girls Are
INvestors), Girls Who Invest, the Bright
Network, Generating Genius and SEO
London. We were also delighted to offer
allour UK virtual summer interns positions
onfuture graduate programmes. These
programmes run for two years and
uponcompletion our trainees possess
acomprehensive skillset, a sound
knowledge of our business, and are well
placed to move into permanent roles.
Hiring the best talent from around the
worldis fundamental to our business and
weremain committed to doing so. As a
global firm we create opportunities for our
people to gain international experience via
Our culture of collaboration enables us to maximise
learningfrom each other. A third of our employees engage
in mentoring, and we have plethora of other opportunities
for expertise to be shared amongst colleagues. It really
isadistinguishing feature of our culture.
Lara Carty | Global Head of Talent
short-term placements and permanent
relocations, although this has been reduced
during the pandemic. As part of this, we
continue to monitor immigration updates
inrelation to their potential impact on our
workforce, ensuring our staff have the
correct guidance and documentation
totravel between countries.
We wish to attract the brightest and the
bestat all levels of the firm and provide
aworkplace that promotes innovative
thinking– a vital component of our ability
todeliver results for our clients. Alongside
our inclusive culture and talent strategy,
ourremuneration policies and practices
aredesigned to enable us to be competitive
in the markets in which we operate and
arebenchmarked annually. Remuneration
includes combinations of salary, annual
performance bonus and deferred share
and/or fund awards, alongside arange
ofnon-cash benefits. Our deferral
arrangements are a key mechanism
forfocusing our employees on long-term
performance, aligning their interests with
those of our clients and shareholders.
During2021, we once 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 102 to 133 for the Directors’
Remuneration report
Man Group’s total headcount, including
contractors and consultants, has increased
from 1,469 at 31 December 2020 to 1,523
at31 December 2021.
41
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Man Group plc | Annual Report 2021
+ Testimonial
David Martin
Head of Legal Entity Control
andFinance Operations
Man Group
Q: How have Man Group’s family-friendly
offerings helped you with the adoption
ofyour children?
A: The flexibility Man Group has provided me
hashelped our family tremendously. We adopted
two young children over the last two years.
Theadoption process involves appointments
andassessments (just as with any addition to any
family!) and I have greatly welcomed the flexibility
of the firm and my team in accommodating these.
I was able to use the volunteering allowance
towork with children, which helped with our
application to adopt and have used the Enhanced
Parental Leave offering for each adoption.
Theflexibility of Parental Leave was really helpful;
Iwas able to take two weeks’ leave when each
ofour children was placed with us, which helped
enormously in getting to know their immediate
needs and helping them settle into our family.
Iwas then able to take the other 18 weeks of fully
paid leave later on, after we had found the right
time for our family to take the additional leave.
Q: How does the new agile working
framework help with your family life?
A: I have really welcomed agile working to help
memanage my family responsibilities day-to-day.
Rather than being away in the office from Monday
to Friday, I work from home for some of the week,
so I am more present for my family. I have seen
one of my children take their first steps and the
other start smiling! I welcome seeing my manager
and their manager working from home, showing
how our agile framework helps them manage
work/life balance. It was really rewarding to hear
that I had been a similar role model for others,
demonstrating the importance of taking parental
leave and how flexibility can work in practice.
Diversity, equity and inclusion
Man Group’s culture is based on mutual
respect for others, a commitment to
prioritising diversity, equity and inclusion
(DE&I) and a zero tolerance approach
todiscrimination of any kind. The Senior
Executive Committee champions this and
several of our senior management are
involved in industry working groups and
committees, giving us a voice both externally
and internally and enabling us to help drive
change in the industry as well as within Man
Group. Our work is coordinated by our DE&I
Steering Committee, which progresses our
initiatives and agenda under the umbrella
ofDrive, our global programme for the firm’s
DE&I initiatives.
Our Drive umbrella includes the following
active staff networks:
• BEAM (our network for Black Employees
and Allies at Man)
• FAM (our network for Families At Man,
ofall shapes and sizes)
• PRIDE@Man (our network for the LGBT+
community and allies)
• WAM Network (Women At Man, our
network promoting gender balance at
ManGroup)
In addition, we have workstreams focused
on NextGen, Social Mobility, Neurodiversity
and Disability.
Inclusion and allyship
During 2021, we have continued the theme
of allyship and held an ‘Allyship Week’ in
March with our networks and workstreams
coming together to host several events
including a book club, a quiz, a lunch and
learn on the importance of allyship and
awebinar with LGBT Great on ‘The 5 traits
ofallyship’. Our networks and workstreams
also joined together for Global Inclusion
Week in September to promote our work
and resources to fellow colleagues and
tochampion the achievements of some
ofour volunteers.
The focus on allyship has been echoed
inthepartnership we launched with
Exceptional Individuals (as part of our
Neurodiversity workstream) this year,
whohave hosted webinars for employees
and managers on the main types of
neurodiversity as well as drop-in clinics
andworkplace needs assessments for our
employees. We have also become registered
as Disability Confident Committed (Level 1)
with the Department for Work and Pensions
and have once again taken part in
International Day of Persons with Disabilities,
joining #purplelightup with our fellow
members of PurpleSpace.
Our Social Mobility workstream launched
inJanuary with a focus on increasing the
aspirations and improving the life chances
ofyoung people while growing the pipeline
ofcandidates to financial services. Members
ofthe workstream have engaged with
threepartner secondary schools and held
sessions for young people across all of their
year groups. In addition, after a consultation
with the schools, we have held mentoring
circles with teachers that have included
focus on leadership, difficult conversations,
and talent development. Alongside this
activity, we have worked with industry
initiatives to help develop best practice
andstrategies to promote and retain talent
from lower socio-economic backgrounds
and one of our employees was appointed
tothe Advisory Board of the taskforce set
upby the City of London corporation.
In the same vein, we were pleased to
sponsor Green Skills Week in 2021, an
initiative led by Speakers4Schools where
wehosted a number of talks on responsible
investing and held a competition for
schoolswhere teams built a portfolio of
fivebusinesses based on their research
ofresponsible and sustainable practices.
42
29% 71%
27% 73%
50% 50%
S
taff
S
enior Managers
B
oard
Female Male
Strategic report
Man Group plc | Annual Report 2021
People and culture continued
Wealso continue to partner with the King’s
Maths School – a specialist state-funded
school for gifted mathematicians that recently
won the award of Sixth Form College of the
Decade – to mentor students and contribute
to their learning.
We continue to hold a variety of internal
events led by our networks and workstreams,
which have included:
• WAM leading a celebration of International
Women’s Day and International Men’s Day;
masterclasses on ‘Presence, Authority and
Impact’; lunch and learn sessions (‘How I
did it! series’) celebrating colleagues’
achievements; and peer mentoring circles
on a variety of topics from coping with the
menopause through to Personal Resilience.
• PRIDE@Man and FAM working together
tohold a webinar on ‘How to speak
confidently to children and teenagers on
LGBT+ matters’. PRIDE@Man also marked
National Holocaust Day and LGBT History
month and FAM marked Children’s Mental
Health week, hosting a session with
Beacon on seeking funding for complex
care in the UK, and providing online
activities to help keep children entertained
at home, including a magic show, cookery
classes, a Lego workshop and various
artworkshops.
• BEAM holding celebrations of UK and US
Black History Month with guest speakers
Wes Moore and Michael Barrington Hibbert.
We’re excited to extend our partnership with King’s Maths School.
Ithink the achievements of the school are exceptional and I continue
to be impressed by the breadth of the school’s initiatives. Those who
mentor the students really value the relationships and give wonderful
feedback on the drive, knowledge and purpose of the students as
they apply maths to real-world problems.
Slavi Marinov | Head of Machine Learning, Man AHL
Man Group is supportive of the requirement
for employers in the UK to calculate and
publish their gender pay gap, and we have
again published our figures within our annual
Diversity and Inclusion report. The data still
demonstrates the lower representation of
females in investment management and
senior roles, but we are committed to
addressing this and continue to make
significant efforts to do so. We achieved
gender parity on our Board of Directors in
2020 and now, in 2021, we have a female
Chair of both the Audit and Risk Committee
and the Remuneration Committee. Having
signed up to the Women in Finance Charter
in2018, we achieved our target of 25% female
representation in senior management during
2020 and are progressing towards our target
of 27.5% by the end of 2022 and30% by the
end of 2024. The number ofwomen in senior
management roles isoneof our non-financial
KPIs, and from this year, forms part of the
executive director’s remuneration. Further
information on this can be found on page 104.
While we do not see a gender pay gap across
similar roles, we recognise that this isn’t
enough on its own to attract and retain talent
and we are taking further action through the
initiatives articulated in this section to foster
better gender diversity, particularly in senior
and investment management roles.
We have seen ongoing progress in terms
ofgender balance within our graduate
recruitment over the past few years, and
wecontinue to work proactively with schools,
societies and education providers to promote
careers in the financial services sector at
agrassroots level. Our initiatives range from
hosting events to encourage the pipeline of
female talent at the firm and in the broader
industry, to internal mentoring and coaching
for women both on an individual level and
through peer mentoring circles. We also
continue our partnership with Women
Returners to support those returning
toworkfollowing a career break.
We champion our senior female role models
at the firm and this year we saw several of
them being recognised for their work. Robyn
Grew achieved Highly Commended in the
category of ‘International Investment Woman
of the Year’ at Investment Week’s Women in
Investment Awards, featured on EmPower’s
20 Advocates Executive List and was
recognised on the OUTstanding 100 LGBT+
Executives Role Model List for 2021. Tania
Cruickshank won in the Collaborative
Leadership category at the WIPL awards
andthen won in the category of Team Leader
of the Year at Investment Week’s Women
inInvestment Awards. Carol Ward was
recognised in the 100 Women in Finance
listand featured in the HERoes role model
awards on the 100 Women Executive list.
AllaMaher and Charlie Beeson were both
finalists in the Women in Tech Excellence
Awards with Charlie also being awarded
Highly Commended for the Change
Excellence award at Investment Week’s
Women in Investment Awards. Ali
Hollingshead won in the category of
‘Individual Achievement’ in Market Media
Group’s 2021 European Women in Finance
Awards. Man Group also won the Citywire
Gender Diversity Award for the Most
Improved Retention Rate.
Man Group is committed to providing equal
employment opportunities, and discrimination
by any individual on the grounds of age,
disability, gender, race, religion, sexual
orientation or educational background is not
tolerated. Full and fair consideration is given
by Man Group to all employment applications,
including from people with disabilities,
considering their aptitudes and abilities.
During 2021, we have been able to configure
our systems to allow staff to define their
gender pronouns and to enter a new category
of diversity data reflecting data on socio-
economic status. This enables us to know
more about our people and tailor our
initiatives appropriately.
More information about Man Group’s
commitment to DE&I can be found in the
Diversity and Inclusion report and our
CSRbrochure.
Staff by gender (at 31 December
2021)
1
1 Based on 1,498 FTEs and 195 senior managers.
43
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
Embedded within our culture
at Man Group is the desire
to give back.
Our employees take pride in contributing to
the local communities in which we operate.
We have continued to coordinate these
efforts through ManKind, our employee
volunteering programme which provides a
broad range of opportunities for our people
to be involved with, coordinated by our
regional volunteering captains. Our ManKind
programme operates globally, allowing each
staff member to take two days’ paid leave
per annum to volunteer. In London, we
began a new volunteering partnership with
East London Business Alliance (ELBA),
having been a founding member of the
charity over 30 years ago. This partnership
enabled our staff to volunteer in a variety of
ways, from assisting in community gardens
to helping the annual Toy Appeal, which
saw18,000 toys donated to children
inEastLondon.
The annual festive fundraising activities
concluded the year with a global festive
clothing day on 14 December involving all
offices globally. Additionally, in the UK, the
Last Hour Appeal, whereby staff can choose
to donate the last hour of their salary for the
year, was again a success. In the UK, this
initiative, along with Festive Jumper Day,
raised £14,006 for Molly Olly’s Wishes –
acharity voted for by UK staff. In the US,
their fundraising appeal raised $4,311 for
StJude Children’s Research Hospital.
Donations to the Man
Charitable Trust in 2021
$4m
Employee volunteer hours
in2021
1,200+
The Man Charitable Trust reflects a longstanding
commitment to good causes at Man Group; we
carefullyconsider the charities with whom we partner
and,where possible, offer more than financial support.
Thisincludes providing office space for training and
fundraising events, in-house expertise and open days,
where we provide insightto our business and to individuals
who would notnecessarily have access to this industry.
TheTrustees and I are extremely proud to be part of the
ManCharitable Trust.
Steven Desmyter | Chair of the Man Group plc Charitable Trust and Global
Co-Head of Marketing and Sales
Employees at Man Group are also able to
support charitable programmes via their
Give As You Earn accounts, and 87 staff
participated this year. The Man Group plc
Charitable Trust (the Man Charitable Trust)
also proudly matches independent
fundraising by employees up to the value
of£1,000.
Established in 1978, the Man Charitable
Trust supports a diverse range of charities in
the UK, with a particular focus on improving
education. Steven Desmyter became Chair
during 2021, taking over from Teun Johnston
after his term came to an end. The Man
Charitable Trust approved grants to the
following charities during the year: Auditory
Verbal UK, City Gateway, Discover Children’s
Story Centre, First Story, Greenhouse
Sports, Hibiscus, Maths on Toast, MyBnk,
NSPCC, Read Easy, Refugee Education UK,
The Brilliant Club, The Switch, and XLP.
The Man US Charitable Foundation provides
funding to US charitable organisations,
particularly those with a literacy and
numeracy focus. In 2021, grants were given
to the following Boston and New York
programmes: Defy Ventures, Jeremiah
Program, Read to a Child and South
BronxUnited.
Contributing to our communities
44
Strategic report
Man Group plc | Annual Report 2021
Overview
Responsible investment and corporate social
responsibility are both of fundamental
importance to our stakeholders. As a firm, we
are committed to reducing global warming
and improving diversity and inclusion,
knowing that diversity is crucial to informed
decision-making. As an investor, we do not
adhere to a ‘one size fits all’ approach to
responsible investment across our different
investment engines. We’re continuously
innovating and exploring opportunities across
our businesses to offer more data-driven,
insightful solutions for our clients.
For more information on responsible investment,
please visit:
www.man.com/responsible-investment
Strategy spotlight
GPM Community Housing
• Launched: 2021
• Investing in the UK affordable housing sector
• RI-dedicated strategy
• 7 investments in 2021, committing to funding
nearly 800 new affordable homes
$55.2bn
of ESG-integrated assets under
management
7%
reduction in total carbon emissions in
2021 (using the market-based approach
including Scope 2 and Scope 3
(upstream) leased assets)
£400
offered to every employee to donate
toa local food bank or homeless charity
in 2021
45
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
Sustainability +
Responsibility
46
Strategic report
Man Group plc | Annual Report 2021
Responsible business
We have a responsibility to do what we can to create
amore sustainable and equitable future for our clients
andbroader society. We believe managing ManGroup
inaresponsible way is linked to our long-term success.
Therefore, wecontinue to conduct our business with
integrity, to challenge ourselves to be better, to raise
thebar and toimprove the way in which we operate.
As an asset manager and listed Company,
we recognise that Responsible Investment
(RI) and Corporate Social Responsibility
(CSR) are both of fundamental importance
toour stakeholders.
Our leadership in quantitative investing
andtechnology allows us to analyse and
interrogate complex ESG data, and tocreate
intelligence-driven responsible investment
solutions in all asset classes across
long-only and alternative strategies.
We have made significant progress in RI
inrecent years and have now successfully
integrated ESG within $55.2 billion of
ourassets under management. We have
elevated the importance of this metric,
including it as a non-financial KPI from 2021
onwards (see page 23). From 2022 onwards,
executive remuneration will also be linked
tospecific ESG aligned metrics and more
details of this can be found on page 104.
We also recognise the importance of being
educators and thought leaders to drive the
evolution of responsible investment, and of
collaborating with standard-setting bodies
and industry-wide initiatives to advocate
forbest practice. In July 2021, we became
asignatory of the Net Zero Asset Managers
initiative, committing to the attainment of
netzero emissions within our investment
portfolios by 2050. For the first time this
year,we have disclosed the greenhouse
gasemissions (GHG) from our assets under
management and the weighted average
carbon intensity (WACI) for our key
investment strategies on pages 59 and 60
ofthis section. Whileour estimates reflect
progress, thedata still present a number
oflimitations and we remain committed
torefining our analysis over time.
As a global business we are committed
tominimising our operational impact on
theenvironment and to reducing global
warming. Acting responsibly is part of our
DNA and we are continually improving
ourdiversity, equity and inclusion, not least
because we believe that diversity of talent
– and of thought – is crucial to cultivating
more informed and creative decision-
making, leading to better investment
outcomes.
Man Group has committed to achieve net
zero carbon emissions in its workplaces
by2030, and was recognised as an FT
Europe Climate Leader in 2021 for our work
reducing emissions. We are also proud,
active signatories of the United Nations
Global Compact, showing our support
oftheUnited Nations’ (UN) ten principles
onhuman rights, labour, the environment
andanti-corruption. The UN’s Sustainable
Development Goals (SDGs) guide our ESG
initiatives and ambitions, and more detail
onour broad approach to CSR can be
foundin our CSR brochure.
We are also a registered supporter of the
TCFD and have included disclosures aligned
to the recommendations in this report,
providing transparency on our approach
tomanaging climate-related risks and
opportunities across our business. More
details of this can be found on pages 61
and62.
We acknowledge there is still much more
todo and the role that the investment
management industry can play in driving
change through responsible investment
israpidly evolving. We are steadfast in our
commitment to progress and will leverage
our market-leading data-driven investment
techniques to advance this evolution.
ESG-integrated AUM at December 2021
$55.2bn
according to the Global Sustainable
Investment Alliance (GSIA) definition. To
provide a consistent framework around Man
Group’s calculation of ESG-integrated AUM,
we base our calculation on the GSIA’s ‘ESG
Integration’ sustainable investment category.
See further details on our methodology for
calculating ESG-integrated AUM on page 55.
Strategy and Governance rating
A+
Source: UN PRI report 2020
Active Ownership rating
A
Source: UN PRI report 2020
Introduction
Responsible business
47
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We believe that strong governance is critical to fulfilling
ourfiduciary duty and have further enhanced our ESG
governance framework.
Governance
Our ESG governance framework
incorporates committees to implement and
oversee all elements of our RI and CSR
mandates. It ensures that we have strong
oversight and controls up to and including
the Man Group Board, and that we have
dedicated resources to both deliver on our
ESG commitments and to ensure that the
associated risks are appropriately mitigated.
As a global business, acting responsibly is
part of our DNA and our ESG governance
framework supports our commitment to
minimising our operational impact on climate
change and the environment.
The ESG Leadership team consists of
ManGroup’s Head of ESG (Robyn Grew,
also the firm’s Chief Operating Officer,
General Counsel and Head of Man Group
US), CIO for ESG (Robert Furdak) and
GlobalCo-Head of Sales & Marketing
(Steven Desmyter). The ESG Leadership
team, in conjunction with Man Group’s
Board, sets the overarching ESG vision and
strategy for the firm and seeks to embed RI
and CSR within Man Group’s investment
strategies, operations and culture. The ESG
Leadership team, in conjunction with Man
Group’s Board, sets the overarching ESG
vision, risk tolerance and strategy for the firm
and seeks to embed RI and CSR within Man
Group’s investment strategies, operations
and culture. The team also advances
ESG-related opportunities across the firm
and promotes an internal culture that holds
us to the highest standards of corporate
social responsibility.
Five dedicated committees each have
assigned responsibilities, established
processes to identify, assess and monitor
risks and opportunities, and regularly inform
and report on ESG-related matters to senior
management, the ESG Leadership team
andthe Man Group Board.
At Man Group, we have created an ESG
Centre of Expertise that is responsible for
supporting all our RI activities. Headed by
Robert Furdak (CIO for ESG), this team
drives the integration of ESG and
engagement across the firm and works
withinvestment teams who are ultimately
responsible for the integration of ESG into
strategies they manage.
The team works to ensure that we are up
todate with RI developments, opportunities,
regulations and risks. The ESG Centre of
Expertise also includes ESG thematic
research specialists, who provide insight
intospecific RI topics, thought leadership
and expertise in support of Man Group’s
investment engines.
Organisational structure
Committee Responsibilities Reporting
Responsible Investment
Committee (RIC)
Drives all actions the firm takes to
integrate RI within Man Group’s
investment engines, managing ESG
risks and capitalising on ESG
opportunities
ESG Leadership,
monthly
Responsible Investment
Oversight Committee (RIOC)
Approves the launch of our ESG funds,
oversees the control framework for
each fund and monitors each fund’s
compliance with regulatory and
mandate obligations
RIC,
monthly
Stewardship Committee (SC) Implements the firm’s Global Proxy
Voting Guidelines and Engagement
Policy
RIC,
quarterly
ESG Systems & Governance
Committee
Creates and maintains effective systems
and controls for the implementation of
RI across the firm
Risk and Finance
Committee and ESG
Leadership,
quarterly
Corporate Social Responsibility
Committee
Drives Man Group’s global corporate
social responsibility, sustainability and
climate-related initiatives and monitors
the firm’s environmental impact from
operations
ESG Leadership,
quarterly
ESG Leadership
Corporate Social Responsibility
Committee
ManGroup Board
ESG
Systems &
Governance
Committee
ARCom
RAF
Responsible Investment
Oversight Committee
Stewardship Committee
Responsible Investment
Committee
Our approach
48
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Responsible business continued
Risk management framework
Strategic and/or operational ESG risks to our
business, including climate change risks, are
managed in the same way as other business
risks and are covered by our firmwide risk
management systems.
The firm’s control environment manages
risks in accordance with the statements
made by the Board that reflect the Board’s
risk appetite to the organisation, covering
risks as they apply to both investment teams
and the firm itself. In the event that there is a
breach of risk appetite, risks will be resolved
promptly in line with the firm’s procedures
and processes.
We dedicate significant time and resource
toensure we are abreast of regulatory
changes and engaging with regulatory
bodies. It is a complex, evolving landscape,
and our dedicated committees comprising
senior members of the firm address changes
in ESG regulation.
A focus on climate
Man Group considers climate risks to the
firm 15+ years into the future. It does this
through multi-disciplinary firmwide risk
identification, assessment and management
processes. The types of risks considered
include current and emerging regulation,
technological changes and upgrades,
market risks, reputational risks, acute and
chronic physical operational impacts as well
as upstream and downstream risks. More
information on how we manage climate-
related risks can be found on page 37.
Man Group has a public, firmwide
Environmental Sustainability policy statement
to account for our corporate environmental
impact. This policy document outlines our
commitment to minimise the environmental
impact of our activities, through responsible
use of natural resources, maximising energy
efficiency, reducing greenhouse gas
emissions, zero waste to landfill wherever
possible and recycling or minimising waste.
Our approach cont.
Robyn Grew
Head of ESG
Man Group
As a member of the Senior Executive Committee,
Robyn is also COO & General Counsel and Head
ofManGroup US. In 2021, Robyn was named
Head ofESG, taking overall executive responsibility
for both CSR and RI.
Q: Please tell us about your responsibilities and
areas of focus in terms of ESG atManGroup.
A: I am Man Group’s Head of ESG and as part of
this role I chair our ESG Leadership, which, at an
executive level, sets the overarching ESG vision and
strategy globally for the firm. I also chair the Global
Steering Committee of our internal diversity, equity
and inclusion (DE&I) network, Drive. I am acutely
alive to the intersection of ESG and DE&I; each
contribute to enhancing our success as a firm,
delivering solutions for our clients while also
benefiting society as a whole. At Man Group,
wehave found that by identifying, reinforcing and
continuously improving our culture as a firm,
ourability and drive to move the needle on these
intersectional issues is magnified. There is no doubt
that these areas are complex and difficult, and we
deploy our expertise and commitment to ensure
that we serve our clients and communities well.
Q: Turning to responsible investment, where
do you see ManGroup’s role in the industry?
A: We believe that investing with regard for ESG
factors can drive returns and mitigate certain risks,
while benefiting our communities and the world
around us. The data-driven approach to investing
isone of Man Group’s core strengths. We are
uniquely placed to add value by leveraging our
35years of quant and technology expertise to
navigate the complexities of ESG data, which still
has a short history and is frequently qualitative,
subjective and unstandardised. We believe that
there is a clear case for ‘quant ESG’, and that by
thoroughly analysing and interrogating ESG data we
can create intelligent RI solutions across long-only
and alternative, discretionary and systematic
strategies. There’s no one answer to investing
sustainably. Weadopt a multifaceted and
data-driven approach, by blending intuition
anddata-driven intelligence across our different
businesses. We believe that this builds the most
insightful solutions for our clients.
Q&A
Q: What about ManGroup’s actions
tomitigate climate-related risks?
A: Again, we view climate through the lenses of
responsible investing and our corporate social
responsibility. In terms of RI, we are investing in
multiple climate-related data sources; exploring
innovative ways of incorporating climate
considerations into systematic macro strategies
(anarea where ESG has been challenging to apply);
and launching dedicated climate strategies. In 2021,
we hired a dedicated climate researcher who has
been working with our investment managers in
developing their climate research and strategy
capabilities. Meanwhile, Man GLG has hired an
experienced water and circular economy team
which will launch a dedicated new thematic
strategyfocusing on that important topic. As a
listed Company, we are committed to reducing
global warming and contributing to climate-related
opportunities. We have committed to achieving
netzero carbon in our workplaces by 2030, and
in2021, we proudly became a signatory of the
NetZero Asset Managers initiative, committing
tothe attainment of net zero emissions within our
investment portfolios by 2050. We know that the
increase in severe weather disproportionately
impacts poorer populations, their businesses and
the local economy. This is a social issue, an equality
issue and an example of the intersection between
ESG and DE&I issues.
As we continue our own ESG
journey, we are proud to say
that our sense of corporate
social responsibility, including
DE&I, is central to our culture.
Robyn Grew | Head of ESG
49
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Our operations
ManGroup plays an active
leadership role in addressing
climate change risks.
Our operations
Buildings
Minimising our environmental impact is a
corecomponent of our real estate strategy.
Our UK offices, which account for 70% of our
headcount, are covered by environmental
operating procedures which are aligned
toISO 14001. In 2021, we occupied six
buildings certified by LEED (Leadership
inEnergy Efficiency and Design) and one by
BREEAM (Building Research Establishment
Environmental Assessment Method), accounting
for 80% of our global headcount. Riverbank
House in London, Man Group’s largest office,
is rated ‘Excellent’ by BREEAM. In 2020,
Riverbank House was comprehensively
audited for energy and air-conditioning
efficiency. The environmental performance
audit recommendations have led to significant
investment into new energy-saving equipment
such as LED lighting and plant equipment
upgrades. The building has photovoltaic (PV)
cells for solar power generation.
Energy, water and waste
Man Group procures 100% renewable
energy in jurisdictions where we have
operational control and such supplies are
available. In 2021, 73% of our operations
based on headcount were powered by
100% renewable energy. Currently our water
usage figure comes from operations for
which we have been able to obtain water
usage consumption data. In 2021, our total
water usage was 22,245m³ (2020: 17,372m³).
This increase in water usage is attributed to
an increase in office occupancy (as the UK
Government eased COVID-19 restrictions
mid-year) and the use of data gathered from
operations outside of the UK for the first
time. Despite this increase year on year and
the expansion of our water usage data to
include non-UK operations, water usage
remains 18% below pre-pandemic levels
(2019: 27,221m³). Man Group operates a
zero waste to landfill policy in all jurisdictions
where these services are available. In 2021,
69% of our operations based on headcount
were zero waste to landfill.
This is the first year that we have gathered
Scope 3 waste and water data on a global
basis. Our intent is to obtain Scope 3 waste
and water data for as many sites under our
operational control as we can.
Included under Scope 3 (travel) emissions is
data captured from combustible gases such
as Nitrogen Oxide (NOx) and Sulphur Oxide
(SOx). These emissions are measured in kg
and are an outcome of Man Group’s
third-party ground transportation services.
Even though the quantities involved form a
small part of the Scope 3 (travel) emissions,
we are working with our third-party providers
and evaluating options to reduce or eliminate
these types of emissions, for example, using
electric modes for more of our transportation
needs over time.
Training
All Man Group staff complete a mandatory
training module which outlines Man Group’s
environmental policy and objectives. The
module highlights ways in which staff can
contribute to minimising our environmental
footprint such as reducing waste through
reducing, re-using and recycling.
Environmental awareness campaigns
arealso run in our offices.
Environmental data systems
We strive to deliver clear and transparent
reporting that monitors the measurable
elements within our control. We monitor
andtrack our environmental impacts using
specialist tracking software and an energy
services consultancy to help us to mitigate
risk, maximise opportunities and reduce our
carbon footprint.
PV cells on our Riverbank House
office, London
Riverbank House is rated ‘Excellent’
via BREEAM. The roof houses banks
ofphotovoltaic cells for solar power
generation.
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Responsible business continuedResponsible business continued
Our operations cont.
To reach net zero, we will reduce the carbon
emissions associated with:
• Scope 1 – Direct GHG emissions
• Scope 2 – Indirect, market and location-
based GHG emissions from purchased
electricity
• Scope 3 – All other indirect GHG emissions
e.g. business travel
We outline the interim targets in our strategic
pathway to net zero carbon emissions
(seeright).
Since setting our targets we’ve seen good
progress in reducing our carbon emissions
and have offset all residual emissions by
supporting certified carbon removal projects.
We are pleased to report that we are on track
to meet our emissions reduction targets set
tothe end of 2022.
In 2021, we secured offsets for our estimated
Scope 1, Scope 2 and Scope 3 (travel,
upstream and downstream leased assets,
waste and water) emissions through to 2030.
We acknowledge that carbon offsetting is
only an interim measure and that it does not
remove the need to reduce our own
emissions in the first instance.
While carbon reduction remains our top
priority, we feel it is imperative that we offset
any residual emissions while we work towards
our net zero target.
To do this, as outlined on the next page,
wehave selected four projects that are
protecting forests and wildlife, supporting and
educating local communities, and creating
sustainable livelihoods for local people,
working with two partners, ClimateCare
andNCX.
Carbon net zero commitment
Man Group is committed to reaching net zero corporate
carbon emissions across our global workplaces by 2030.
In2019, we set firmwide targets in line with the Science
Based Targets Initiative to limit the global temperature
increase to a maximum of 1.5°C.
Our strategic pathway to net zero carbon
2020 2022 2024 2026 2028 2030
Scope 1
Reduce natural gas and fuel
emissions by 30%
Set new science-based targets to 2030
Move to green gas supplies in jurisdictions where this
isavailable
Upgrade equipment to ensure efficiency and reduce wastage
Scope 2,
Scope 3
(upstream)
leased
assets
Reduce global energy usage
by 20% and reduce aggregate
Scope 2 market-based and
Scope 3 (upstream) leased
assets market-based
emissions by 50%
Set new science-based targets to 2030
Increase the adoption of 100%
renewable (certified) supplies by
25%
Non-
renewable
energy to
supply <10%
of operations
Non-
renewable
energy to
supply <5%
of operations
Upgrade equipment to ensure efficiency and reduce wastage
Scope 3
Further deploy remote working tools to reduce the need for business travel
Adopt agile working strategies to reduce the need for commuting travel
All scopes
Reduce emissions by prioritising carbon net zero strategies when refurbishing or relocating offices
Adopt agile working strategies to reduce our office carbon footprint
1 We set firmwide targets in line with the Paris Agreement, an
international treaty on climate change adopted in December
2015. The goal of the agreement is to limit global warming
tobelow 2°c, with a preference of 1.5°c, compared to
pre-industrial levels, and to reach global GHG peak emissions
in order to achieve a climate neutral world by 2050.
By funding the projects below, we have sourced over
51,000 tonnes of Verified Carbon Units for retirement.
51
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Man Group plc | Annual Report 2021
Our carbon offsetting efforts
2. Rainforest protection in Malawi
This project, facilitated via ClimateCare,
delivers significant emissions reductions
through forest and biodiversity protection,
aswell as supporting the local community.
The project is targeting the conservation
ofapproximately 170,000 hectares of forest
and working with 45,000 households to
reduce fuelwood use, develop sustainable
livelihoods, increase community resilience
toclimate change, and promote biodiversity.
Providing fuel-efficient cookstoves for every
household in the project zone further
reduces fuelwood consumption.
4. Forest protection across
thecontiguous United States
Through a partnership with NCX (Natural
Climate Exchange Inc.), forest landowners
ofall sizes across the continental US will be
able to access the carbon offsetting market
for the first time. Machine learning, field
measurements and high-resolution satellite
imagery facilitates extremely accurate
carbon storage modelling on an acre-by-
acre basis, inclusive of individual
considerations of each unique tree species.
Man Group is proud to be an early supporter
in such a novel offsetting programme, which
in turn we hope to see federating forestry
protection out to landowners across the US.
3. Grassland preservation
inColorado and Montana
This project, facilitated via ClimateCare,
leverages the power of carbon capture as
a‘below-the-ground’ carbon sink. These US
grassland projects have been developed
with organisations such as the Environmental
Defense Fund and The Nature Conservancy
as an alternative to converting grasslands
toagriculture.
1. Coastal protection from
EasternPanama to the
ColombianPacific Coast
Working with indigenous forest-dependent
communities in the Chocó-Darién Rainforest
has enabled us to help protect one of the
most biologically diverse areas in the world.
This project, facilitated via ClimateCare,
reduces deforestation through making
protecting the forest a viable alternative
tounsustainable agricultural practices
suchas cattle ranching.
52
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Responsible business continued
Our operations cont.
Man Group is a registered supporter of the Task Force onClimate-related
Financial Disclosures (TCFD) and weinclude metrics and targets for the
firmwhere relevant, in line with asset management guidance.
Emissions from operations
Our mandatory annual greenhouse gas
emissions reporting, relating to the firm’s
physical presence, is detailed here pursuant
to the Companies Act 2006 (Strategic report
and Directors’ report) Regulations 2013
andthe Companies (Directors’ report) and
Limited Liability Partnerships (Energy and
Carbon Report) Regulations 2018.
In order to provide our management with
even greater confidence over our processes
and definitions, we have engaged KPMG
toprovide Man Group with an independent
limited assurance over our corporate Scope
1, Scope 2 and Scope 3 (upstream leased
assets and business travel
) emissions, in
accordance with ISAE (UK) 3000 and ISAE
3410 and as accepted by the Carbon
Disclosure Project (CDP). The limited
assurance report is available here, and
werecommend that it is read in full.
Historically, we have only reported our Scope
3 business travel emissions. In 2021 we have
enhanced our Scope 3 emissions disclosure
to include emissions relating to waste and
water, our Riverbank House sub-tenants,
and emissions relating to our seed
investments and fund product investments
held for deferred compensation awards,
inline with the GHG Protocol. We have also
recategorised emissions relating to the global
office operations over which we do not have
operational control as Scope 3 (upstream)
leased assets. We are committed to
enhancing the transparency of disclosure
forour Scope 3 emissions over time.
In 2021, total (market-based) emissions
decreased by 7% from 2020. We
acknowledge that remote working during
theCOVID-19 pandemic has contributed
towards the overall decreasing trend in
ManGroup’s carbon footprint. However,
reductions are also due to the completion
ofa large-scale redesign of our London
headquarters, Riverbank House, which
introduced material energy efficiencies
underBREEAM’s sustainability assessment
methodology. The redesign, which included
using sustainable partners for the design and
construction process, led to the replacement
of existing fluorescent and halogen lighting
with energy-efficient, LED solutions. Upon
project completion BREEAM awarded us
77.29%, maintaining Riverbank House’s
Excellent status.
2021 2020
tCO
2
e, unless otherwise stated UK Non-UK Total UK Non-UK Total
Scope 1 640 1 641* 591 2 593
Scope 2 location-based 1,19 8 5 1,203* 1,206 0 1,206
Scope 2 market-based – 0 0* – – –
Scope 3 (upstream) leased assets,
location-based 918 394 1,312* 1,667 363 2,030
Scope 3 (upstream) leased assets,
market-based 3 394 397* – 363 363
Scope 3 business travel 209 247 456* n/a n/a 650
Total (location-based) 2,965 647 3,612* n/a n/a 4,479
Total (market-based) 852 642 1,494* n/a n/a 1,606
Waste and water 4 1 5 n/a n/a n/a
Emissions from investments – – 52,545 n/a n/a n/a
Downstream leased assets,
location-based 320 – 320 339 – 339
Downstream leased assets,
market-based – – – – – –
Energy consumption (kWh, ‘000s) 9,973 1,514 11,487 16,448 1,462 17,910
Scope 1 and 2
Following a review of the operational control across Man
Group’s global offices and in line with GHG Protocol
guidance, this year we have extracted the emissions
relating to operations over which we do not have
operational control
as Scope 3 upstream leased assets,
and have reflected the sub-tenanted demise within the
building at Riverbank House as Scope 3 downstream
leased assets. We have seen an increase in Scope 1
emissions by 8% (48 tCO
2
e) from 2020, driven by an
increase in office usage as UK COVID-19 restrictions
eased and staff returned to our headquarters, and driven
in part by an increase in diesel generator usage due to
external events such as mains power failures. Our
Scope 2 location-based emissions remain broadly
unchanged and our Scope 2 market-based emissions
show our policy to leverage 100% renewable electricity
wherever possible.
Scope 3 (upstream) leased assets, location-based
We have seen a 35% decrease in emissions (a saving
of 718 tCO
2
e). This is due to continuation of works in
the United Kingdom to streamline our data centres.
Intensity metric (tCO
2
e per FTE) 2021 2020
Total FTE 1,426
3
1,444
Scope 1 0.45* 0.41
Scope 2 location-based 0.84* 0.84
Scope 2 market-based 0.00* –
Scope 3 business travel 0.32* 0.45
Scope 3 (upstream) leased assets location-based 0.92* 1.41
Scope 3 (upstream) leased assets market-based 0.28* 0.25
Total (location-based) 2.53* 3.11
Total (market-based) 1.05* 1.11
* These items are included in the scope of the limited assurance report.
1 Travel emissions calculations exclude taxi travel in Australia and Hong Kong.
2 Following a review of the operational control across Man Group’s global operations and in line with GHG Protocol guidance,
thisyear we have extracted the emissions relating to global operations over which we do not have operational control from our
Scope 2 emissions metrics and recategorised them as Scope 3 (Upstream) Leased Assets.
3 For the purposes of our environmental reporting we have only included headcount that is based in physical offices
(excludingfull-time home workers).
Scope 3 (upstream) leased assets, market-based
We are committed to obtaining greater transparency
ofemissions data for our non-UK operations. In 2021
wehave done so for one more jurisdiction than in 2020.
Coupled with return to work following government
restrictions in many of our offices, this means that
ourScope 3 (upstream) leased assets market-based
emissions have increased by 9% (34 tCO
2
e) from 2020.
Scope 3 business travel
Our Scope 3 business travel emissions show a
decrease of 30% year on year (194 tCO
2
e), driven by
the ongoing global travel restrictions, remaining 88%
below pre-pandemic levels (3,684 tCO
2
e).
Scope 3 other
This year, for the first time we have extended our Scope
3 emissions tracking across a number of categories.
We are now reporting the emissions for our seed
capital and fund product investments, waste and water,
and our Riverbank House sub-tenants (as downstream
leased assets). Our emissions from investments
disclosure includes 71% of our seed capital and 98.5%
of our fund investments held for deferred
compensation awards.
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Intensity metric
Our reporting emissions have been
calculated using an intensity metric,
whichwill enable us to monitor emissions
independent of activity. As Man Group is
apeople-centric business, we expect that
any changes to headcount will impact the
property space we occupy and the amount
of business travel we use. Therefore,
emissions per employee is the most
appropriate metric for our business, as
shown in the table at the bottom of the
previous page.
Methodology
We used the operational control approach
toour greenhouse gas inventory and
reporting boundary, excluding non-Man
Group operational locations and joint
ventures. At all locations where Man Group
are responsible for the utility costs, our
Scope 1, 2 and 3 leased assets emissions
data is gathered, validated and reported
using the GHG Protocol – A Corporate
Reporting Standard as our framework
4
.
Our reporting boundary includes Scope 1:
direct combustion of fuels, Scope 2: indirect
purchased electricity and Scope 3: indirect
emissions from business travel (global air
travel, rail and taxis) and (upstream) leased
assets (location and market-based) using
information from the specific energy sources
or suppliers. This reflects our emissions from
purchased energy and includes details of
renewable energy usage. We applied the
latest UK Government’s Greenhouse Gas
Conversion Factors, the Department for
Environment, Food and Rural Affairs (DEFRA)
and US EPA (eGrid) emission factors. Based
on the nature of our emissions and the
consistency month-on-month, we believe
this is an appropriate representation of
ManGroup’s global annual emissions.
Where locations were outside of our
reporting boundary, these emissions are not
included in the GHG emissions calculations.
We are committed to accounting for and
minimising the carbon footprint of our entire
business, both direct emissions as well
asupstream and downstream Scope 3
emissions as defined by the GHG Protocol
Corporate Value Chain (Scope 3) Accounting
and Reporting Standard. Disclosure of our
voluntary Scope 3 emissions includes
business travel (flights
5
, rail and taxis – where
information is available through third-party
preferred travel partners), emissions relating
to our Riverbank House sub-tenants,
emissions relating to the global office
operations over which we do not have
operational control, seed investments and
fund product investments held for deferred
compensation awards, waste and water.
Scope 3 disclosures utilise reporting from
third-party suppliers (or estimates where
such information does not exist). Energy
consumption has been calculated in kilowatt
hours (kWh). Waste consumption from
business activities including paper/
cardboard, residual waste/domestic-type
waste, electronic scrap, cafeteria (food)
waste, etc. is measured in tonnes and is
converted into tCO
2
e using UK Government
GHG conversion factors.
Water for air conditioning, data centre
cooling systems, kitchens/cafes, indoor
plants, sanitary installations and external
grounds/gardens is measured in cubic
metres and is converted into tCO
2
e using
UKGovernment GHG conversion factors.
The carbon disclosure of our assets under
management, calculated in line with the
TCFD recommendations, can be read
onpage 59. This year, we have chosen to
include the absolute carbon emissions of our
seed capital and fund product investments
held for deferred compensation awards
using the same methodology. We aim to
provide data wherever possible, but have
notbeen able to achieve full coverage.
In line with GHG Protocol guidance, we
havealso estimated our carbon emissions
associated with staff commuting. In doing
so, we have used the GHG Protocol
‘average-data method’, which involves
estimating emissions from employee
commuting based on average data on
commuting patterns. We have used
Londondata as a proxy for our global
workforce and in 2021 we estimate our
employee commuting carbon emissions
tobe approximately 180 tCO
2
e. There are
inherent assumptions in the average-data
method and, with the impact of pandemic
restrictions in 2021 on global commuting
2019
Baseline
2021
Target
2021
Result
2022
Target
Scope 1:
Reduce scope 1 natural gas and fuel
emissions by 30%
1,13 6
tCO
2
e
908
tCO
2
e
641
tCO
2
e
Met
795
tCO
2
e
Scope 2 & 3 (upstream) leased assets
location-based:
Reduce global energy usage by 10% per year
4,253
tCO
2
e
3,409
tCO
2
e
2,515
tCO
2
e
Met
2,983
tCO
2
e
Scope 2 & 3 (upstream) leased assets
market-based:
Reduce emissions by50%
464
tCO
2
e
309
tCO
2
e
397
tCO
2
e
Not met
232
tCO
2
e
Scope 3 water:
Reduce baseline usage2%per year 27, 2 21m
3
26,143m
3
22,245m
3
Met 25,620m
3
patterns, we acknowledge the limitations
ofthis 2021 estimate. We will continue to
monitor our commuting patterns and will
aimto enhance the accuracy of our
disclosure in this area in the future as
moredata becomes available.
We intend to work with our commercial
management team to understand better
thecarbon impact of our procurement of
goods and services, establish materiality
andconsider our approach to disclosure
indue course.
Performance against targets
We strive to make our contribution to the
Paris Agreement targets. In 2019 we set
firmwide targets in line with the Science
Based Targets Initiative methodology to
limitthe global temperature increase to a
maximum of 1.5°C. We exceeded our targets
in 2020, in part due to COVID-19, and expect
emissions to increase as employees return
tothe office (reflected in our future targets).
We review our targets regularly, have two
carbon-related non-financial KPIs which
arein turn linked to executive compensation,
and we have linked our revolving credit
facility to ESG-based KPIs, thereby
embedding our environment-related
commitments throughout our organisation.
The table below shows that in 2021 we
havemet and exceeded our targets in all
categories, with the exception of Scope 2
and3 (upstream) leased assets market-
based emissions. In this category, our 2021
emissions were 88 tCO
2
e greater than the
2021 target. We were unable to reduce
emissions by 50% in 2021 largely due to the
drop in emissions we saw in 2020 relating to
our workforce working remotely due to
COVID-19. We also expanded our emissions
data in 2021 to include one more non-UK
operation. We are committed to obtaining
greater transparency of emissions data over
time and we will continue to review this target
(and all other targets) regularly as our
emissions data transparency continues
toimprove.
4 For further details of our methodology, see our
Environmental Reporting and Methodology Guidelines.
5 Underlying air travel data represents journeys booked (as
opposed to taken). Man Group assumes that all journeys
booked and accounted for in this metric, are then taken.
54
Strategic report
Man Group plc | Annual Report 2021
Responsible business continued
Investing responsibly
Man Group strives to be a leader in integrating RI
concepts across asset classes and investment
strategies.
We do not adhere to a ‘one size fits all’ approach,
however our firmwide strategy and framework
ensures consistency, transparency, credibility,
and collaboration across our business.
By blending intuition and data science across
ourdifferent businesses, we aim to build insights
that help deliver better outcomes for our clients.
There are four key
components to Man
Group’s expertise in RI:
1 Broad application
and integration of RI
2 Data-driven
approach to ESG
analysis
3 Active stewardship
and engagement
4 Education
visit our website to find out more
55
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
We take an intelligence-driven approach
toESG tocreate responsible investment-
focused solutions for our clients. Each of our
investment teams designs differentiated RI
policies that address responsible investment
in a way that is aligned to their investment
strategies and philosophies. OurESG
implementation continues to be driven by
ourcore beliefs (see image). Ourapproach
toresponsible investment hasevolved
significantly in recent years, moving from
anexclusions-based approach to innovative
implementations of ESG acrossour diverse
product offering. Our fundamental
knowledge of ESG factors combined with
aquant-based approach todata allows
eachof our investment teams to integrate
and assess the sustainability profile
ofcompanies.
As at 31 December 2021, $55.2 billion
ofMan Group’s total AUM is invested in
strategies that integrate ESG into the
investment process. ESG-integrated AUM
Systematic
• Systematic restrictions
embedded for all single
name issuers
• Research-driven culture
to assess emerging best
practices including
ESG-friendly futures
Discretionary
• ESG integration based
on discretion of each PM
• Seeking sustainable
growth, purpose-led
companies, ESG leaders
and SDG themes
• Engagement –
constructive relationships
with management
todrive change
Customised
• Bespoke ESG integration
• External manager
framework. ESG due
diligence on all managers
• Engagement with
sub-managers to
promote the inclusion
ofESG factors
• Consistent ESG reporting
Private markets
• UK affordable housing
(impact investing)
• Increase supply of
sustainable, affordable,
mixed-tenure housing
forrent and sale
• Aim to deliver innovative
energy-efficient
build-to-rent housing
across the southern
USstates
• 100% proxy voting goal
• No banned weapons
• ManUniversal RI
Restriction List
• Consolidated ESG and
stewardship reporting
ESG Philosophy
Core beliefs
Solutions
• Corporate engagement through proactive
discussions with companies on ESG issues
Investment engines
• Leverage the unique RI and
ESGexpertise across all of
ManGroup’s investment engines
• Central platform for building
customised ESG portfolio
• Work in partnership with
ManGroup’s investment engines
to facilitate ESG investment ideas
• Creation of customised ESG tilts,
screens and ESG reporting
Fundamental quant
• Quantitative ESG
investing approach
systematically coded into
the investment process
• Proprietary ESG model
integration
• Alpha models in 90%
of AUM
• Advanced quantitative
carbon budgeting in
RI strategies
1
Broad application
andintegration of RI
isdefined as the portion of our total AUM
that integrates explicit ESG criteria into the
investment process. To provide a consistent
framework around Man Group’s calculation
of ESG-integrated AUM, we base our
calculation on the Global Sustainable
Investment Alliance (GSIA) categories and
definitions. Man Group’s ESG-integrated
AUM is based onthe GSIA’s ‘ESG
Integration’ sustainable investment category,
which is defined as the‘systematic and
explicit inclusion by investment managers
ofenvironmental, social and governance
factors into financial analysis’. The ESG
integration category isrelevant and
applicable to Man Group’s investment
process and its use has been approved
byour RIC. Using the ESG Integration
approach, our calculation methodology
identifies all relevant funds and mandates
forwhich explicit environment, social and
governance criteria are used in asset
selection (discretionary) or a dedicated
environment, social and governance model
is incorporated in the investment process
(systematic). For multi-strategy/multi-asset
portfolios, only the portion of a fund or
mandate for which ESG is factored into the
investment process is included
1
and the
investment process must integrate all three
elements of environment, social and
governance pillars. The identification
ofManGroup’s ESG-integrated AUM is
undertaken by our Responsible Investment
team, reviewed by the relevant investment
teams, and subject to formal oversight
bycontrol functions. This rigorous process
and the resulting ESG-integrated AUM figure
is overseen by the RIC. We have used this
approach consistently since we started
publishing Man Group’s ESG-integrated
AUM. While we believe it to be a helpful
andprudent framework for calculating
ourESG-integrated AUM, we continue to
monitor the development of market practice.
1 For example, some of our multi-strategy/multi-asset portfolios
may only incorporate ESG factors in certain sleeves or asset
classes. For such strategies/portfolios, we only include the
portion of the strategies/portfolios for which we integrate
ESGfactors into the investment process.
56
Strategic report
Man Group plc | Annual Report 2021
One of our greatest ESG
strengths arises from our
understanding of data and
quantitative capabilities.
With over 570 quantitative
researchers and
technologists and 35years
of experience inquantitative
investing, including many
years spent interrogating
ESG data sets, we are in
aprime position toadd
valueto clients.
ESG data has matured over the last
decadeand we are entering a phase
wherethe data has both a long-enough
history and broad-enough coverage to
support quantitative analysis. Challenges
remain, however, when interpreting and
analysing data. Data is frequently qualitative
or subjective and often incomplete. There
arefew reporting standards, categories
anddefinitions vary widely and there has
been arapid change in the attitudes of how
companies and investors prioritise these
issues. The challenge for an investment
manager is how to convert this unstructured
data into useful insights. Our combination
ofquant and data science expertise coupled
with our extensive experience in fundamental
analysis allows us to give meaning to the
ever-increasing amounts of ESG data.
Man Group actively works to cultivate
adiversity of approaches to identify,
assessand integrate ESG-related risks
andopportunities. We strive to provide our
investment teams with as much high-quality
ESG data and insight as possible. The
ManGroup ESG Analytics Tool is a
proprietary, dashboard-style tool that
enables investment teams and our clients
tomonitor non-financial risks at a portfolio
level and on a single-stock basis. The tool
embeds Man Group’s proprietary ESG score
alongside data sets from leading ESG data
providers; this ensures we can measure
andmanage ESG opportunities and risks on
a comprehensive basis across asset classes
and provide our investment teams with
aninnovative and standardised approach.
Toidentify and address climate-specific
risksand opportunities, the tool provides
ourinvestment teams with access to a
number of key metrics (e.g. WACI, impact
ratio), which we continually review and
update. Our investment teams use these
tomanage climate-related considerations
asrelevant to their strategies and the clients
invested in them.
Investing responsibly cont.
Responsible business continued
2
A data-driven
approach
Our proprietary ESG Analytics Tool dashboard
57
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Man Group plc | Annual Report 2021
As stewards of our clients’
capital, we believe that
wehave an obligation to
manage their assets actively
and responsibly to unlock
sustainable long-term value.
We have developed a firmwide stewardship
approach that provides stewardship
information and recommendations to all
strategies while at the same time receiving
stewardship preferences from Man Group’s
discretionary strategies where company
engagement is a key feature. Our objective
isto coordinate shareholdings across Man
Group, identify and work to reconcile
differences in voting preferences, support
well-developed arguments for stewardship
and signal this across the firm. In this way,
Man Group’s work creates powerful benefits
for quantitative strategies who may lend their
shareholding support to engagement, voting
and even co-filing opportunities.
Proxy voting
Man Group’s dedicated Stewardship team
works with a third-party proxy adviser who
provides research and recommendations
onthe basis of the firm’s voting preferences.
We use this as basis for our decision and
complement the adviser’s recommendations
with our own research. Our custom ESG
Voting Policy uses the Glass Lewis standard
policy as the base but applies a number
ofadditional guidelines focused on ESG
standards to create our enhanced proxy
voting policy. We recognise the importance
of using our voting rights to encourage
sound corporate governance practices
atour investee companies.
Engagement
Engagement activity is consolidated at the
firmwide level to leverage Man Group’s scale
and aggregate ownership in securities to
promote best practices related to ESG
issues and affect meaningful, positive
outcomes.
ManGroup’s engagement activity spans
threedifferent dimensions:
• Systematic engagement, led by Man
Group’s Stewardship team, which involves
direct engagements with companies on
ESG themes.
• Collaborative engagement, also
managedat the firm level by Man Group’s
Stewardship team, which involves working
alongside a group of institutional investors
to engage with companies on ESG issues.
Our active participation in RI and ESG-
related collaborative initiatives, such as
theClimate Action 100+ initiative and the
Investor Forum, enhances our ability to
influence change.
• Fund-level engagement, which is
conducted at the investment team level,
particularly for discretionary investment
strategies. In this area, Man Group
discharges its stewardship responsibilities
primarily through company interactions
and active engagement undertaken by
investment teams.
During 2021, the Stewardship team
established dialogue with 384 companies
across 43 different countries on ESG
issues(89 direct engagements and 298
engagements in collaboration with other
shareholders). Climate change, diversity,
compensation, stakeholder relations and
labour relations were key areas of discussion.
Our increased focus on firmwide stewardship
has resulted in significant achievements:
• Man Group was part of the first wave
ofsignatories to the inaugural UK
Stewardship Code 2020.
• Man Group was ranked in the top 10
byShareAction, in their ‘Voting Matters
2021’ report, supporting at least 98% of
shareholder resolutions on environmental
issues between September 2020 and
June 2021. Most notably, Man Group
ranked #4 among both signatories of the
Net Zero Asset Managers initiative and
members of Climate Action 100+.
• Our stewardship efforts culminated in our
co-filing of the HSBC climate shareholder
resolution, the first such filing in Man
Group’s history.
3
Stewardship
43
different
countries
384
companies in
89
direct
engagements
298
engagements
alongside other
shareholders
During 2021, the
Stewardship team
established dialogue
with
58
Strategic report
Man Group plc | Annual Report 2021
A core part of Man Group’s
commitment to ESG involves
actively promoting
education around
responsible investment,
particularly in alternatives,
and leading the way in
setting standards for hedge
funds through participation
in industry-wide initiatives.
ManGroup is proud to be involved with
many industry groups that promote
responsible investment practices.
ManGroup is a signatory to the Institutional
Investors Group on Climate Change
(IIGCC), the International Sustainability
Standards Board (formerly Sustainability
Accounting Standards Board, SASB)
andtheStandards Board for Alternative
Investments (SBAI). These organisations
aim to develop and reinforce frameworks
forbetter implementation and adherence
ofESG, as well as governance for the
alternative asset management industry.
In addition to our active participation
inindustry initiatives, we also seek to
produce high-quality research through the
Man Institute and thought leadership around
pressing ESG issues. Highlights during the
year include:
• Significant contributions to the CFA’s
Investing in ESG Certificate course and
theCFA’s Climate Change Analysis in the
Investment Process.
• Publishing proprietary research such as
‘Climate Investment: Positioning Portfolios
for a Warmer World’, which was awarded
best Megatrends Paper in the Savvy
Investor and explains the science of
modelling climate change, forecasts the
likely long-term impact of global warming
on economies, introduces a climate-
adjusted understanding of corporate
valuations and provides practical
applications of climate-positive strategies.
• Production of an award-winning podcast
series, A Sustainable Future, featuring
commentary from asset owners,
managers, consultants, academics and
policymakers on pressing ESG issues.
Case study:
A focus on climate
Developing and researching innovative
investment solutions which support a
transition to climate neutrality is a key
areaof focus for Man Group. In recent
years we have significantly advanced
ourunderstanding of climate risks and
opportunities through ongoing research
and initiatives in this area.
Supporting the transition to a low-
carbon economy, managing risks and
opportunities effectively
We are investing significantly to enhance
our approach to managing climate
changerisk and believe that our data-
driven culture puts us in a prime position to
assist our clients in reducing the systemic
risk of climate change while identifying
opportunities in the transition towards a
low-carbon economy. We have onboarded
multiple climate-related data sources and
increased the breadth of investment
solutions available to our clients.
We have leveraged our climate expertise
and quant research capabilities to develop
aproprietary climate model, which seeks
toidentify both the risk and opportunities
ofclimate change for relevant investment
strategies.
There are four underlying components that
drive the model:
1. Physical cost: captures the impact cost
on firms from changes in climate that are
already occurring and are projected to
continue in the years ahead, under a range
ofdifferent GHG emission scenarios. We have
operationalised the latest results from global
climate modelling centres to assess various
aspects of physical climate risks.
2. Transition cost: captures the risk to
businesses due to policy actions, technology
changes, investors’ responses, reputational
considerations and legal actions as the
governments around the world strive to
reduce the impact of climate change.
3. Stranded assets cost: in order to meet
the 2°C target as agreed in Paris Agreement,
a portion of fossil fuel reserves must remain
unextracted. This and similar examples could
lead firms to write-down the value of certain
assets on their balance sheets.
4. Opportunity: capture the opportunity
from climate change, with a focus on firms
that target innovation in themes such as
renewable energy.
We are investing significantly to enhance our
approach to managing climate change risk
and believe that our data-driven culture puts
us in a prime position to assist our clients in
reducing the systemic risk of climate change
while identifying opportunities for our
existing strategies and to develop new
products in the transition towards a
low-carbon economy.
We have also made substantial
progress in our climate stewardship
activities. We supported 93% of
environment-focused shareholder
resolutions during 2021. Our
stewardship efforts culminated in
ourco-filing of the HSBC climate
shareholder resolution, the first such
filing in Man Group’s history. The
proposal led the HSBC board to issue
its own climate proposal, reflecting
allthe co-filing party’s requests –
demonstrating the power of
collaborative engagement.
Investing responsibly cont.
Responsible business continued
4
Education
59
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
In line with the TCFD’s recommendations,
wehave disclosed GHG emissions for our
AUM and the WACI for our key investment
strategies.
WACI measures a portfolio’s exposure
tocarbon-intensive companies, expressed
intons of CO
2
emissions per million dollars
ofrevenue from companies in the portfolio.
In contrast to total GHG emissions for AUM,
WACI is not impacted by changes in AUM.
Methodology
Data sets
We rely on external and internal data for
ouranalysis. Our primary source of external
data is S&P Trucost, which provides carbon
emission data by issuer. The data includes
Scope 1 and Scope 2 GHG emissions,
reported annually by companies or in some
cases estimated by S&P Trucost, as well
asrevenue data for the purposes of the
calculation outlined above.
It is important to highlight this data has
several limitations. It is primarily available
forsingle name corporate instruments,
whichis only relevant to a portion of our
AUM. Providers also prioritise data related
tocorporate equity, whereas corporate
credit coverage is generally lower and certain
markets such as small and mid-cap issuers
either have poor company disclosures or
limited coverage. Lastly, there is often a lag
inthe data driven by the timing of company
reporting or the provider’s data collection
that presents a lack in continuity. We
recommend our metrics are read with
theselimitations in mind.
Our internal data is used primarily for AUM
and underlying exposures.
AUM in scope
The firm’s total AUM as at 31 December
2021 was $148.6 billion. We exclude our
investments in private markets and CLOs
from the analysis due to limited data
availability. We also exclude AUM where
theinvestment decision is ultimately
madebya third party (e.g. multi-manager
solutions and emulation mandates).
The AUM in scope for the purposes of
calculating GHG emissions and WACI is
$120.5 billion, or 81% of the firm’s total.
Our approach
We use the total exposure of all long
positions related to the $120.5 billion of
AUMin scope for our WACI calculation.
Wethink total exposure is most appropriate
as it captures any leverage used in the
investment strategy or, conversely, any under
investment. This is particularly relevant to
capture the underlying exposures of several
of our alternative investment strategies more
accurately. Any financial instruments (e.g.
derivatives) are also included where possible
based on their underlying exposure. While
there are different views within the industry
as to the application of short positions in
theemissions context, we believe long
exposures through physical securities are
the most direct representation of ownership
and engagement rights with companies.
Wedo not decompose any holdings in
indices for the same reason. Our findings
aretherefore presented showing coverage
as a percentage of total exposure of all long
positions weighted by the proportion of total
AUM they represent, without netting off
exposure from short positions, or
decomposing indices into their underlying
constituents. We acknowledge that a
consensus around methodologies will
develop over time, and we will seek to
incorporate this into our analysis in the future.
Metrics
We have used carbon emission data by
issuer for total exposure of all long positions
at the strategy level at 31 December 2021
and 31 December 2020 to measure total
emissions from our AUM and calculate WACI
by strategy, as well as to show a year-on-
year trend in line with the TCFD’s
recommendations.
Absolute emissions
(million tCO
2
e) Data Coverage
December
2021 Coverage
December
2020
Total assets under management
inscope
Scope 1 & 2 38% 12.0 41% 13.9
Our findings show that total emissions from AUM in scope have reduced over the course of
2021. While long exposure coverage has decreased marginally, our long emissions (absolute)
have decreased from 13.9 million tCO
2
e to 12.0 million tCO
2
e. Coverage remains relatively low
considering the range of instruments we trade, and is also influenced by other factors (e.g.
total underlying exposure, which can vary significantly and change frequently).
As stewards of capital and long-term investors, we
acknowledge our responsibility to monitor and address
climate change risks and opportunities through our own
investment decisions, as well as through our influence
oninvestee companies.
60
Strategic report
Man Group plc | Annual Report 2021
Investing responsibly cont.
Responsible business continued
WACI (tCO
2
e/$m revenue) Data Coverage
December
2021 Coverage
December
2020
AHL Alpha Scope 1 & 2 <10% 37 <10% 15
AHL Dimension Scope 1 & 2 <10% 104 <10% 86
AHL Evolution Scope 1 & 2 <10% 117 <10% 45
AHL Diversified Scope 1 & 2 <10% 55 <10% 23
GLG Alpha Select Scope 1 & 2 69% 292 72% 316
GLG Event Driven Scope 1 & 2 28% 9 53% 140
GLG Global Credit Multi Strategy Scope 1 & 2 32% 105 49% 93
AHL TargetRisk Scope 1 & 2 <10% 0 <10% 0
Alternative Risk Premia Scope 1 & 2 53% 363 11% 160
GLG Global EM Debt Total Return Scope 1 & 2 <10% 0 <10% 0
FRM Diversified II n/a n/a n/a n/a n/a
Numeric Global Core Scope 1 & 2 92% 111 95% 93
Numeric Europe Core Scope 1 & 2 94% 232 95% 169
Numeric EM Core Scope 1 & 2 83% 270 91% 367
GLG Continental European Growth Scope 1 & 2 86% 38 77% 43
GLG Japan CoreAlpha Scope 1 & 2 99% 115 100% 322
GLG Undervalued Assets Scope 1 & 2 90% 149 90% 156
GLG High Yield Opportunities Scope 1 & 2 19% 77 29% 248
The table provides a WACI for the key
strategies from across our business, aligned
to the strategies for which we disclose
performance data in our 2021 year-end
press release
1
.
As illustrated in the table, coverage is
significantly higher for long-only strategies
asmost of theholdings are in single name
equities, whereas coverage for alternative
strategies, particularly our quantitative
strategies, is lower as allocations to
corporate instruments are typically small
orvia index exposures. FRM Diversified II
ispart of our multi-manager offering and as
the ultimate investment decision lies with
athird-party manager, these are excluded
from this analysis. Although our analysis
isfocused on WACI, we continue to
considerwhich other carbon footprinting
andexposure metrics may be useful for
decision-making.
While our metrics reflect progress in
providing climate-related information,
we recognise this is an area that will
evolve rapidly in the future. We believe
itis important to continue to refine our
analysis and disclosures as both data
availability and quality improve, and
toincorporate methodologies for
instruments that are relatively less
covered today as they develop over
time. Our ultimate aim is to support
ourclients and shareholders transition
toalow-carbon economy by providing
transparency and incorporating best
practices into our carbon reporting
asthey emerge.
1 The analysis has been completed for the lead share class
ofeach strategy.
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Man Group plc | Annual Report 2021
We have made valuable enhancements to
our climate-related disclosures in 2021. We
have included disclosures consistent with
the TCFD’s recommendations, providing
further transparency on our approach to
managing climate-related risks and
opportunities across our business.
As a company, and as an asset manager, we have provided
information on all four pillars and 11 recommendations in our Annual
Report (references below), incorporating the supplemental guidance
provided for asset managers by the TCFD.
According to our own assessment, we comply with the majority
ofthe recommendations; when we don’t, we have explained the
reasons why we believe they are not applicable to our business,
orwhy improvements are still required.
Our policies and practices
TCFD
Disclosure
recommendation
Man Group assessment / 2021 Annual Report reference
Governance
The Board’s oversight of climate-related risks and opportunities. Compliant: We describe details of the Board’s oversight in
theBoard effectiveness section (page 86) and the Responsible
business section (page 47).
Management’s role in assessing and managing climate-related
risks and opportunities.
Compliant: We outline management’s role in assessing
climate-related matters and our governance structure in the
Responsible business section (page 47) and the Board
effectiveness section (page 86). We describe our climate-related
strategy in the Strategy section (page 15).
Strategy
Climate-related risks and opportunities the organisation
hasidentified over the short, medium and long term.
Compliant: We outline the climate-related risks and opportunities
over different time horizons in the climate change risk management
and strategy call-out box of the Risk management section (page 30).
The impact of climate-related risks and opportunities on
theorganisation’s business, strategy and financial planning.
Partially compliant: We discuss the impacts on our business
from climate-related risks and opportunities in the Risk
management section (page 30 and 37). We describe our
climate-related strategy in the Strategy section (page 15) and
howclimate matters are factored into decision-making in the CEO
andCFO reviews (page 18 and page 25, respectively). We assess
climate-related scenarios in the Risk management section (pages
30, 32 and 37) and outline our pathway to carbon net zero in the
Responsible business section (page 50).
Explanation: We have not reflected a holistic picture of the
interdependencies among the factors that affect our ability to
create value over time, and recognise further progress is required
inthis area.
The resilience of the organisation’s strategy taking into
consideration different climate-related scenarios, including
a 2°C orlower scenario
1
.
Compliant: We outline the resilience of our business to future
climate shifts inthe Risk management section (page 30 and 37)
and in the Responsible business section (page 53) under
Performance against targets.
Additional recommendations included in the supplemental
guidance for asset managers.
Compliant: We address industry-specific considerations within
the Risk management section (page 30) and in our case study
onclimate in the Responsible business section (page 58).
Wediscuss how climate-related matters impact our financial
statements in the CFO review (page 25) and Note 3 to the
Groupfinancial statements.
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Disclosure
recommendation
Man Group assessment / 2021 Annual Report reference
Risk management
The organisation’s process for identifying and assessing
climate-related risks.
Compliant: We outline our processes for identifying and assessing
climate-related risks in the Risk management section (page 30 and
33) and in the Responsible business section (page 48).
The organisation’s process for managing climate-related risks. Compliant: We outline our processes for managing climate-
related risks in the Risk management section (page 30 and 37).
How processes for identifying, assessing and managing
climate-related risks are integrated into the organisation’s overall
risk management.
Compliant: We outline how our climate-related risk management
framework processes are integrated into our overall risk
management in the Risk management section (page 37).
Additional recommendations included in the supplemental
guidance for asset managers.
Compliant: We address industry-specific considerations in the
Responsible business section (page 56 to 58). This includes how
we identify, assess and manage climate-related risks for each
investment strategy, aswell as our approach to stewardship
andactive engagement.
Metrics and targets
The metrics used by the organisation to assess climate-related
risks and opportunities in line with its strategy and risk
management process.
Partially compliant: The metrics and targets we use to assess
climate-related risks and opportunities related to our operations
areshown in the Responsible business section (page 52 and 53).
We describe how climate targets are linked to remuneration policies
in the Directors’ Remuneration report (page 104).
Explanation: We currently do not consider internal carbon prices
or climate-related opportunity metrics related to our business
meaningful and applicable, however we will continue to assess
their relevance in the future.
The targets used by the organisation to manage climate-related
risks and opportunities and performance against targets.
Compliant: The targets we use to manage climate-related risks
and opportunities related to our operations are shown in the
Responsible business section (page 50 and 53).
Scope 1, 2 and 3 greenhouse gas (GHG) emissions and
relatedrisks.
Compliant: The emissions metrics related to our operations are
shown in the Responsible business section (page 52 and 53).
Additional recommendations included in the supplemental
guidance for asset managers.
Partially compliant: The metrics and targets we use to assess,
monitor and manage climate related risks and opportunities related
to our investment strategies are shown in the Risk management
section (page 30 and 32) and Responsible business section
(page56, 59 and 60). This includes GHG emissions from our
assets under management and the weighted average carbon
intensity for ourkey strategies.
Explanation: We have only provided the metrics we consider
meaningful at this time and will review and update these as
necessary in the future.
Our policies and practices continued
TCFD cont.
1 We set firmwide targets in line with the Paris Agreement, an international treaty on climate change adopted in December 2015. The goal of the agreement is to limit global warming to below 2°c,
with a preference of 1.5°c, compared to pre-industrial levels, and to reach global GHG peak emissions in order to achieve a climate neutral world by 2050.
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Man Group plc | Annual Report 2021
Non-financial information statement
Our policies
and standards
Due diligence
and governance
Impact and outcomes of
our policies and standards
Related
principal risks
Environment
Environmental
Sustainability Policy
Statement
Describes our commitment
toconducting our business
responsibly, minimising the
environmental and climate-
related impact of our activities.
We track progress through environmental
data compilation systems ensuring accurate
reporting of measures. Our climate change
strategy is set by the Board. For further
information please see page 15.
On behalf of the Board, the Corporate
Socialand Responsibility Committee
(CSRC)oversees the development and
implementation of our environmental
processes and procedures.
Our achievements in relation to our impact
onthe environment can be found on pages
46 to 53.
Our greenhouse gas emissions data can
befound on page 52.
We continue to work towards becoming
carbon neutral by 2030. For further
information on this objective see page 50.
Climate change risk management
andstrategy is discussed on pages 30
and 48 and as a principal risk on page 37.
Signatory of the Task
Force on Climate-related
Financial Disclosures
(TCFD) and the Net Zero
Asset Managers initiative
The Board oversees progress on the
development of our climate-related financial
disclosures and is kept apprised of
climate-related risk via the Audit and
RiskCommittee.
For further information on TCFD see pages
61 to 62.
Man Group is a signatory to the Net Zero
Asset Managers initiative. We pledge to
reduce greenhouse gas emissions to net
zero ininvestment portfolios by 2050.
Climate change risk management and
strategy is discussed on page 30 and 48
and as a principal risk on page 37.
Social Matters
RI Policy and RI Fund
Framework
Outlines our recognition and
support for the development
and integration of RI modalities
across the firm.
Our Responsible Investment Committee
oversees the implementation of our RI policy
and processes. The Board also receives
regular updates from the RI leadership team.
We review our RI policies on an annual basis.
The diversified nature of our multi-strategy
businesses means that no ESG framework is
universally applied. Accordingly, we apply the
norms and best practices of RI that are most
appropriate for the strategies and asset
classes we manage.
We integrate ESG considerations in our
investment decision-making and monitoring
across strategies in line with the policy and
processes overseen by the Responsible
Investment Committee.
We have increased ESG-integrated AUM
from $42.7 billion to $55.2 billion and our ESG
analytics tool supports investment
decision-making and risk management. For
further information on how this has benefited
our RIpolicy objectives see pages 55 and 56.
RI is linked to our investment
performance and reputational principal
risks on page 34 and page 37.
Engagement Policy
Outlines our approach to
shareholder engagement and
proxy voting, as stewards of
our clients’ capital.
The Engagement Policy was formalised in
2021 by the firm’s appointed investment
managers for our investment engines. Our
Stewardship team oversees the proxy voting
process and leads on engagement at both
asystematic and collaborative level; however,
fund-level engagement is delegated to the
investment teams.
The Engagement Policy sits alongside our
voting framework and encourages
collaborative engagement with investor
groups and initiatives and promotes
fund-level engagement.
As part of our commitment to stewardship,
our proxy voting policy has been enhanced
toan ESG-oriented voting preference.
Ourstewardship achievements can be
foundon page 57.
Man Group is a signatory to the UK
Stewardship Code.
Not linked to our principal risks.
ManKind Initiative
The Company’s volunteering
programme which aims to
encourage employee
volunteering.
We prioritise giving back to our communities
and this takes place through various
channels. For further information on our
initiatives see page 43.
Senior management actively communicate
with staff throughout the year to encourage
participation in volunteering activities.
Not linked to our principal risks.
In the interests of good governance, Man
Group has chosen to comply with sections
414CA(1) and 414CB(1) of the UK Companies
Act 2006, although we are not required
todoso as a Jersey incorporated Company.
The table below constitutes our non-financial information statement
and we have included cross-references to other sections of this
report where appropriate. For a description of our business model
please refer to pages 10 and 11.
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Our policies
and standards
Due diligence
and governance
Impact and outcomes of
our policies and standards
Related
principal risks
Global Banned Weapons
Policy
Sets out our approach to
Global Banned Weapons
investments.
The Financial Crime Compliance team
maintains and oversees this policy and we
have developed internal systems and controls
to assist the firm in complying with the
restrictions.
This includes utilising ISS ESG’s Controversial
Weapons Research service to monitor and
identify companies involved in activity
contrary to these conventions. Man Group
utilises this research, along with other
information, to make decisions regarding
investing in, or setting restrictions or outright
prohibitions on, companies with a confirmed
direct or indirect involvement in prohibited
activities such as those linked to Banned
Weapons.
Man Group has established a firmwide zero
tolerance threshold to limit the firm’s
exposure to Banned Weapons. The funds
wemanage are not permitted to directly
invest in or finance companies, which our
independent third-party specialist screening
provider believes are involved in the
manufacture, supply or distribution of
weapons banned by international convention.
RI is linked to our investment
performance and reputational principal
risks on page 34 and page 37.
Legal and regulatory risk is a principal risk
on page 37.
Well-being and inclusion
– Global Inclusion
Statement
We are committed to looking after our people
and have a global well-being programme
inplace. This includes guidance given by
newsletters, webinars and events (onsite
andvirtual).
We have a number of policies and offerings
including our Gender Neutral Parental Leave,
Employee Assistance Programme, Tenure
Award Leave, and Flexible Working options.
For further information see the ‘People and
culture’ section on pages 38 to 43.
Not linked to our principal risks.
Anti-Bribery and Corruption
Anti-Bribery and
Corruption Policy
For further information on our controls and
procedures see page 37.
For further information on our Anti-Bribery
and Corruption Policy please see page 66.
Failure to implement effective controls
inrelation to anti-bribery and corruption is
a principal operational risk on page 37.
Employees
Global Code of Ethics and
Code of Conduct
For further information please see page 66. For further information please see page 66. Employee conduct is linked to our
operational and reputational principal
risks on pages 36 and 37.
Health and Safety Policy/
Statement
Describes our commitment
toensuring the health, safety
and welfare of our employees
by providing safe working
environments and ensuring
Man Group’s statutory duties
in respect of health and safety
are met at all times.
We track progress through a number of
health and safety systems ensuring accurate
reporting of accidents, incidents and near
misses and prevention measures.
On behalf of the Board, the Health and Safety
Committee (HSC) oversees the development
and implementation of our health and safety
processes and procedures. Our Board
maintains overall responsibility for the health
and safety and welfare of employees.
We aim to minimise health and safety risks
and we undertake an ongoing programme
ofhealth and safety risk assessments and
improvements throughout the year.
We evaluate the safety training needs of
employees and ensure that they receive
appropriate training including induction
safetytraining.
Statutory and regulatory risk assessments
are carried out annually and observations
actioned and closed out in a timely manner.
Employee well-being is linked to our
operational principal risks on page 37.
Our policies and practices continued
Non-financial information statement cont.
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Our policies
and standards
Due diligence
and governance
Impact and outcomes of
our policies and standards
Related
principal risks
Diversity, Equity and
Inclusion Initiatives, Global
Inclusion Statement and
diversity focused
recruitment policy
Governs our approach
todiversity.
Our diversity, equity and inclusion initiatives
support Man Group’s commitment to
improving diversity across the Company and
within the finance industry more generally.
The initiatives are supported at a senior level
by the Senior Executive Committee and our
Drive (DE&I) Steering Committee (see pages
41 to 42).
We link diversity targets to our revolving credit
facility and executive director variable pay. For
further information see page 103 to 104.
We achieved gender parity on our Board
during 2020 and during 2021 have appointed
two of our female NEDs to be Chairs of the
Audit and Risk Committee and Remuneration
Committee. Our Board also meets the ethnic
diversity targets set by the Parker Review.
Further information on our diversity, equity
and inclusion initiatives can be found within
our DE&I report on the Man Group website.
During 2021 the Board approved an updated
Board Diversity policy. See page 100 to 101
for further information.
Not linked to our principal risks.
‘Paving the Way’ Initiative
Our initiatives focus on
attracting diverse talent into
the Company and the industry.
We actively encourage, support and progress
initiatives that help assist in addressing social
barriers that have historically prevented
access to our industry. Our initiatives are
overseen by the Drive (DE&I) Steering
Committee and the Board and senior
management are updated on progress.
As part of the ‘Paving the Way’ initiative we
have partnered with various organisations to
address pipeline recruitment issues. For
more information see the corporate social
responsibility booklet on the Man Group
website.
Not linked to our principal risks.
Global Talent function
Ensures we nurture our current
talent and attract new talent.
The Senior ExCo discusses talent throughout
the year and works closely with the Talent
team and HR leaders. For further information
see our CSR booklet, our website and page
40.
We have a connected talent management
strategy. Group-wide talent review and
succession planning practices identify our
talent development priorities. For further
information see the ‘People and culture’
section on pages 38 to 43.
Key person risk is a principal business
risk on page 34.
Human Rights
Human Rights Statement
and Modern Slavery
Transparency Statement
Sets out our high standards
and how these define and
inform our operations and
prevent modern slavery from
occurring within the business
and supply chain.
Man Group is committed to high standards
of business conduct and this extends to the
commitment to the protection of human
rights throughout the business.
The Board reviews and agrees the Modern
Slavery and Transparency Statement on an
annual basis.
Our Human Rights Statement sits alongside
our Global Inclusion Statement and our
Modern Slavery Transparency Statement,
showing our commitment to the promotion
of human rights within the workplace, our
operations and how we operate our
business.
There are no known instances of modern
slavery within our business.
Negative publicity is a principal
reputational risk on page 37. Legal and
regulatory risk is a principal risk on page
37.
Other
Service Provider
Management Policy
Ensures our fund service
providers are appropriately
selected, managed and
overseen and that any issues
are identified and escalated.
An ongoing programme of due diligence is
conducted and guidance is provided on our
expectations of their conduct and operation.
Through our current programme we are able
to partner closely with our fund service
providers and ensure that we have detailed
oversight of their service provision and that
any issues are promptly identified, escalated
and resolved.
External process failure by one of our
service providers is a principal operational
risk on page 36.
Supplier Code of Conduct
Sets out our business conduct
expectations of our suppliers.
For further information see page 67. For further information see page 67. Negative publicity is a principal
reputational risk on page 37.
Non-financial KPIs The Board and senior management review
the appropriateness and progress against
non-financial KPIs.
This year, the Board approved an additional
non-financial KPI reflecting Man Group’s
commitment to investing responsibly.
Negative publicity is a principal
reputational risk on page 37.
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Our policies and practices are designed to
foster a business environment where each
and every one of our employees upholds
these standards, and to help ensure we are
transparent and held to account as a firm.
We define our ethical standards within our
Global Code of Ethics, which makes an
overarching commitment to high standards
and professional conduct. We expect our
people to follow our core business principles
by acting ethically and with integrity, putting
clients’ interests first, managing conflicts of
interest, retaining and disclosing information
appropriately, and observing high standards
of market conduct.
This policy sits alongside further guidance
forstaff that includes our Code of Conduct;
Global Personal Account Dealing Policy;
Global Gifts and Entertainment Policy;
GlobalConflicts of Interest Policy; Global
Whistleblowing Policy; and Global
Complaints Policy. Our staff receive annual
training on the standards and obligations
setout within these, along with other core
policies and practices that include: anti-
bribery and corruption, slavery and human
trafficking, security and privacy, human
rights, whistleblowing and service provider
selection, management and oversight.
Many of our policies are described in other
sections of this Annual Report e.g. in the
People and culture section (page 38) and in
the Responsible business section (page 46)
as well as in our Corporate Social
Responsibility Brochure. This section is
intended to outline any further policies and
practices that help ensures our business
maintains the high levels of ethical conduct
inwhich we pride ourselves.
Anti-bribery and corruption
The Anti-Bribery and Corruption Policy,
alongside other policies covering political
and charitable donations, gifts and
entertainment, fraud, tax evasion, sanctions,
anti-money laundering and counter-terrorist
financing, sets out our standards and
processes. Our programme is designed
tocomply with all applicable laws and
regulations, including the US Foreign
Corruption Practices Act 1977 and the UK
Bribery Act 2010. The programme and risk
methodology is overseen by a dedicated due
diligence team and includes various policies,
procedures and controls designed to prevent
and detect bribery and corruption. These
include: ‘know your customer’; due diligence
and enhanced due diligence checks;
procedures to prevent, detect and report
suspicious activity and red flags; training
employees; and undertaking politically
exposed persons (PEPs) screening.
Annual training is given on our financial
crimeprogramme to ensure employees
understand their responsibilities and duties.
We have implemented risk-based due
diligence procedures, designed to identify
and verify the owners and controllers of
relationships. This ensures we know our
partners in business, our suppliers and
ourclients, and that we comply with all
applicable laws and regulations. We perform
enhanced due diligence for relationships
inhigher-risk countries. Man Group also
expects those who provide services to us
orwho work on our behalf to have the same
commitment, wherever in the world they
operate.
The annual report from the Money
Laundering Reporting Officer is submitted
tothe Man Group Audit and Risk Committee
and the firm’s policies and procedures are
subject to regular review by the Internal
Auditfunction.
Finally, our Financial Crime Statement of
Principles provides key details on how
ManGroup manages the risks related to
anti-money laundering, counter terrorist-
financing, anti-bribery and corruption,
financial sanctions and facilitation of tax
evasion. Key components to the policies
areoutlined and can be accessed here.
Slavery and human trafficking
Man Group has a zero-tolerance approach
to slavery and human trafficking, as set out
in our Modern Slavery Statement and Global
Inclusion Statement. Our employees receive
annual training on modern slavery which
includes the various forms of servitude and
the actions to be taken should staff become
aware of or suspect the presence of modern
slavery at the firm or within our supply chain.
Human rights
We do not tolerate discrimination or
harassment of any kind and call out
behaviour that is against our values. Our
Human Rights Statement gives information
on our recognition and promotion of human
rights around the world.
Raising concerns
Staff can raise feedback and concerns
invarious ways, including in person with
management or the HR and Compliance
departments, via pulse surveys and the
annual staff survey or via our anonymous
‘whistleblowing’ hotline operated by an
external provider. Advice for staff is set
outinvarious documents, including our
Global Inclusion Statement and Global
Whistleblowing Policy. Our Audit and Risk
Committee has oversight of matters that
have been raised and can raise these to
ourBoard if appropriate.
Information security and data
protection
Using, managing and transferring data plays
a key role in the operation of our business.
We take our role as custodian of information
extremely seriously. We have four key
policies that set out how we manage the
security of information: our Information
Security Policy, Acceptable Use of
Technology and Electronic Communications
policy, Cyber Security Policy; and our Data
Protection Policy.
These policies guide our staff in their
day-to-day operations and establish a
control infrastructure that is aligned to
relevant laws, regulations, our clients’ best
interests and good practice. The controls
setout in the policies include those covering
cyber security control, but also protect Man
Group from cyber breaches. These controls
are continuously reviewed and regularly
tested in the context of penetration testing
orother such third-party assessments.
We run our business with integrity and
holding ourselves to high ethical standards
isembedded within Man Group’s culture.
Our policies and practices continued
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Man Group plc | Annual Report 2021
We have robust business continuity
procedures in place that are reviewed
regularly. These cover our physical
workplaces as well as our digital
infrastructure. They include specific crisis
management plans and include exercises,
testing and monitoring. We also monitor
andconduct regular reviews of our critical
suppliers in this regard. We review our
policies annually and all staff receive training
on their obligations and our standards every
year. Our Privacy Notices are available on
ourwebsite.
Health and safety
Man Group is committed to ensuring the
health, safety (H&S) and well-being of its
employees and any other persons who may
be affected by Man Group’s activities. We
recognise our responsibility and statutory
duty of care to provide and maintain a safe
working environment to prevent ill health,
occupational injury and to promote mental
well-being. Our commitment is set out in
theMan Group Health and Safety Policy
Statement endorsed by the CEO. We have
defined control objectives to address H&S
risks and our policy objectives are aligned
tothe requirements of an internationally
recognised H&S management system,
whichdefines Man Group’s minimum
H&Sstandards, to support the safe
implementation and delivery of our
servicesglobally.
ESG-linked revolving credit facility
In 2019, Man Group converted its revolving
credit facility into one which incorporates
arange of ESG targets. The facility will
bepriced according to Man Group’s
performance against three sustainability-
linked targets:
• To remain a signatory to the Women
inFinance Charter and increase the
percentage of women in senior
management roles in line with targets.
• To reduce our scope 1 and scope 2
(market-based) carbon emissions per full-
time employee in line with targets.
• To maintain a PRI Rating that is at least
level with the median PRI Rating awarded
to all responding signatories.
Supply chain management and
responsible procurement
The expectations we have upon our
consultants, contractors and sub-
contractors are outlined within our Supplier
Code of Conduct. This code outlines the
minimum standards Man Group expects of
its suppliers, as pertaining to considerations
around any economic activities, impact
tothe environment, as well as engagement
with our wider communities.
Man Group intends to lead by example,
andwe endeavour to work closely with
oursuppliers to raise to the opportunity
ofaddressing the global, social and
environmental challenges that we all
currently face. Vendor management
including performance reviews are used
tomonitor the KPIs/SLAs put in place to
ensure our suppliers are fulfilling their duties.
To ensure the impact of our Supplier Code
ofConduct, Man Group specifically utilises
ISO standards and ratings systems such as
Energy Star for IT equipment and Green Star
for paper supplies to assist us in choosing
sustainable products. We also ensure all our
equipment complies with the Restriction
ofHazardous Substances Regulations.
Environment
Through the use of natural resources in our
operations, we have a direct environmental
impact. Our environmental management
activities are focused on a number of key
areas, the most crucial being the way we
useour buildings and carry out our
businesstravel.
We are committed to minimising the
environmental impact of our activities,
through responsible use of natural resources,
maximising energy efficiency, reducing
greenhouse gas emissions, zero waste
tolandfill wherever possible and recycling
orminimising waste.
Man Group has a public, firmwide
Environmental Sustainability Policy
Statement to account for our own corporate
environmental impact.
68
Governance
Man Group plc | Annual Report 2021
Governance at a glance for 2021
Governance at a glance
Our purpose and strategic priorities are set out on pages 2 and 14
to 15. This section outlines the role of the Board in overseeing the
delivery of strategy and the governance framework that is in place
to support this. It also explains who our stakeholders are and how
the Board considers their views when making key decisions.
Board and Committee meeting attendance 2021
1
Board member Board
1
Audit & Risk
Committee
Nomination
Committee
Remuneration
Committee
John Cryan 8/8 – 5/5 7/7
Kate Barker 8/8 1/1 – 7/7
Lucinda Bell 8/8 5/5 5/5 –
Richard Berliand 8/8 5/5 5/5 7/7
Zoe Cruz 8/8 – – 6/7
2
Luke Ellis 8/8 – – –
Antoine Forterre 2/2 – – –
Mark Jones 6/6 – – –
Ceci Kurzman 8/8 – – –
Dev Sanyal 8/8 5/5 – –
Anne Wade 8/8 – 3/3 7/7
1 Two strategy sessions were also held during the year which were attended by all Board members.
2 Due to conflicting commitments, Zoe Cruz was not able to attend the Remuneration Committee meeting held on 22 July 2021.
Zoe received the meeting pack in advance of the meeting for review and consideration.
Section 172 statement (including
principal decisions and
engagement with stakeholders)
The Board of Directors confirms that during
the year ended 31 December 2021 it has
acted in a way that it believes promotes the
long-term success of the Company for the
benefit of its members as a whole, whilst
having due regard to the matters set out
insection 172 of the Companies Act 2006.
Details of how this has been achieved
andthe ways in which the Board has
engaged with our identified stakeholders,
theoutcomes of this engagement and the
consideration of stakeholder interests in
principal decisions are integrated throughout
this Governance report.
Principal decisions:
D1
Appointment of CFO
+ For further details please seepage 75
D2
Dividend policy
+ For further details please seepage 80
D3
Share buyback programme
+ For further details please seepage 80
D4
Unclaimed dividend donation
+ For further details please seepage 82
Board composition
10%
Chair
20%
Executive directors
70%
Independent non-executive directors
0-3 years
40%
30%
3-6 years
30%
6+ years
Board tenure
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Man Group plc | Annual Report 2021
Board experience
Strategy
90%
Finance
90%
Operational
80%
Risk management
100%
Statement ofcompliance
The Company is subject to the 2018 UK
Corporate Governance Code (the Code), which
ispublicly available at www.frc.org.uk. The
Company has, throughout the year ended
31 December 2021, applied the principles of,
andcomplied with the provisions of, the Code
except in relation to the following:
Provision 15 of the Code recommends that
additional external appointments for directors
should not be undertaken without the prior
approval of the Board. The Board has established
a process for approving such appointments
which it considers to be effective. The process
requires directors to inform the Chair of any
proposed external appointment. The Chair then
assesses the proposed appointment and either
approves it or, where the Chair considers it
appropriate, including in any situation where there
may be a potential conflict with the director’s role
on the ManGroup Board,refers the matter to the
full Board for consideration and approval. A full
description ofthe process is on page 87.
Provision 33 of the Code requires that the
Remuneration Committee (the RemCom) should
have delegated responsibility for setting the
remuneration of the Chair. The terms of reference
of the RemCom provide that the RemCom has
authority to recommend to the Board but not
toapprove the remuneration of the Chair. This
isbecause the Board believes that in order to
provide transparency and allowthe views of all
directors, executive and non-executive, to be
taken into account, it is appropriate for all Board
members to provide input into determining the
Chair’s remuneration.
Board diversity
The Board recognises the importance
ofdiversity and is pleased to have
maintained gender parity during 2021
andhave met the ethnic diversity targets
setby the Parker Review.
Workforce engagement
• Two non-executive directors lead the
workforce engagement programme.
• 13 meetings held with employees during
the year.
• Key themes identified during employee
feedback sessions discussed with the
Board.
• Review of the employee engagement
model undertaken by the Board.
+ For further information on how we engage with our
employees seepage 81.
50%
Male
50%
Female
Gender
1.
35 – 44 10%
2.
45 – 54 20%
3. 55+
70%
1
2
3
Age
1.
Black, Asian and ethnically diverse 20%
2.
Ethnic majority 80%
1
2
Ethnicity
1.
US based 33%
2.
UK based 67%
1
2
Location
70
Governance
Man Group plc | Annual Report 2021
A strong collaborative culture
Chair’s governance overview
Dear Stakeholder
I am pleased to present the Governance
report for the year ended 31 December
2021. This section will enable you to gain an
understanding of ManGroup’s governance
framework and responsibilities, and the
areas of focus and performance of the
Boardover the past year. We recognise the
importance of corporate governance across
the organisation and apply and report under
the 2018 UK Corporate Governance Code
(the Code).
Board changes
As highlighted in my earlier statement, Sandy
Rattray’s decision to retire as CIO resulted in
anumber of changes to the Senior Executive
Committee and, ultimately, the Board. Mark
Jones, our former CFO, stood down from the
Board to take up the position of Man Group’s
Deputy CEO and Antoine Forterre, former
Co-CEO of Man AHL, was appointed as
ournew CFO. Further details on the CFO
appointment process are set out in the
Nomination Committee report and you will
hear from Antoine about the transition to
hisnew role and his initial impressions of the
Board in the Q&A section on page 75. I would
like to thank Sandy again for his contribution
to the firm over the years and look forward
toMark and Antoine’s continued work with
the Board in their new roles.
Dev Sanyal and Zoe Cruz will be retiring
fromour Board as non-executive directors
following the conclusion of the AGM in May
2022. I would like to reiterate our thanks
toboth Dev and Zoe for their contributions to
the Board. As set out in my earlier statement,
Jackie Hunt has joined our Board with effect
from 28 February 2022 and we are very
much looking forward to working with her.
We remain committed to promoting diversity,
equity and inclusion across the organisation
and are proud to maintain a Board with
gender parity that meets the Parker Review
ethnicity targets and are proud that, during
2021, we have maintained a Board that has
gender parity and meets the Parker Review
ethnicity targets. This does not mean that
our work is finished. The Board will always
be mindful of diversity, in its broadest sense,
when considering its current composition
and when making future appointments in
accordance with our Board Diversity Policy
set out on pages 100 to 101.
Committee changes
As stated in my governance overview last
year, Anne Wade succeeded Richard Berliand
tobecome Chair of the Remuneration
Committee following the 2021 AGM, at
which point she was also appointed as a
member of the Nomination Committee.
Richard remains as our Senior Independent
Director and a member of all Board
Committees. In late 2021, Kate Barker was
appointed as an additional member of the
Audit and Risk Committee. Jackie Hunt has
been appointed as a member of the Audit
and Risk Committee and the Remuneration
Committee with effect from 28 February 2022.
Working with stakeholders
We seek to engage with stakeholders in an
open, constructive and transparent manner
and make a conscious effort to ensure
stakeholder views are considered as part
ofthe Board’s decision-making process.
Following a stakeholder mapping exercise
undertaken during the year, we agreed that
regulators should be recognised as one of
our key stakeholders and that communities
and the environment should be separated
into two distinct stakeholder groups. This
year, our section 172 statement has been
integrated into the stakeholder engagement
section which explains how and why we
engage with our stakeholders.
Board activities and effectiveness
It has been another busy year for the Board
and we have had to adapt our Board
practices to reflect the impact of the
COVID-19 pandemic, and the need for virtual
and hybrid meetings. A summary of our key
activities is set out on pages 76 to 77 and
Iam very pleased with the progress made
against our agreed actions from 2020.
In line with the Code, this year’s Board
effectiveness review was undertaken by an
external facilitator. We are pleased to confirm
that the results of the external Board evaluation
(which are set out on pages 88 to 89) echo
what we are most proud of – that we are an
effective, engaged and diverse Board.
Board priorities for 2022
One of our key priorities for 2021 was to spend
more time discussing the Company’s strategy.
Following two in-depth strategy sessions held
during the year, I’m pleased with the progress
we’ve made and will continue to keep this
under review in the year ahead.
Thank you
2021 has been a very successful year for
ManGroup and I’d like to thank all of our
people around the world for pulling together,
once again, to make it another year to be
proud of.
John Cryan
Chair
I’d like to thank all of our
people around the world
for pulling together, once
again, to make it another
year to be proud of.
John Cryan | Chair
71
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
Governance structure
Role of the Board
The Board’s core role is to act in the best interests
and promote the long-term success of the Company
for the benefit of its members, with due regard to the
interests of other stakeholders.
This requires it to:
• determine and review business strategy and
ManGroup’s appetite for risk;
• monitor management performance in delivering
against that strategy;
• ensure that risk management measures and
internal controls (including those related to
climate) are appropriate and effective;
The CEO is assisted in the day-to-day management of the firm by the Senior ExCo, from which the Board
receives updates at each meeting through the CEO and CFO reports. The Senior ExCo is responsible for
implementing the Company’s global business strategy and ensuring the strategy is appropriately disseminated
and actioned accordingly within the Company’s two distinct sub-groups in line with the delegated authorities
framework. Further details on the Senior ExCo are available on page 74.
Senior Executive Committee (Senior ExCo)
• oversee and monitor the embedding of and
adherence to the Company’s business values; and
• ensure that the Company’s financial structure,
resources, talent and culture supports long-term
growth.
In discharging this role, the Board also has regard to
the interests of a wide range of stakeholders, including
employees, clients, business partners and suppliers,
regulators, broader communities and the environment,
in order to build mutual trust and support the long-term
sustainability of the business.
1 Full Committee terms of reference, which are reviewed and approved by the Board on an annual basis, can be found
onourwebsite. Details of the work of the Committees during the year are given in the separate Committee reports
inthisAnnual Report.
Audit and Risk Committee
• Reviews the integrity of the
Company’s financial reports
and statements, and
recommends their approval
to the Board
• Recommends to the Board the
appointment of the external
auditor and reviews their
effectiveness and
independence
• Approves the Internal Audit
plan and reviews the
effectiveness of the Internal
Audit function and
management’s response to
their findings
• Reviews and reports to the
Board on the effectiveness of
ManGroup’s risk management
and internal controls framework
+ Seepage 90
Remuneration Committee
• Determines and recommends
to the Board the principles and
structure of the Directors’
Remuneration Policy
• Approves the total annual
compensation for individual
executive directors
• Approves the quantum of the
Company’s annual variable
compensation pool and
deferral policies
• Considers and reviews the
remuneration of the wider
workforce.
• Approves the total annual
compensation for Executive
Committee members,
Company Secretary and
Remuneration Code staff.
• Oversees the Company’s
engagement on directors’
remuneration and reporting
+ See page 102
Nomination Committee
• Keeps the Board’s size,
structure, composition and
diversity under review in
response to business needs
and opportunities
• Considers the skills, experience
and knowledge required for
Board appointments
• Conducts the search and
selection process for new
directors, taking advice from
independent search consultants
• Recommends to the Board
preferred candidates for Board
appointment
• Reviews Board and senior
management development and
succession planning to ensure
continuity of resource
+ See page 97
Board
CEO’s operating
authorities and procedures
To help manage and control
the business on a day-to-day
basis, the CEO has
implemented a framework of
delegated authorities and
procedures which applies
throughout thefirm. This
framework setsout authority
levels andcontrols in respect
of material business change,
the development of
ManGroup’s product range,
non-budgeted expenditure,
recruitment and
compensation, legal
agreements, financial
guarantees and use of the
Company’s balance sheet.
Board Committees
1
Matters reserved for the Board
To discharge its role, the Board has reserved certain
key areas of decision-making including business
strategy, risk appetite, material acquisitions and
disposals, capital structure and funding, financial
reporting anddividend policy. A full list of the Board’s
reservedmatters is available on our website at
www.man.com/corporate-governance.
Board delegation
to the CEO
All business decisions and
activities which are not
reserved for the Board and
its Committees are
delegated to the CEO.
CEO
Key:
Flow of information to the Board
Delegated authority from the Board
72
Governance
Man Group plc | Annual Report 2021
Luke Ellis
Chief Executive Officer (CEO)
Appointed
September 2016.
Background and career
Prior to joining the Board, Luke served
as President of Man Group from
2012. Before this, he was Head and
CIO of Man Group’s Multi-Manager
Business, non-executive Chair of
Man GLG’s Multi-Manager activities
and Managing Director of Man
FRM from 1998 to 2008. He was a
Managing Director at J.P. Morgan
in London from 1988 to 1998.
Areas of expertise and
contribution
Varied investment management
background, strong and collaborative
leadership approach and plays
an essential role in maintaining
a positive corporate culture
across the organisation.
Material external positions
Deputy Chair of the Standards Board
for Alternative Investments Limited
and Chair of the Board of Trustees
of Greenhouse Sports Limited.
John Cryan
Chair
Appointed
January 2015. Chair: January 2020.
Background and career
John was CEO at Deutsche Bank
AG from July 2016 to April 2018,
having previously served as Co-
CEO from July 2015. Prior to this,
he held a number of senior roles
at UBS AG and was President
of Temasek in Singapore.
Areas of expertise and
contribution
Broad knowledge of international
financial markets gained from
experience at leading global
financial institutions and
significant understanding of
the regulatory environment in
which Man Group operates.
Material external positions
Chair of XCyber Group Ltd,
a private cyber intelligence
company based in the UK.
Antoine Forterre
Chief Financial Officer (CFO)
Appointed
October 2021.
Background and career
Prior to his appointment to the
Board, Antoine served as Co-CEO
of Man AHL from 2017 and COO
of Man AHL from 2015, before
which he was Head of Corporate
Development and Group Treasurer
of Man Group. Before joining Man
Group in 2011, Antoine worked at
Goldman Sachs in London and Paris.
Areas of expertise and
contribution
Strong background in finance,
technology, strategy and
corporate development and
comprehensive understanding of
the key drivers of the business as
a result of his previous leadership
positions within Man Group.
Material external positions
None.
Richard Berliand
Senior Independent Director (SID)
Appointed
January 2016. SID: May 2017.
Background and career
Richard held senior positions at J.P.
Morgan for over 23 years, including
Global Head of Prime Services, Global
Head of Cash Equities and Chair of
the firm’s Market Structure practice.
Richard was a non-executive director
of Rothesay Life plc and Deputy Chair
of Deutsche Börse AG until 2019.
Areas of expertise and
contribution
Deep understanding of financial
markets, the regulatory environment,
risk management and technology
gained through senior executive
roles in the financial services sector
and a diverse range of international
non-executive positions.
Material external positions
Chair of TP ICAP Group plc*.
Key:
Executive director
Non-executive director
*
Quoted on a regulated market
Nomination (Chair)
R
Remuneration (Chair)
A
Audit and Risk (Chair)
Nomination
R
Remuneration
A
Audit and Risk
Our directors bring diversity of skill,
experience and outlook which we believe
creates greater value, leads to better
decision-making and promotes the
long-term success of the Company.
A balanced and
effective team
Board of Directors and Company Secretary
73
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
Dame Katharine Barker
Independent non-executive director
Appointed
April 2017.
Background and career
Kate was a member of the Bank of
England’s Monetary Policy Committee
from 2001 to 2010 and prior to that,
she was Chief Economic Adviser to
the CBI. Kate was a Senior Advisor
to Credit Suisse (2010-2016) and a
non-executive director of Yorkshire
Building Society (2010-2017) and
Taylor Wimpey plc (2011-2020).
Areas of expertise and
contribution
Experience in strategic thinking,
economic insight and broad
knowledge of monetary and public
policy and financial markets.
Material external positions
Chair of Trustees for the British
Coal Staff Superannuation
Scheme and for the Universities
Superannuation Scheme.
Lucinda Bell
Independent non-executive director
Appointed
February 2020.
Background and career
Lucinda is a chartered accountant
and served as CFO of The British
Land Company plc from 2011 to 2018,
where she also led on sustainability.
She was a non-executive director
and Chair of the Audit Committee
at Rotork plc (2014-2020).
Areas of expertise and
contribution
Extensive financial and listed
company expertise as well as
valuable experience in ESG matters.
Solid experience as an Audit
Committee member and Chair.
Material external positions
Non-executive director and Chair
of the Audit Committee at Derwent
London plc*, non-executive director
of Crest Nicholson Holdings plc*.
Zoe Cruz
Independent non-executive director
Appointed
June 2018.
Background and career
Zoe is a senior banking executive
and former Co-President of Morgan
Stanley. She founded Voras Capital
Management in 2009 and ran the firm
as CEO until 2013. She was also a
non-executive director of Old Mutual
plc from 2014 until its managed
separation completed in 2018.
Areas of expertise and
contribution
Deep knowledge of global financial
markets across all asset classes
and strong US perspective.
Material external positions
Founder and CEO of Menai Financial
Group, a digital asset company.
Jacqueline (Jackie) Hunt
Independent non-executive director
Appointed
28 February 2022
Background and career
Jackie is a chartered accountant
and has held senior executive and
Board positions including as Chair
of Allianz Asset Management, CEO
of Prudential U.K, Europe and Africa
and CFO of Standard Life plc over a
career spanning more than 25 years.
Areas of expertise and
contribution
Significant UK and international
financial services expertise
(including insurance and asset
management), strategic and financial
insight, and valuable experience
as an executive director.
Material external positions
Non-executive director of
OneWeb, a global satellite
communications company.
Elizabeth Woods
Company Secretary
Elizabeth joined Man Group
in February 2014 as Senior
Assistant Company Secretary.
She was appointed Deputy
Company Secretary in March
2017 and became Company
Secretary in August 2019.
Before joining Man Group,
Elizabeth held company secretarial
roles at PwC Legal and Capita,
where she was responsible for
delivering support and corporate
governance advice to a portfolio
of clients including FTSE and
AIM listed companies, and at
Mobeus Equity Partners where
she was Company Secretary of a
number of Venture Capital Trusts.
Cecelia (Ceci) Kurzman
Independent non-executive director
Appointed
February 2020.
Background and career
Ceci was Vice President of Global
Marketing for Epic Records at Sony
Music Entertainment and prior to
this, held various positions at Arista
Records where she led marketing
and artist development functions.
Areas of expertise and
contribution
Deep knowledge of marketing,
brand management and technology,
specifically digital media and
digital endorsement and significant
experience with company launches
and funding growth stage businesses.
Material external positions
Non-executive director of Revlon,
Inc.* (since 2013) and of Warner
Music Group* (since October
2020) and Founder and President
of Nexus Management Group.
Dev Sanyal
Independent non-executive director
Appointed
December 2013.
Background and career
Dev is the CEO of Varo Energy and
previously had a 32-year career with
BP plc including over a decade as
a member of the Group Executive
Committee. He was Chief Executive
of Alternative Energy, headed
the Gas and Low Carbon Energy
business and was responsible for
Europe and Asia. He also served as
Group Treasurer and Chair of BP
Investment Management Limited.
Areas of expertise and
contribution
Wide-ranging international and
operational experience with extensive
knowledge of capital markets,
asset and risk management,
trading and foreign exchange.
Material external positions
CEO of Varo Energy, a Swiss
headquartered energy firm.
Anne Wade
Independent non-executive director
Appointed
April 2020.
Background and career
Anne held senior roles in research
and equity investment during her
17-year career at Capital International,
including Senior Vice President and
director. She also served as a non-
executive director and Chair of the
Remuneration Committee of John
Laing Group plc from 2015 to 2021.
Areas of expertise and
contribution
Significant experience in
investment management, from fund
management to social finance,
ESG and impact investment.
Material external positions
Non-executive director of Summit
Materials, Inc.* (since 2016) and
a Partner in Leaders’ Quest.
A
74
Governance
Man Group plc | Annual Report 2021
Senior Executive Committee
Roles and responsibilities of the Senior
Executive Committee (Senior ExCo)
The Senior ExCo, led by the CEO, is responsible for:
• overseeing the investment engines and other
businessareas;
• developing (for recommendation to the Board)
andimplementing the firm’s global strategy;
• ensuring adherence to the risk appetite parameters
setbythe Board;
• taking decisions in accordance with the firm’s delegated
authorities framework; and
• advising the UK/EEA and Rest of World holding company
boards onkey strategic decisions for implementation
across the respective sub-groups.
The Senior ExCo meets on a weekly basis to maintain
itsbroad operational oversight of the business, discuss
top-level strategic and risk issues and develop proposals
forBoard review. These regular meetings are supplemented
with formal quarterly governance and business oversight
meetings with key activities and areas ofdiscussion during
2021 highlighted below.
Implementing our strategy
Shanta Puchtler
President
Key areas of responsibility
Man GLG, Man FRM/Man Solutions,
Central Trading, Man Data Science,
Man’s Quantitative Alpha Research
Lab, Prime Broker relationships,
Fund Treasury and shared
responsibility for Investment Risk.
Robyn Grew
Global COO and General Counsel. Head
of ESG and Head of ManGroup US
Key areas of responsibility
Man Group US, ESG, and
Infrastructure covering
Operations, Compliance, Legal,
HR, Talent, Communications,
Business Operational Risk &
Resilience, Financial Crime
and Corporate Real Estate.
Eric Burl
Global Co-Head of Sales & Marketing
and Head of ManGlobal Private Markets
Key areas of responsibility
Global Sales and Marketing
and Man GPM.
Steven Desmyter
Global Co-Head of Sales & Marketing,
ManGroup
Key areas of responsibility
Global Sales and Marketing,
Responsible Investing, Chair
of Man Charitable Trust.
Luke Ellis
CEO
See page 86 for key areas
ofresponsibility
Mark Jones
Deputy CEO
Key areas of responsibility
Man AHL, Man Numeric, Man
Alpha Technology and Trading
Platform and Core Technology.
Antoine Forterre
CFO
See page 86 for key areas
ofresponsibility
Key activities and areas of discussion
during2021
Key decisions made during 2021 included:
• approval of Senior ExCo membership changes
(Antoine Forterre, Eric Burl and Steven Desmyter
appointed as members);
• roll out of the agile working model and subsequent
return to office plans; and
• hiring of the Capital Asset Solutions team to sit within
the Man Solutions business.
Key areas of discussion and focus at the 2021 meetings
are set out below:
• reviewed quarterly business presentations and
strategic plans for investment engines, Sales, ESG,
Infrastructure and Technology;
• received people and culture updates and discussed
issues relating to HR, Talent, diversity, equity and
inclusion and well-being;
• received updates from the UK/EEA and Rest of World
holding company boards;
• received updates and discussed the financial
performance of the firm; and
• considered and agreed actions arising from Man
Group plc Board and Board Committee meetings.
75
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
Principal decision
On 1 October 2021, Antoine Forterre
succeeded Mark Jones as the CFO of Man
Group following the recommendation of the
Nomination Committee and subsequent
Board approval in June 2021. Prior to
Antoine’s appointment, he was co-CEO
ofMan AHL and a member of Man Group’s
Executive Committee and Responsible
Investment Committee.
As one of the most critical operational
andstrategic roles within the firm, the
Boardrecognised the importance of the
appointment to all stakeholders and took
thisinto account when formulating the role
criteria, identifying potential candidates
andduring the appointment process itself.
The right candidate had to be able to
manage the firm’s capital, risk and controls,
financial reporting, engage with investors
and undertake a scope of broader activity
asneeded.
The Board considered how the appointment
would support the delivery of the firm’s
strategic objectives and, having undertaken
an extensive external benchmarking
exercise, agreed that Antoine was the right
candidate for the role. The Board believes
that he has the right mix of skills and
experience to support the implementation
ofthe Company’s strategy and deliver
long-term success.
Details of the appointment process are set
out in the Nomination Committee Report.
I am looking forward to
embracing all that the role
brings and tackling the
challenges ahead.
Antoine Forterre | CFO
Q&A with Antoine Forterre
Q: You’ve been at Man Group for a number
ofyears, how have you seen the firm evolve
over thattime?
A: The firm has changed profoundly since I joined
more than ten years ago and the most noticeable
change is its culture. I joined a few years after
thefinancial crisis, we’d undertaken a series of
acquisitions and there was a collection of different
cultural practices in operation. Man Group felt more
like a holding company at the time and significant
work has been undertaken to make the culture feel
like that of a holistic performance-focused
investment manager.
We’ve also expanded our product offering, our
client base, our geographical reach (particularly
inNorth America) and the result is a diversified
business that is continuing to thrive.
Q: What was the transition from co-CEO
ofAHL to Group CFO like?
A: My transition was very smooth; I changed role
within a business that I know very well, which is
also performing very well. I also benefited from
having the outgoing CFO (Mark Jones) remain in the
business as Deputy CEO. The transition has struck
the right balance of familiarity (due to my tenure at
the firm) and novelty. The Board has almost entirely
changed since I was last interacting with directors
regularly and there is a new strategy in place
tobeimplemented. I am looking forward to
embracing all that the role brings and tackling
thechallenges ahead.
Q: What were your first impressions
of the Board?
A: It started with a long, interesting conversation
with John Cryan (our Chair) on a variety of
technicaltopics.
This is indicative of the character of our Board
members – deeply engaged, very smart and they
understand the corporate culture we’re building.
They think differently, want to help and provide
theright level of challenge.
We’ve maintained a good dynamic during
COVID-19 with some virtual and some hybrid
meetings, but I look forward to more in-person
meetings.
Q: What would you consider the greatest
risksand opportunities to be for the asset
management industry over the next
12months?
A: The known unknowns are well documented:
theCOVID-19 pandemic (hopefully at its tail-end);
inflation; political instability; and global geopolitical
wobbles (often triggered by climate change)
aredelivering short sharp shocks to the system.
The more impactful risks will be the ones we don’t
know yet, or derivatives of those already at play.
That said, risks bring opportunities, and it should
be a good environment for active investment
management, as we’ve demonstrated with
ourgrowth over the last two years. The focus on
ESG presents a major opportunity for change and
we will be closely examining our capital allocation
and skill base to ensure we can meet this demand.
Q: What are you most looking forward
toachieving?
A: A lot has been achieved by my predecessors
and we completed a restructuring exercise two
years ago. I would like to help define and execute
Man Group’s growth strategy through my team
overthe next two to three years. My focus will
beonthe allocation of capital and resources,
theimplementation of our ESG strategy and
ourapproach to M&A.
D1 D3D2 D4
Change of Chief Financial Officer
76
Governance
Man Group plc | Annual Report 2021
Activity Outcomes
Link to strategy
andstakeholders
(see key above) Timeline
Strategy and business development
Reviewed M&A strategy and opportunities Considered and debated the current approach to potential M&A opportunities
and lessons learned from some of the recent M&A activity across the industry.
1
3
4
C
S
E
Throughout
the year
Reviewed strategic plans for each of the
investment engines, Sales, Technology
and Infrastructure
Considered the strategic objectives of the firm, including detailed reviews of the
investment engines and business functions in the context of current industry
trends and discussed the options available to achieve growth.
1
2
3
4
C
S
E
C
E
B
R
Feb, Mar
& Jul
Discussed ESG and RI strategies
andinitiatives
+ For further information seepages 46 to 62
Reviewed ESG strategies and progress against RI initiatives in light of client
demand, global regulation and the investment required to achieve goals and
targets.
1
2
3
4
C
S
C
E
B
May
Post-completion update on corporate
restructure which took place in 2019
Received an update two years after completion and concluded that there had
been no unanticipated issues with various positive outcomes.
1
2
3
4
C
S
E
C
E
B
R
May
Received an external view of the global
hedge fund industry and perspectives
ofthe competitive landscape
Considered current trends within the industry and identified areas of opportunity
and challenge across strategies, markets and individual products.
1
2
3
C
S
May & Nov
Received investor engagement and
valuation update
Discussed movement in share price, increased shareholder engagement,
investor feedback on progressive dividend policy, and analyst and press
coverage.
4
C
June
Reviewed output of stakeholder mapping
exercise
Reviewed Man Group’s identified stakeholder groups and agreed to the addition
of ‘regulators’ as a stakeholder and the splitting out of ‘communities and
environment’ to be two distinct stakeholder groups.
3
C
S
E
C
E
B
R
Jul
Discussed key clients Discussed the relationships with certain key clients, associated challenges,
opportunities and the ways to strengthen relationships further and continue
tomeet client expectations.
1
2
3
4
S
Jul & Sep
Reviewed ManGroup’s Sales function Discussed areas of focus for 2022 and beyond through promotion of new
strategies and diversification of product range.
1
2
3
4
S
E
C
Dec
Risk management
Analysed ManGroup’s emerging and
principal risks
+ For further information seepages 33 to 37
Assessed the likely impact of emerging risks and proposed changes.
Discussed, challenged and approved the principal risks and risk management
disclosures in the Annual and Interim Reports.
1
2
3
4
C
S
E
C
E
B
R
Feb
Assessed effectiveness of risk
management and internal controls
+ For further information seepage 33
Reviewed ManGroup’s systems of risk management andinternal controls
and concluded that these were effective.
1
2
3
4
C
S
E
C
E
B
R
Feb
Reviewed proposals contemplated
byBEIS consultation on restoring trust
in audit and corporate governance
Identified the potential impact of the proposals on the firm as both an asset
manager and a premium listed company, and reviewed and approved Man
Group’sresponse to the BEIS audit and corporate governance consultation.
3
B
R
Jun
Reviewed risk appetite and governance
framework
Approved revised risk appetite and governance framework.
1
2
3
4
C
S
E
C
E
B
R
Nov
Key to strategy:
1
Innovative investment strategies
2
Strong client relationships
3
Efficient and effective operations
4
Returns to shareholders
Key activities of the
Board during 2021
Board activities timeline
+ For more information on our strategy
seepages 14 and 15
+ For more information on our stakeholder groups
seepages 78 to 85
1
2
3
4
5
Board activities
1. Innovative investment strategies 22%
2. Strong client relationships 18%
3. Efficient and effective operations 19%
4. Returns to shareholders 24%
5. Governance and other 17%
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Man Group plc | Annual Report 2021
Activity Outcomes
Link to strategy
andstakeholders
(see key above) Timeline
Financial performance
Approved 2021 Budget and 2021-23
Medium Term Plan (MTP)
Approved the 2021 Budget and 2021-23 MTP having reviewed the underlying
assumptions for net flows, performance, revenue margins and costs.
3
4
C
S
E
C
E
B
Feb
Approved change to financial KPI Scrutinised and approved proposal to change financial KPI from core profit
tocore EPS for better comparability across peers and stronger alignment
ofmanagement and shareholder incentives.
3
4
C
E
Feb
Approved FY 2020 year-end results
and2021 interim results
Reviewed, challenged and approved the 2020 Annual Report and the 2021
interim results.
4
C
S
E
B
Feb
& Jul
Recommended and approved final and
interim dividends and change to dividend
policy
Recommended the 2020 final dividend to shareholders which was approved
atthe 2021 AGM. Approved payment of the 2021 interim dividend.
Considered, challenged and approved a progressive dividend policy for
all future dividends.
4
C
Feb
& Jul
Approved two share buyback programmes Approved the launch of two further share buyback programmes of up to
$100million and $250 million (with an initial tranche of up to $125 million)
havingconsidered potential alternative options for capital deployment.
4
C
Jul & Dec
Approved revolving credit facility (RCF)
extension
Discussed and approved an extension to the maturity date of the firm’s
$500million RCF.
3
B
Sep
People and culture
Discussed the approach to talent and
succession planning
Reviewed the 2021 key priorities of Man Group’s Talent function and evaluated
the talent framework in place to support employees, with a particular focus
ondiversity.
3
E
Feb
Approved appointment of new Chief
Financial Officer
+ For further information seepage 75
Approved the appointment of Antoine Forterre as CFO.
1
2
3
4
C
S
Jun
Approved employee Sharesave Offer 2021 Approved the offer of the 2021 Sharesave scheme to all eligible employees.
3
4
C
E
Jul
Reviewed employee engagement
feedback and employee engagement
model
+ For further information seepage 81
Considered and discussed key themes identified from the Board’s engagement
with employees. Reviewed the current model in light of developing best practice
and agreed certain enhancements to the process.
3
E
Jul & Sep
Reviewed feedback from external Board
and Committee evaluation
+ For further information seepages 88 to 89
Considered feedback from the external Board and Committee evaluation,
discussed suggested areas for development and agreed actions to be
progressed.
1
2
3
4
C
S
E
C
E
B
Sep & Nov
Approved executive directors’ objectives
and Directors’ Remuneration Policy
Discussed, challenged and approved executive directors’ qualitative objectives
and recommended the Directors’ Remuneration Policy to shareholders
forapproval.
3
4
C
E
Nov & Dec
Assessed and monitored culture Assessed and monitored culture through regular people and culture updates
from the CEO and undertook a specific review of culture with a focus on the
impact of agile working.
3
E
Dec &
throughout
the year
Approved an additional non-financial KPI
+ For further information seepage 23
Discussed and approved the addition of a non-financial KPI linked
toESG-integrated AUM growth to reflect Man Group’s commitment
to investing responsibly.
1
2
3
4
C
S
C
E
Dec
Key to stakeholder:
C
Clients
S
Shareholders
E
Employees
C
Communities
E
Environment
B
Business partners and suppliers
R
Regulators
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Man Group plc | Annual Report 2021
Our key stakeholders
Stakeholder engagement
Our section 172 statement is integrated
across these pages 78 to 85 and sets out
who our stakeholders are, how the Board
has engaged with each stakeholder group
and any key outcomes. We have also
identified in the principal decisions boxes
onpages 75, 80 and 82, how the Board
hasconsidered the interests of stakeholders
when making long-term strategic decisions.
As set out in the Chair’s governance
overview, the Board undertook an exercise
to review the firm’s previously identified
stakeholders. As a result, it was agreed
thatregulators would be added as a key
stakeholder. Long-term engagement was
already in place with regulators, so this
addition to Man Group’s stakeholder map
reflects long-standing practice. It was
alsoagreed that communities and the
environment would be split from one
combined stakeholder group into two.
The Board believes that
engaging with stakeholders
is crucial to Man Group’s
business and enables
theBoard to make better
informed decisions for
thelong-term benefit
oftheCompany and
itsstakeholders.
Clients
Employees
Shareholders
Business
Partners and
Suppliers
Regulators
Our key
stakeholders
Communities
Environment
Consequences of decisions in
thelong term
The Board has demonstrated its
awareness of the likely consequences of
its decisions over the long term as part of
its consideration of Man Group’s strategy
and business model as set out on pages
10 to 11 and 14 to 15. The Board held
twostrategic sessions during 2021 to
consider the long-term strategic direction
of the firm. As part of these strategic
discussions, the Board considered the
market and industry trends and potentially
impacted stakeholders.
The Board’s principal decisions are
summarised on page 68 and are
detailedthroughout this stakeholder
engagement section.
Details of how the Board has had
regard tothe following matters
as they relate to section 172
ofthe UK Companies Act can
befound onthe following pages:
• Consequences of decisions in the long-
term – 78
• Interests of employees – 81
• Fostering business relationships – 79
• Impact on the community and
environment – 82 to 83
• High standards of business conduct
– 85
• Need to act fairly between
shareholders – 80
79
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Man Group plc | Annual Report 2021
Clients
Why?
Delivering outperformance for our clients is fundamental to our
corporate purpose. To achieve outperformance, an understanding
of our clients’ own investment goals is critical to ensure decisions
relating to the strategic direction of the firm are aligned to those
ofour clients.
How?
The Board remained mindful that the COVID-19 pandemic
disrupted the firm’s usual schedule of client interactions. The
directors considered the impact on the firm’s ability to deliver on
its purpose and how to continue to meet clients’ investment goals,
deliver market outperformance and build strong relationships.
The Board delegates direct engagement with clients to the
executive directors and senior management team. Regular
updates on client interaction and engagement are presented
atBoard meetings via the CEO report.
Where possible, executive directors and members of the
management team conducted face-to-face client meetings where
government guidelines allowed, and virtual sessions were held
continually throughout the year. The Board also considered
clientfeedback as part of its strategy session discussions.
The Board sought advice and perspectives on current and future
industry and market trends, including the competitive landscape,
in order to anticipate client needs and set the firm’s strategy and
objectives accordingly.
Outcomes
• 14,000+ client meetings were conducted throughout the year,
either physically or virtually.
• The Board reviewed the analysis of Man Group’s client base,
the resource allocation to key client relationships and the
various theme-based marketing campaigns which had received
positive responses from clients.
• Agreed geographical regions of focus following reviews
undertaken of client trends.
• Considered the improvement to our client experience by
increasing collaboration between the sales, marketing and
communications functions and endorsed plans to relaunch
theRI website and increase social media presence.
• The Board remains aware of the focus on ESG from clients.
Asa result, firmwide RI priorities were presented to the Board
and five additional ESG strategies were recommended by
senior management. The Board agreed additional investment in
resourcing and technology. The Board will continue to oversee
developments in both ESG and technology to meet client
demand and ensure these align with the firm’s overall purpose.
Fostering business relationships
Clients are fundamental to our business and represent our most
significant business relationships. The executive directors and
senior management undertake frequent client engagement
andthis feedback is considered as part of strategy setting
andlong-term decision-making.
The Board also works to foster strong business relationships with
its business partners and suppliers and to that end has adopted
aSupplier Code of Conduct to lead by example and promote high
standards of business conduct. More information on our work
with business partners and suppliers and the Supplier Code
ofConduct can be found on pages 67 and 84.
The Board considers Man Group’s impact on its supply chain
aspart of its annual approval of the Modern Slavery
TransparencyStatement.
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Man Group plc | Annual Report 2021
Shareholders
Why?
Achieving long-term success and attaining our goals and
objectives as a firm is underpinned by the support of our
shareholders who benefit directly from it. We are therefore
committed to proactive engagement with our shareholders and
the Board is mindful that with a significant shareholder base, it
isimportant to act fairly between shareholders and consider a
variety of needs. Market trends demonstrate that shareholders are
increasingly interested in the mechanics of decision-making as
well as the decision itself, and the firm is committed to providing
shareholders with reliable, timely and transparent information.
How?
The Board actively engages with Man Group’s largest
shareholders and encourages feedback as part of this
engagement process. Executive directors attend investor
roadshows and other investor events throughout the year. Key
topics in 2021 included product development and innovation,
senior executive changes, M&A strategy, and investment within
the business to create options for future growth.
The Board receives reports from the Investor Relations function
on the Company’s shareholder base, including key themes on
shareholder sentiment. TheChair and the Senior Independent
Director held shareholder engagement meetings and the
Remuneration Committee Chair consulted with the largest
shareholders and proxy voting agencies on changes to the
Directors’ Remuneration Policy.
Although shareholders are updated via engagement meetings,
electronic communication (including the website), as well as
written correspondence where necessary, the Board recognises
that the AGM is the primary form of formal interaction with its
shareholders. As restrictions on public gatherings due to
COVID-19 impacted the ability to hold a physical AGM in 2021,
shareholders were given the opportunity to both submit questions
to the Board in advance, or ask questions during the live webcast.
Principal decision: progressive dividend policy
In early 2021, the Board considered moving to a progressive
dividend policy which takes account of the growth of overall
earnings each year. As part of its consideration, the Board
discussed the options for a new dividend policy, the benefits and
risks associated with changing the policy, alternative uses for the
available capital, and possible shareholder reaction. The Board
noted that many UK institutions, being Man Group’s single largest
existing shareholder group, viewed progressive dividends
favourably. Having considered the likely positive feedback from
shareholders (the stakeholder group most impacted by the
decision), the Board approved a new progressive dividend policy.
The Board requested an update from management in mid-2021
on the feedback received from shareholders following the
implementation of the new policy. Management explained to the
Board that the response had been positive with a meaningful
increase in engagement with both existing and prospective
shareholders.
Our key stakeholders cont.
Stakeholder engagement continued
Outcomes
• Received metrics on shareholders as part of monthly reporting
to inform discussion and decision-making.
• Continued high standard of proactive engagement and
conversations with shareholders, led by the firm’s Investor
Relations function, the CEO and CFO. 80+ meetings took place
during the year.
• Majority of proposals approved at the 2021 AGM, with
follow-up conversations with institutional shareholders where
votes against were received. More detail can be found in the
Directors’ report on page 134.
• Following an extensive shareholder engagement process, the
Board recommended a new Directors’ Remuneration Policy for
approval at the 2022 AGM.
• A progressive dividend policy was implemented with positive
feedback from shareholders. More detail is set out above.
• Having considered alternative uses for the capital, the Board
approved two further share buyback programmes during the
year in line with the firm’s approach to capital management.
Principal decision: share buyback programme
In December 2021, the Board approved a share buyback
programme of up to $250 million with an initial tranche of up to
$125 million. Prior to approval, the Board considered the views
ofthe firm’s stakeholders, particularly its shareholders (and the
potentially conflicting views within the shareholder population),
given this buyback programme would be of a significantly higher
value than those undertaken previously. The Board also
deliberated whether shareholders would consider this use of
capital the most appropriate option for delivering long-term
success. Alternative uses of capital were discussed and, having
considered the various views held by Man Group’s largest
shareholders regarding capital return options, the Board
concluded that the buyback was the most appropriate option and
reflected the Board’s confidence in the performance of the firm.
D1 D3D2 D4
D1 D3D2 D4
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Employees
Why?
Our employees are integral to the success of the firm. Maintaining
and developing an engaged and motivated workforce, and strong
corporate culture allows us to continue to deliver excellent service
to our clients and maintain high standards of business conduct
throughout the organisation. Listening to and acting upon
employees’ views contributes to our ability to attract and retain
the best talent and support long-term success.
How?
In line with our workforce engagement model, Kate Barker and
Zoe Cruz, were the non-executive directors responsible for
leading employee engagement during 2021. They conducted
aseries of sessions with employees from different business units
across the firm and shared the feedback with the Board (further
information in the box adjacent). From March 2022, Ceci Kurzman
will assume employee engagement responsibilities from Zoe prior
to Zoe stepping down from the Board. Ceci will work with Kate,
who will continue in this role.
Luke Ellis continued to communicate with employees on a weekly
basis via email, providing updates on the market environment,
business performance and personal employee news. Virtual
sessions and Drive events were attended or hosted by directors.
The Board received regular updates on Man Group’s people and
culture and undertook a specific review of culture in the latter part
of the year. The Board was keen to hear about the roll-out of the
agile working model and its impact on employees.
Town hall sessions, hosted by our CEO and CFO, were held both
virtually and in-person (where possible). Significant focus was
given to firmwide performance and strategy following previous
feedback. Employees could ask questions and share their views
with directors. An employee engagement survey was conducted,
and the results were shared with and considered by the Board.
Employee engagement during 2021
The Board believes that employees’ views should be understood
and appreciates that a motivated workforce remains a key factor
of the firm’s success and competitive edge. Alongside regular
people and culture updates, the Board reviewed the output from
the discussions held with the designated workforce engagement
non-executive directors. Kate and Zoe shared feedback with
theBoard and highlighted that employees felt supported by
management, trusted management leadership and appreciated
the approach taken to agile-working and the efforts involved
intheLondon office redevelopment.
The Board took the decision to review the existing workforce
engagement model, comparing it to models adopted by other
FTSE 350 companies and best practice guidance. The review
also formed part of the 2021 external Board evaluation and
thefollowing points were agreed:
• The current model remained appropriate. It provided valuable
insight and allowed the Board to consider employees’ views
tobetter inform decisions. During 2021, this was particularly
important when reviewing return-to-office plans and the
long-term future of working arrangements for employees.
• Reporting to the Board would continue on a bi-annual basis,
detailing employees’ views on key themes tabled for discussion
at Board meetings throughout the year.
• Additional methods of engagement would be considered
bytheBoard.
Progress against previous key themes:
The Board has reflected upon the key themes identified as areas
of focus during previous engagement sessions with employees
and as a result, has undertaken the following:
• Held additional town halls throughout the year focused on
strategy and growth to address the feedback from employees
to hear directly from the Board on these topics.
• Committed to hold at least one Board meeting a year in the
Company’s US offices. This has not been possible due to
COVID however, going forward the Board will use this an
opportunity to increase its exposure to US employees.
Outcomes
• The Board held a deep-dive discussion on protecting the firm’s
culture following the transition to agile-working.
• The Board discussed the redesign of Man Group’s London
office to deliver creative and collaborative spaces with
employee well-being in mind.
• The Board challenged the effectiveness of the workforce
engagement model and the various changes that could be
made to enhance the process. Further details are set
outabove.
• The Board and senior management continued to act upon
feedback from employee engagement surveys to implement
positive change for employees. Key themes for improvement
were considered, including the additional ways in which staff
could be supported in their professional development and how
to maintain a motivated workforce.
• The Board remains supportive of the firm’s diversity, equity and
inclusion initiatives and schedules regular updates from relevant
teams across the firm.
82
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Communities
Why?
We have a responsibility to contribute to the local communities
inwhich we work and have multiple initiatives in place to support
this aim.
How?
The Board actively encourages, supports and monitors progress
on initiatives that it believes will have a positive impact on the
communities in which Man Group operates. The Board considers,
and is updated by management, on the firm’s contributions
tocommunities via charitable partnerships and donations,
responsible investing initiatives and volunteering opportunities for
employees (operated by the firm’s ManKind programme). In 2021,
the Board undertook a specific review of Man Group’s culture
which included details of charitable donations and partnerships.
Outcomes
• c.£484,000 donated following a dividend forfeiture programme
(more detail in the box adjacent).
• Every employee offered the opportunity to expense a £400
donation to a local food bank or homelessness support charity.
Over £300,000 was donated by employees in advance of
Christmas 2021.
• $4 million donated to the Man Charitable Trust.
• 1,200+ hours of time volunteered by Man Group staff as part
ofits ManKind offering to employees. Employees are entitled
totwo paid volunteering days per year. More detail on ManKind
can be found on page 43.
• Man Group continued to be a signatory to the Women in
Finance Charter and the Race at Work Charter, and is a
member of the 10,000 Black Interns, the City Gateway, the Girls
Are Investors Network and the Young Women’s Leadership
Network programmes.
• Ongoing work with a number of schools and charities, including
the King’s Maths School (UK) and the Codman Academy (US).
• Man Group CSR brochure published in February 2021.
Principal decision: unclaimed dividend donation
In February 2021, the Board approved that the proceeds from
unclaimed dividends be donated to the UK Charitable Trust.
Inlinewith the Company’s Articles of Association, dividends
which remained unclaimed by shareholders for over 12 years can
be forfeited and the value returned to the Company. The Board
considered the impacted stakeholders, primarily the impacted
shareholders and the communities that stood to gain from the
donation, and determined that the decision was in the best
interests of the Company and its stakeholders as a whole.
Asaresult of this decision, c.£484,000 was donated.
Our key stakeholders cont.
Stakeholder engagement continued
D1 D3D2 D4
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Man Group plc | Annual Report 2021
Environment
Why?
Man Group recognises the need to be a good corporate, global
citizen and responsible investor.
How?
The Board has responsibility for the oversight of Man Group’s
environmental impact and monitors progress made against
targets. It regularly discusses ESG and climate-related matters
and is provided with updates from senior management
throughout the year. The firm is an active member of industry
groups including the IIGCC, Climate Action 100+, Carbon Pricing
Leadership Coalition and is a signatory to the UN-supported
Principles for Responsible Investment, amongst others. More
detail can be found in the box adjacent and in the sustainable
business section on pages 46 to 60.
Outcomes
• ESG matters discussed at the majority of Board and ARCom
meetings during 2021. More detail on our approach can be
found in the Responsible Business section on pages 46 to 60.
• The Board approved the addition of ESG-integrated AUM
asanon-financial KPI.
• The Board agreed that executive director short and long-term
variable pay would include ESG-related objectives and metrics
as an additional way to demonstrate the firm’s commitment
toESG and alignment with our clients’ responsible investing
priorities. More detail can be found in the Directors’
Remuneration report on pages 103 to 105.
• Man Group joined the Net Zero Asset Managers initiative and
committed to reducing greenhouse gas emissions to net zero
ininvestment portfolios by 2050 and achieving net zero in our
global workplaces by 2030.
• Man Group became a participant in the UN Global Compact.
ESG
Our approach to ESG reflects the values we have as a firm and
forms part of our wider strategic objectives. Businesses
worldwide are making progress on determining what ESG means
to them and Man Group is no different. ESG matters are driven at
all levels of the firm and feature in many of the 1,500 management
meetings we have each year.
We have established an executive ESG governance framework
tosupport the delivery of our ESG strategy as both a corporate
and as an investor. We have continued to integrate ESG into
ourinvestment processes in line with client demand, with ESG
integrated AUM of $55.2 billion. Senior management and
individual portfolio managers are in frequent dialogue to ensure
aconsistent, coherent approach to achieving ESG targets.
We are proud of the focus that ESG has had within the firm
duringthe year, and look forward to our continued development
inthis area.
+ More detail can be found in the Responsible Business section
onpages 46 to 60
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Man Group plc | Annual Report 2021
Business Partners
and Suppliers
Why?
Good relations with business partners and suppliers are essential
to the firm’s effective day-to-day operation. ManGroup holds itself
to high standards of business conduct and integrity and it expects
its suppliers and business partners to do the same.
How?
The Board has limited direct engagement with its suppliers
anddelegates direct engagement and oversight to senior
management.
We have in place a structure comprised of various committees
and policies, which together govern our approach to the risk
management of, and engagement with, suppliers.
The Board, via reporting from the ARCom, is kept updated on
thedevelopment of any key supplier risks. Timelines of payments
to suppliers are tracked on a monthly basis in the UK, the firm’s
main country of operation.
A dedicated cyber security team oversees and assesses our
suppliers to ensure they are compliant with the firm’s cyber
security requirements and the Board is kept informed of any
developments via the Audit and Risk Committee.
The Board reviews ManGroup’s engagement with its broader
supply chain as part of its annual approval of the Modern Slavery
and Transparency Statement.
Adoption of a new Supplier Code of Conduct
During the year a Supplier Code of Conduct was formalised
whichrecognised the increasing importance of aligning our
ownpractices designed to promote the highest standards of
excellence, business conduct and integrity with our business
partners and suppliers.
The Supplier Code of Conduct was communicated by the firm
tobusiness partners and suppliers during 2021 to ensure a
collaborative effort towards best practice.
HUB technology Joint Venture
In early 2021, Man Group announced that it would be entering
into a joint venture with PIMCO, State Street, IHS Markit, Microsoft
and McKinsey to form a new technology-led company, HUB,
tobuild a cloud-based operating platform aimed at transforming
asset managers’ operations technology. The Board invited
theteam from HUB to present on progress achieved to date,
growth plans and expected timelines, resourcing and investment
requirements and key risks and opportunities. A further update
isplanned to take place during 2022.
Our key stakeholders cont.
Stakeholder engagement continued
Outcomes
• The Board received metrics on suppliers via monthly Board
reporting.
• The Board received an update on the HUB joint venture which
was announced in early 2021 (further details are set out above).
• A new Supplier Code of Conduct was adopted by Man Group
and communicated to our business partners and suppliers
during 2021 in order to promote a sustainable business strategy
and high standards of business conduct (further details are set
out above).
• Man Group remains a signatory to the Chartered Institute
ofCredit Management Prompt Payment Code.
• Where unresolvable issues arose with existing suppliers,
theBoard was made aware via the Audit and Risk Committee
of the transition ofbusiness activities to new partners. For
further information please see page 94.
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Man Group plc | Annual Report 2021
Regulators
Why?
The firm’s products and services are regulated by various global
regulators. Man Group is committed to compliance with its
regulatory obligations and maintaining open and collaborative
communication with its regulators. We are confident that our
employees maintain the highest standards of conduct, which
inturn help us to meet our regulatory compliance obligations.
How?
ManGroup maintains regular contact with all applicable regulators
and keeps them apprised of any upcoming matters of note.
The compliance function has delegated responsibility for
day-to-day regulatory reporting matters. The Board and Audit and
Risk Committee receive regular updates from senior management
on upcoming matters introduced by regulators that require action.
Outcomes
• Regulatory priorities regularly discussed at Board and Audit
and Risk Committee meetings.
• Continuous building on engagement within the firm on
regulatory matters, e.g. compulsory annual training, takes place
on the Senior Managers and Certification Regime.
• Implementation of updated governance arrangements within
Man Group to ensure compliance with the Investment Firms
Prudential Regime by 31 December 2021, as it applies to MiFID
investment firms, capturing certain Man Group subsidiaries.
• Completion of a firmwide project covering the impact of the
phase out of the use of LIBOR.
BEIS consultation
Hand in hand with ensuring that Man Group is compliant
withregulatory requirements, is ensuring that we are on the
frontfoot when new legislation or regulation is proposed by
thegovernment.
During 2021, Man Group actively engaged with the Department
for Business, Energy and Industrial Strategy (BEIS) regarding its
consultation on restoring trust in audit and corporate governance
(the BEIS Audit and Governance Consultation). The firm prepared
its own response for BEIS, which was discussed by the Board,
and reviewed and provided input into the draft responses
prepared by the GC100, the Corporate Governance Institute
andthe Investment Association.
Following significant discussion, the Board approved a largely
favourable response to the consultation, also providing BEIS
withthe firm’s view of audit and governance best practice,
andchallenge on areas that required improvement to ensure
theeffective implementation and operation of the proposals.
Formore information, please refer to the Audit and Risk
Committee report on pages 90 to 96.
High standards of business conduct
As an asset management company, it is vital that our workforce
act with a high degree of integrity in accordance with our
published business principles. The Board is responsible for
determining the Company’s values and leading by example
toinstil a positive culture throughout the organisation which
reflects a reputation of adhering to high standards of conduct.
Thepolicies and practices set out on page 66 support Man
Group in upholding these standards.
The Board receives updates regarding corporate culture at
eachBoard meeting as part of the CEO Report and undertook
aspecific review on culture in December 2021. The Board
received updates on employee engagement, the output of the
2021 employee survey and feedback following engagement with
the designated employee engagement non-executive directors.
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Man Group plc | Annual Report 2021
Board oversight, challenge and decision-making
During the year the Board held eight formal meetings. As a result
ofthe COVID-19 mandated restrictions, four of these were held as
virtual meetings, one was held with all members physically present
and three were held as hybrid meetings. The Board also held two
strategy sessions during 2021. Attendance at these meetings
issetout on page 68.
The Board invites non-Board members of the Senior ExCo to attend
Board meetings in order to give further detail and management
perspective on matters discussed; whilst they help shape
conversation, they do not directly participate in any decision-making.
The Board meets regularly with, and seeks input from, senior
management, subject matter experts and representatives from
keyteams, enabling Board members to build their understanding
ofMan Group as well as sector issues and opportunities.
The Board considers the impact on its stakeholders as part of its
decision-making process. Further details on these groups, together
with how the Board engages with stakeholders and key outcomes
during 2021, are set out in the stakeholder engagement section
onpages 78 to 85.
Board meetings are conducted on the basis that all written materials
submitted are thoroughly reviewed by Board members in advance
tomaximise the opportunity for discussion at meetings. The
non-executive directors challenge proposals and approaches
presented by management and draw on their experience to suggest
alternative approaches or ideas that management may not have
considered. Board meetings are effectively chaired and structured
ina manner that allows all views to be expressed and heard.
The Board and TCFD
• The Board has collective responsibility for providing climate-
related oversight and setting the firm’s climate strategy.
Thefirm’s Audit and Risk Committee has delegated authority
toensure compliance with regulations and disclosures related
to climate, sustainability and ESG. The Audit and Risk
Committee makes recommendations to the Board as
necessary. Senior management are responsible for
implementing the climate strategy as set by the Board and
anESG governance structure has been established – more
detail can be found on page 47.
• The Board considered various options regarding its ESG
oversight arrangements, including the possibility of introducing
a dedicated ESG Committee or appointed designated ESG
non-executive director. After significant discussion, it was
agreed that responsibility for ESG should remain with the
Boardas a collective.
• ManGroup’s Audit and Risk Committee and Board discussed
climate-related matters or expressly considered climate as a
factor in its decision-making at the majority of meetings in 2021.
• The Board regularly considers climate impact when conducting
its oversight and decision-making role against a broad range of
matters, including strategic planning, budget planning, resource
allocation, setting performance objectives and overseeing
capital expenditure.
• The Board sets long and short-term climate-related objectives
andmonitors progress made against these objectives, including
climate targets. Examples include the introduction of ESG-
integrated AUM as both a non-financial KPI and as a metric
intheexecutive directors’ short and long-term remuneration
arrangements and the ongoing monitoring of progress in relation
to the firm’s net zero commitments.
Board responsibilities
Chair Chief Executive Officer (CEO) Chief Financial Officer (CFO) Senior Independent
Director
Non-executive directors Company Secretary
• Leads the Board, sets its agenda
and ensures it discharges its
role effectively
• Supports and constructively
challenges the CEO, promotes
effective relationships between
executive and non-executive Board
members, and creates a culture
of open debate
• Leads, with the support of the
Nomination Committee, effective
Board succession planning and the
search for and appointment of new
directors, taking account of the
need for the development of Board
skills, experience and diversity
• Ensures that the Board maintains
effective engagement with
shareholders and takes account
ofthe interests ofallstakeholders
inits decisionmaking
• Has responsibility for the day-to-day
management of the business
with appropriate delegated
authorities, risk management
and internal controls
• Develops, for Board approval,
business strategy and management’s
delivery againstit
• Leads the Senior Executive
Committee (see page 74), which
isresponsible for developing and
implementing the firm’s strategy
• Communicates a shared purpose
and set of businessvalues and
buildsmanagement talent
• Works closely with the Chair and
leverages the knowledge of
non-executive Board members
• Maintains an effective dialogue with
shareholders on the Company’s
strategy and performance
• Manages the allocation and
maintenance of the firm’s capital,
funding and liquidity in accordance
with regulatory requirements
• Has responsibility for the preparation
and integrity of the firm’s financial
information and its reporting
• Leads the development of annual
budgets and Medium Term Plans
forBoard approval
• Has responsibility for the firm’s risk
management within the Board’s risk
appetite statements
• Maintains an effective dialogue
withshareholders and stakeholders
on the performance and financial
structure of the firm
• Has responsibility for and leads
thefirm’s corporate development
strategy, including merger and
acquisition activity
• Maintains a broad overview
of the work of the Board
anditsCommittees
• Provides a sounding board for,
and advice to, the Chair on Board
matters including development
and succession planning
• Acts as a point of contact for
communications with the
non-executive directors asrequired
• Leads the annual performance
evaluation of the Chair
• Leads the search for the
appointment of a new Chair
• Engages with shareholders
• Contribute and provide
constructive challenge to the
development of business strategy
• Contribute to the identification of
principal business risks and the
determination of risk appetite
• Monitor and challenge
management performance
indelivering business strategy
andobjectives
• Monitor and challenge the
effectiveness of the internal control
and risk management framework
• Monitor the Company’s compliance
with the regulatory principles and
requirements impacting asset
management and distribution
• Review and challenge, prior
topublication, the Company’s
financial statements and
announcements
• Keep Board composition and
succession planning under review
in light of changing business needs
and recommend any changes
tobe considered
• Advises the Board on corporate
governance matters, ensuring
good governance practices
• Supports the Board and
Committees in discharging their
respective roles
• Maintains the books and records
ofthe Company and prepares
minutes of Board and Committee
meetings
• Facilitates the induction, and
ongoing training and professional
development, of non-executive
directors to support them in
carrying out their responsibilities
• Monitors and ensures compliance
with company law, Listing Rules,
Disclosure Guidance and
Transparency Rules and the Market
Abuse Regulation
• Organises ManGroup plc’s AGM
and other shareholder meetings
• Acts as the main point of contact
for retail shareholders
A talented and effective Board
Board effectiveness
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Man Group plc | Annual Report 2021
Board responsibilities
Chair Chief Executive Officer (CEO) Chief Financial Officer (CFO) Senior Independent
Director
Non-executive directors Company Secretary
• Leads the Board, sets its agenda
and ensures it discharges its
role effectively
• Supports and constructively
challenges the CEO, promotes
effective relationships between
executive and non-executive Board
members, and creates a culture
of open debate
• Leads, with the support of the
Nomination Committee, effective
Board succession planning and the
search for and appointment of new
directors, taking account of the
need for the development of Board
skills, experience and diversity
• Ensures that the Board maintains
effective engagement with
shareholders and takes account
ofthe interests ofallstakeholders
inits decisionmaking
• Has responsibility for the day-to-day
management of the business
with appropriate delegated
authorities, risk management
and internal controls
• Develops, for Board approval,
business strategy and management’s
delivery againstit
• Leads the Senior Executive
Committee (see page 74), which
isresponsible for developing and
implementing the firm’s strategy
• Communicates a shared purpose
and set of businessvalues and
buildsmanagement talent
• Works closely with the Chair and
leverages the knowledge of
non-executive Board members
• Maintains an effective dialogue with
shareholders on the Company’s
strategy and performance
• Manages the allocation and
maintenance of the firm’s capital,
funding and liquidity in accordance
with regulatory requirements
• Has responsibility for the preparation
and integrity of the firm’s financial
information and its reporting
• Leads the development of annual
budgets and Medium Term Plans
forBoard approval
• Has responsibility for the firm’s risk
management within the Board’s risk
appetite statements
• Maintains an effective dialogue
withshareholders and stakeholders
on the performance and financial
structure of the firm
• Has responsibility for and leads
thefirm’s corporate development
strategy, including merger and
acquisition activity
• Maintains a broad overview
of the work of the Board
anditsCommittees
• Provides a sounding board for,
and advice to, the Chair on Board
matters including development
and succession planning
• Acts as a point of contact for
communications with the
non-executive directors asrequired
• Leads the annual performance
evaluation of the Chair
• Leads the search for the
appointment of a new Chair
• Engages with shareholders
• Contribute and provide
constructive challenge to the
development of business strategy
• Contribute to the identification of
principal business risks and the
determination of risk appetite
• Monitor and challenge
management performance
indelivering business strategy
andobjectives
• Monitor and challenge the
effectiveness of the internal control
and risk management framework
• Monitor the Company’s compliance
with the regulatory principles and
requirements impacting asset
management and distribution
• Review and challenge, prior
topublication, the Company’s
financial statements and
announcements
• Keep Board composition and
succession planning under review
in light of changing business needs
and recommend any changes
tobe considered
• Advises the Board on corporate
governance matters, ensuring
good governance practices
• Supports the Board and
Committees in discharging their
respective roles
• Maintains the books and records
ofthe Company and prepares
minutes of Board and Committee
meetings
• Facilitates the induction, and
ongoing training and professional
development, of non-executive
directors to support them in
carrying out their responsibilities
• Monitors and ensures compliance
with company law, Listing Rules,
Disclosure Guidance and
Transparency Rules and the Market
Abuse Regulation
• Organises ManGroup plc’s AGM
and other shareholder meetings
• Acts as the main point of contact
for retail shareholders
Diversity
The Board is a highly skilled, committed and diverse group of
individuals who are focused on understanding its own strengths,
challenges and operational style. The Board biographies on pages
72 to 73 and the analysis of the Board’s composition on page 69 give
an overview of the breadth, depth of talent and experience on Man
Group’s Board in terms of career, background, skills and diversity.
The non-executive directors bring diversity through wide-ranging
contributions and perspectives to Board review and decision-making
from their current executive or portfolio careers. A mix of short and
long tenure delivers fresh outlooks and challenge, complemented by
a longer-term understanding of the business and its people. In 2021,
the Board approved a revised Diversity Policy which articulates our
approach to Board diversity now and in the future. More information
can be found on pages 100 to 101.
Independence and time commitment
All of the non-executive directors are considered to be independent
and the Chair was considered independent on his appointment
tothe role. There are a number of ways in which the independence
ofour non-executive directors is safeguarded:
• meetings between the Chair and the non-executive directors
without the executive directors being present;
• meetings between each of the directors and the Senior
Independent Director to discuss feedback on the performance
ofthe Chair;
• separate and clearly defined roles for the Chair and CEO
(as set out below); and
• formal review of independence as part of the process for renewing
the appointment of non-executive directors.
To avoid the ‘over-boarding’ of our directors and minimise potential
conflicts, all Board members are required to inform the Chair of any
updates or changes to their external roles, including an indication of
the expected time commitment for any new external role so that an
assessment can be undertaken as to whether the director will continue
to have sufficient time to adequately discharge their duties as a director
of ManGroup. Any proposed appointments that are considered to
besignificant positions or represent potential conflicts will be assessed
by the Board and a decision taken on the extent to which any such
conflicts can be effectively managed. No additional significant external
appointments were undertaken by Board members during the year.
Inaddition, in recognition of the wide-ranging roles and interests of
thenon-executive directors, the Board carries out a formal bi-annual
review of all such roles and interests to ensure that they do not
represent any unmanageable business conflict or a time commitment
which might prejudice directors’ effective contribution to the Board.
Before appointing a new Chair or non-executive director, consideration
will be given to the prospective director’s other appointments and
interests to ensure that they have sufficient time to dedicate to their
roleas a director of ManGroup. The letters of appointment of the Chair
and non-executive directors contain provisions around the expected
time commitment to ManGroup related activities.
Board induction process
All non-executive directors receive a comprehensive and tailored
induction to the business and, if required, the asset management
industry. All induction programmes are structured around one-to-one
briefings with the Senior Executive, Executive Committee members
and the Company Secretary. Relevant briefing materials are
circulated in advance and follow-up meetings arranged as
appropriate. New Board members are invited to provide feedback on
the programme they receive to ensure it is useful and well targeted.
They are also encouraged to seek updates on any topics which arise
in the course of subsequent Board meetings on which they would
like further information. Details of the induction programme for
non-executive directors are given on our website. Executive directors
receive an induction which takes account of their existing skills,
knowledge and experience. Our new CFO, Antoine Forterre, was
promoted internally and due to his pre-existing understanding of the
business, had an induction that was tailored accordingly. Jackie
Hunt, who was appointed to the Board on 28 February 2022, will
receive a tailored induction during the course of March and April 2022.
Continuous development of the Board
Our induction programme is the first step in building directors’
understanding of the business. The Board is kept updated on key
areas of the business and upcoming regulatory changes through
thefollowing methods:
• briefings included within Board papers;
• presentations from senior management and other employees
onspecific issues; and
• educational sessions from internal subject matter experts
andexternal advisers.
The main training topics covered during the year were:
• the hedge fund industry, investor sentiment and industry trends;
• perspectives on the competitive landscape; and
• ESG, stewardship and responsible investing.
In addition, opportunities continued tobe made available to non-
executive directors to attend seminars and workshops virtually
ontopical business and regulatory issues offered by professional
services firms and law firms.
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Governance
Man Group plc | Annual Report 2021
Progress on actions agreed in 2020 Board evaluation
Area of assessment Agreed actions Progress made
Strategy
• Additional focus to be given to strategic oversight in2021. • Two strategy sessions held in 2021 – one in Q1 and one
inQ2. Key areas of discussion included investment engine
strategies and the approach to M&A.
People
• Agreed that the Board should formally review the current
employee engagement model in 2021 and consider alternative
options to ensure that the Board is able to engage with
employees in the most effective way.
• The Board reviewed the employee engagement model in Q3
and, having considered alternative arrangements, concluded
that having two designated NEDs leading employee
engagement was the most appropriate model for the firm.
Bi-annual reports covering all NED employee engagement
activity will continue to be provided to the Board.
Succession planning
• Further focus to be given to succession planning during 2021. • The Nomination Committee and Board held several sessions
on succession planning and the underlying processes during
the year. The development of a skills matrix following the
Board effectiveness evaluation will support the continued
focus on succession planning in 2022 and beyond.
Decision-tracking
• Review the ‘lessons learned’ from the corporate reorganisation
completed in 2019.
• The review was held in Q2. The effects of the restructure
were reviewed against four categories: strategic impact;
financial impact; external impact; and internal impact. The
Board remains confident in the decision and the benefits
ofthe restructure.
Shareholder/
stakeholder
relationships and
competitors
• Board session to be arranged in 2021 focusing on investor
relationships. Regular updates focusing on key clients to be
reintroduced and specific session oncompetitor dynamics
tobe arranged.
• The Board received an external view of the hedge fund
industry in Q2 and considered perspectives of the
competitive landscape in Q4. In addition to the regular
reporting on changes to the shareholder base, a specific
session on investor engagement was held in Q2. Deep-dives
on key client relationships were undertaken in Q2 and Q3.
Key findings
• Board and Committee performance is strong, members are engaged
andsupported by a well-established executive team.
• ManGroup’s gender parity on the Board remains unusual in the FTSE 350.
Cognitive diversity and Board members’ varied background and experience
makes for aBoard that approaches decision-making in an open and
constructive way, allowing for focused challenge and discussion.
• Papers and presentations were of a high quality and demonstrated a consistent
house style despite varied authorship.
• Succession planning and the balance of Board and Committee composition
were identified as key areas of focus.
2021 external Board effectiveness evaluation process
Select external
facilitator
Initiate process
with facilitator
Collation of
responses
Chair review Discussion,
outcomes
andactions
The Board agreed to appoint
Clare Chalmers (CC), who has
no other connection with the
Company or any individual
director, to undertake the
external reviewduring 2021.
The remit, process and timing
of the review were agreed
between the Chair, Company
Secretary and CC. A list of
broad areas and questions
that would form the basis of
the interviews with Board
members, Senior ExCo, the
Company Secretary and other
key stakeholders was agreed.
CC also agreed to review key
documentation (e.g. Terms
ofReference and a sample of
Board and Committee packs)
and attend and observe
several Board and
Committeemeetings.
The interviews were
conducted, theBoard
andCommittee meetings
attended and key
documentation reviewed.
Adraft report was prepared
which included an executive
summary and detailed
commentary against 15
agreed areas offocus.
Thedraft report was
sharedwith the Chair
andCompany Secretary.
The Chair and Company
Secretary met with CC to
discuss the draft report, and
a final report reflecting their
comments was circulated
to the Board for review.
CC shared the findings of
thereport with the Board.
TheBoard and Board
Committees discussed the
specific findings of the review
in their respective meetings,
and actions and action
owners were agreed upon.
Anupdate on progress
against key actions was
discussed at the following
Board meeting. Key findings
are set out below and
development areas
overleafon page 89.
1 2 3 4 5
Determining Board effectiveness
Board evaluation
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Man Group plc | Annual Report 2021
Summary of 2021 external effectiveness development areas
The results of the Board’s external effectiveness evaluation were positive and demonstrated an effective, well run and diverse Board. Development areas
were also proposed and actions were agreed.
Area of assessment Key findings Agreed actions
Succession planning
Review skills composition. Decided to design
andimplement a skills matrix to assess the current
capabilities of the Board and future desirable skills.
• A skills matrix was developed and completed in 2021
following the evaluation (see table below). The Chair held 1:1
meetings with the Board members to discuss responses
andthe results were shared with the Nomination Committee
onacollated and anonymised basis.
• A review was undertaken by the Nomination Committee
inDecember 2021 to discuss future skills and experience
required on the Board resulting in the appointment of a new
non-executive director on 28 February 2022.
• Succession planning will be formally considered by the
Nomination Committee at least bi-annually, with additional
meetings asrequired in 2022.
Committee composition
Consider extending membership of the Nomination
Committee and Audit and Risk Committee.
• Kate Barker was appointed to the Audit and Risk Committee
in December 2021. Jackie Hunt was appointed to the Audit
and Risk Committee on 28 February 2022.
• Agreed that the Nomination Committee retain its current
membership but reporting to the Board would be enhanced.
Board training and
development
Develop bespoke training programme for existing
directors, as well as senior management (where
appropriate) to support ongoing development
ofBoardmembers.
• The skills matrix results will be used to develop a bespoke
Board training programme in 2022, tailored to each
director’sneeds.
• Induction programme will be extended to non-Board
members of the Senior ExCo.
Strategy
Consider introducing further data/metrics when
assessing performance against strategy.
• Senior management will give consideration to theuse of
additional data as part of strategic performance reporting
in2022.
Aggregated skills and experience of Board members as at 31 December 2021
Finance/Audit
Strategy/M&A
Cyber security
Legal
HR/Reward
Communications/Marketing
Risk management
ESG
Operations
Compliance/Regulatory
Technology
International markets
Key to skills and experience:
Considerable experience
Limited experience
No direct experience
1.
Risk management 54%
2.
Financial reporting 18%
3.
External audit 19%
4.
Internal audit 9%
Proportion of the committee time
spent on key responsibilities
1
2
3
4
90
Governance
Man Group plc | Annual Report 2021
Audit and Risk Committee report
Summary of the ARCom’s main
activities during 2021
• Monitored the integrity of the financial
information within ManGroup’s 2021 interim
andannual financial statements and challenged
the key accounting policies, judgements and
estimates adopted by management.
• Considered whether the firm’s 2021 interim
financial statements and Annual Report were
fair, balanced and understandable, and
recommended their approval to theBoard.
• Monitored and reviewed the effectiveness
ofthefirm’s risk management systems
andinternal controls.
• Conducted a robust assessment of key risks,
including cyber, ESG and agile working.
Considered management and mitigation
measures.
• Approved the 2021 Internal Audit Plan and
conducted an internal effectiveness review
ofthe Internal Audit function.
• Received regular updates on the progress of
Internal Audit reviews and monitored
management’s response toaddress actions.
• Recommended the reappointment and
approved the remuneration of Deloitte LLP
(Deloitte) as external auditor.
• Oversaw the transition of the lead audit
engagement partner at Deloitte and approved
the 2021 External AuditPlan.
• Oversaw the transition plan for the appointment
of the new CFO.
• Provided input to the firm’s response to the BEIS
Audit and Corporate Governance Consultation.
Dear Stakeholder
I am pleased to present the report of the
Audit and Risk Committee (the ARCom).
TheARCom plays a key role in assessing the
integrity of ManGroup’s financial reporting,
monitoring the effectiveness of the firm’s
systems and processes of risk management
and internal controls, and reviewing and
monitoring the activities of the Internal
Auditfunction and theexternal auditor.
I would like to welcome Kate Barker
andJackie Hunt, who became members of
the ARCom in December 2021 and February
2022 respectively. Kate brings
vastexperience and insight, from which the
ARCom has already benefited in the short
period since her appointment as a member
and I look forward to working with Jackie.
Iwish to thank Mark Jones for his work
supporting the ARCom during his tenure as
CFO. In advance ofhis retirement from the
Board following the 2022 AGM, I would also
wish to thank Dev Sanyal for his valued
contributions to the ARCom during his time
as a member of the Committee.
Key achievements for 2021
The ARCom has had to refocus its priorities
toconsider the continued impact of the
COVID-19 pandemic. We devoted significant
time to considering the impact ofthe new
agile working model on ManGroup’s risk
and control environment. We evaluated
areas of new and heightened risk, and
assessed the controls that had already
beenimplemented to manage the impact
ofthe remote working environment.
The ARCom has also remained alert to
thechanging regulatory environment.
Inaddition to carefully monitoring ESG
regulatory developments, the ARCom
committed significant time to considering
thefirm’s ESG risk monitoring and
governance framework. The ARCom also
oversaw management’s approach to the
expansion of disclosures within our Annual
Report through TCFD andESG metrics.
TheARCom plays a key role in assessing the integrity of
ManGroup’s financial reporting, monitoring the effectiveness
ofthe firm’s systems and processes of risk management and
internal controls, and reviewing and monitoring the activities
ofthe Internal Audit function and theexternal auditor.
Lucinda Bell | Chair, Audit and Risk Committee
We also undertook areview of the BEIS
Audit and Governance Consultation
proposals, providing input for ManGroup’s
response.
Following the appointment of Antoine
Forterre as the new CFO of ManGroup,
theARCom oversaw the transition plan
toensure an effective handover from
MarktoAntoine.
Focus areas for 2022
For 2022, as well as considering the standing
items of business, the ARCom will focus
onthe following areas:
• monitoring the risks presented by
continued agile working to ensure
appropriate risk management measures
are in place;
• monitoring developments in respect of
thefuture of the UK audit and financial
oversight regime following the outcome
ofgovernment consultation;
• developing an audit and assurance policy
that describes the firm’s approach
toseeking assurance of its reported
information;
• overseeing the implementation of
ESGriskand monitoring governance
arrangements;
• ensuring that the balance between
auditand risk matters considered
bytheARCom remains appropriate.
• progression of audit tender planning; and
• review of cyber security reporting and
controls framework.
I hope you find this report a useful insight
into the work of the ARCom and I look
forward to continuing our work in 2022.
Lucinda Bell
Chair, Audit and Risk Committee
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Man Group plc | Annual Report 2021
Membership
The members of the ARCom are Lucinda Bell (Chair), Dev Sanyal,
Richard Berliand, Kate Barker and Jackie Hunt.
The ARCom as a whole has a combined skillset relevant to the sector
in which the Group operates and Lucinda, as Chair of the ARCom,
has recent and relevant financial experience for the purposes of the
2018 UK Corporate Governance Code (the Code). Further details
ofthe ARCom members’ experience and areas of expertise are
provided on pages 72 and 73.
The Board Chair, CEO, CFO, and Group COO & General Counsel
(who is also Head of ESG and Head of ManGroup US) are invited
toattend ARCom meetings along with the Head of Internal Audit
andrepresentatives from Deloitte, in their capacity as ManGroup’s
external auditor. Other members of the management team attend for
those items that are relevant to them. The ARCom meets periodically
during the year with the Head of Internal Audit andrepresentatives
from Deloitte without management present.
How the ARCom operates
Forward agenda • Covers key events in the financial reporting cycle, specific risk matters and standing items set out in the terms of reference.
• Reviewed as part of an open discussion with ARCom members andupdated in response to changing business risks andpriorities.
Agenda setting meeting • Held in advance of each ARCom meeting to identify key issues impacting the business that may require consideration
bytheARCom.
• Attended by the ARCom Chair, CFO, Group COO & General Counsel (alsoHead of ESG and Head of ManGroup US),
HeadofInternal Audit, representatives from Deloitte and the ARCom Secretary.
Briefing sessions • Prior to each ARCom meeting, theARCom Chair meets with the ARCom Secretary to discuss the papers, consider any particular
matters ofconcernand identify those matters which require meaningful discussion at ARCom meetings. The ARCom Chair also has
one-to-one briefings with the presenters where necessary.
Committee meetings At each meeting, the ARCom considers:
• standing governance items;
• regular dashboards and/or metrics which highlight and monitor changes in the key risks impacting the business, compliance
matters, the financial controls framework and internal controls; and
• reports and presentations on key financial reporting, risk, compliance and audit matters from management.
Board reporting • The Board is updated by the ARCom Chair on the key areas of discussion with recommendations made as appropriate.
Training • ARCom members periodically attend training sessions delivered by industry experts on audit and regulatory matters as well as other
matters of interest. In November 2021, a training session was facilitated for ARCom members on the ESG regulatory landscape.
Thesession was also attended by members of the Board.
Roles and responsibilities
Financial reporting • Review the integrity of the Company’s interim and year-end financial reports and statements, and recommend their approval to the
Board.
Risk management, internal
controls and compliance
• Review and report to the Board on the effectiveness of the firm’s systems of risk management and internal controls.
• Review the effectiveness of the firm’s Compliance function, regulatory reporting activities and channels available for its workforce to
raise concerns.
Internal Audit • Approve the annual Internal Audit Plan and review the effectiveness of theInternal Audit function and management’s response to their
findings.
External audit • Recommend to the Board the appointment, and approve the remuneration, of the external auditor, including reviewing the external
auditor’s effectiveness and independence.
Roles and responsibilities
The ARCom is fundamental to ManGroup’s governance framework
through its monitoring of financial reporting, the relationship with the
external auditor, the effectiveness of risk management and internal
controls, and the monitoring of the Internal Audit and Compliance
functions. Ahigh-level summary of the ARCom’s roles and
responsibilities is outlined below, together with an explanation of
howithas discharged its responsibilities during the year. Full terms
ofreference for the ARCom, which are reviewed on an annual basis
and were referred to the Board for approval in December 2021,
areavailable on the Company’s website.
How the ARCom has discharged itsroles
andresponsibilities
Financial reporting
Key accounting judgements and estimates
As part of the process for monitoring the integrity of the financial
information contained in the interim and annual financial statements,
the ARCom reviewed the key accounting policies, judgements and
estimates adopted by management and confirmed that these were
appropriate. Thesignificant areas of judgement and estimation
identified by the ARCom, in conjunction with management and
theexternal auditor, are set out in the table onpage 92 to 93.
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Audit and Risk Committee report continued
Key accounting judgements and estimates
Matters considered Action Outcome
Impairment assessment of goodwill
The cash-generating units (CGUs) for the liquid asset
managers (Man AHL, Man GLG, Man Numeric and
Man Solutions/FRM) have been grouped for goodwill
impairment testing purposes as a result of the
completed integration of legacy acquisitions and the
cohesion of Man Group’s liquid investment offerings.
Testing for impairment is undertaken at least annually
through the application of a ‘value in use’ model.
Thisrequires estimates concerning future cash flows,
growth rates and associated discount rates to be
taken into account.
Please refer to Note 19 in the Group financial
statements for further details
The ARCom considered reports from management
outlining the methodology for the impairment
assessment and challenged the assumptions
underpinning the goodwill valuation model including
cash flow projections, discount rates, the cost
allocation methodology, and levels of headroom
availability. They also considered whether the
assessment of goodwill for impairment at a combined
CGU level was appropriate and satisfied the
requirements of IAS 36 ‘Impairment of Assets’.
The ARCom agreed that the combination of the
liquidmanager CGUs for the purposes of goodwill
impairment testing was appropriate. The ARCom noted
the levels of headroom across the liquid asset manager
CGUs, and reviewed the underlying forecasts, noting
that no impairment would have arisen should the liquid
managers have continued to have been assessed at
the individual CGU level. The ARCom also noted that
the goodwill relating to Man Group’s private markets
business (Man GPM) was fully impaired in 2020. The
ARCom agreed that it was appropriate that no
impairment was recognised for the year ended
31 December 2021.
Consolidation of investment in funds
Man Group holds seeding 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 Man Group and
therefore need to be consolidated into the financial
statements.
Please refer to Note 14.2 in the Group financial
statements for further details
The ARCom reviewed management’s assessment
ofany new judgements made in relation to the
assessment of investments Man Group is deemed
tocontrol in accordance with IFRS 10 ‘Consolidated
Financial Statements’.
The ARCom also considered the resulting complexity
this adds to the interpretation of Man Group’s results,
and the appropriateness of Man Group’s use of
APMs to address this (see below).
The ARCom concluded that it was satisfied with
management’s assessment of the entities which are
deemed to be controlled by Man Group and the
associated accounting treatment. 26 investments
havebeen consolidated on a line-by-line basis with
agrossing up impact on the balance sheet of
$273million.
Deferred tax assets (DTA)
Man Group has deferred tax assets in the US which
largely represent historical tax losses and future
deductions for amortisation of goodwill and other
intangible assets that will reduce the tax payable in
the US. The value of the US DTA recognised requires
judgement regarding the assessment of probable
future profits.
Please refer to Note 21 in the Group financial
statements for further details
The ARCom reviewed the assumptions underpinning
the future forecast profits which supported the
valuation of the US DTA and considered management’s
assessment of the expected timing of forecast profits,
including considering the expiry of certain US tax
losses over time.
The ARCom confirmed that it was satisfied that the
existing methodology continued to be appropriate.
Arelated income statement expense of $10 million
wasrecorded, made up of the consumption of available
assets and the impact of US tax rate changes totalling
$12 million, net of a $2 million credit arising on the
recognition of additional DTAs in respect of state
andcity tax losses as a result of increased US profits
in2021 and future forecasts which are expected
toaccelerate the utilisation of these in advance
oftheirexpiry.
Impairment of right-of-use (ROU) lease asset –
investment property
Man Group sub-leases a portion of its Riverbank
House premises and assesses at the end of each
reporting period whether there are any indicators
thatthe associated ROU lease asset may be
impaired. If any such indicator exists, the estimated
recoverable amount of the ROU lease asset is
calculated using future sub-lease cash flows.
Please refer to Note 18 in the Group financial
statements for further details
The ARCom discussed and challenged management’s
assumptions around the timing and rental rates which
drive future cash flows, in particular considering the
ongoing COVID-19 related uncertainty in the UK
commercial property market.
The ARCom confirmed that it agreed with
management’s judgements in determining that there
were no indicators of impairment in relation to the ROU
lease asset for investment property at 31 December
2021, and that therefore the impairment expense
recognised for the year ended is limited to the $3 million
impairment recorded in the interim results. The
impairment related to Man Group’s exit from a small
portion of the premises which was thus reclassified
asinvestment property and subject to the COVID-19
related impairment impacts initially applied to our other
sub-let space in 2020.
Pension valuation assumptions
Man Group has defined benefit pension plans in the
UK and Switzerland, which are well-funded and result
in a net pension asset. Judgement is required to
beexercised in terms of the actuarial assumptions
applied in valuing these, which determines the
carrying value on Man Group’s balance sheet.
Please refer to Note 24 in the Group financial
statements for further details
The ARCom discussed the pension valuation
assumptions applied by our external actuarial pension
experts, which were discussed and agreed with
management, noting that these are in the middle of
therange of established market practice and fairly
reflect the valuation of our pension assets and pension
obligations in accordance with IAS 19 ‘Employee
benefits’.
The ARCom confirmed that it agreed with the external
valuation assumptions applied in determining the
carrying value of the net pension asset, as set out in
Note 24 to the Man Group financial statements.
Alternative performance measures (APMs)
Man Group assesses its performance using a variety
of APMs, most significantly core EPS. The directors
focus on core profit as this reflects the revenue and
costs that drive Man Group’s cash flows and inform
the base on which its variable compensation
isassessed.
Please refer to pages 183 to 187 for further details
The ARCom reviewed and discussed the
APMs contained in the Interim and Annual Reports,
including the appropriateness of their definition and
application, and also considered a paper prepared by
management which compared core profit to operating
cash flows for the last five years. The ARCom
discussed the simplification of the APM metrics
disclosures in light of the roll-off of legacy non-core
profit streams, thus aligning the previous adjusted and
core measures for the first time in 2020, to better
facilitate interpretation.
The ARCom noted that core profit over the last five
years was broadly consistent with operating cash flows
and therefore concluded that the APMs, including core
profit, were appropriate, provided a fair assessment of
the core operating performance of the business and
were appropriately defined and reconciled to statutory
measures as disclosed on pages 183 to 187. The
ARCom concluded that an appropriate balance and
level of prominence was presented across statutory
and core measures.
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Man Group plc | Annual Report 2021
Key accounting judgements and estimates continued
Matters considered Action Outcome
Consideration of climate change impact on
accounting estimates and assumptions
The firm considers and assesses the impact of
climate change as part of its broader risk governance
framework which captures both short and longer
term risks. This assessment informs the firm’s
judgement as to whether climate change impacts the
accounting estimates and assumptions used in the
financial statements.
Please refer to Note 3 in the Group financial
statements for further details
The ARCom reviewed the firm’s climate risk
assessment and considered the possible impact of
climate change on accounting estimates and
assumptions.
The ARCom confirmed that there are no key
assumptions concerning the future or other key
sources of estimation uncertainty at the reporting date
that may have a significant risk of causing a material
adjustment to the carrying amounts of Man Group’s
assets and liabilities within the next financial year.
Viability and going concern
The ARCom reviewed the viability statement (as set out on page 31)
and the processes supporting the viability assessment. After
discussion and having considered the firm’s prospects, emerging and
principal risks, forecast capital position and liquidity resources and
requirements, the ARCom concluded that the three-year assessment
period, in line with the firm’s business planning horizon, continued to
be appropriate and recommended the draft viability statement to the
Board for approval.
The ARCom also reviewed the going concern disclosure (as set out
onpage 150), considering the implications of COVID-19 on the firm’s
business and reasonably foreseeable stressed scenarios, and
concluded that the firm and the Company had adequate resources
tocontinue in operational existence for the foreseeable future and
confirmed to the Board that it was appropriate for the Man Group
financial statements to be prepared onagoing concern basis.
Fair, balanced and understandable assessment
At the request of the Board, the ARCom reviewed the interim and
annual financial statements in conjunction with the narrative sections of
the Interim and Annual Reports to ensure that there was consistency in
the information reported, that sufficient weight had been given to both
positive and negative aspects of business performance, that therewas
an appropriate balance between statutory and adjusted performance
measures, and that key messages had beenpresented coherently.
The ARCom concluded that, taken as a whole, the Interim and Annual
Reports were fair, balanced and understandable and provided the
information necessary for shareholders, and other stakeholders,
toassess Man Group’s positionand performance, business model
and strategy.
Correspondence with the Financial Reporting Council (FRC)
The FRC Corporate Reporting Review team wrote to the Company
inDecember 2021 advising that they had conducted a review of
theCompany’s 2020 Annual Report. No questions or queries arose
from this review specific to ManGroup’s reporting that required
asubstantive response, however a limited number of disclosure
enhancements have been made in the Company’s 2021 Annual
Report in response to the findings ofthe review.
Risk management and internalcontrols
Monitor and review of risk and control environment –
keybusiness areas
Alongside ongoing monitoring of the COVID-19 pandemic, the ARCom
reviewed the implementation of Man Group’s new agile working model
and scrutinised therobustness of the control environment. During the
year, the ARCom devoted significant time tomonitoring ESG matters
and regulatory related developments, aswell as providing input to the
Group’s response to the BEIS Audit and Governance Consultation.
Key areas of discussion are set outopposite.
Agile working
The ARCom closely monitored 2021 management plans and progress
regarding the agile working model that was introduced across
ManGroup. There was particular focus on heightened risks posed
byoperating within a remote working environment and the mitigation
plan implemented by management to ensure controls remained
secure and effective. The ARCom focused on risks relating to
supervision and control, information security, andculturalrisks
arisingfrom the agile working model.
The ARCom discussed with management the controls that had been
implemented, many of which had been introduced initially in response
to the COVID-19 remote working environment and had operated
effectively. Given the success of these arrangements, they were
leveraged to support the transition to the agile working model,
withparticular emphasis placed byARCom on consideration
oftheappropriateness of suchcontrols on a longer-term basis.
The 2020 annual reporting cycle of the firm and associated external
audit by Deloitte in early 2021 exemplified the firm’s ability to operate
effectively within financial reporting processes and COVID-19
prompted controls. Controls put in place in the prior year ensured that
reporting and audit quality were maintained under the remote working
model, despite the restrictions in force at the time. As a pre-emptive
measure, a number of elements of year-end reporting were prepared
in advance and, where possible, deliverables were accelerated to
provide more flexibility for unforeseen events. Theadvance preparation
and detailed planning enabled the team’sdelivery of a smooth and
high-quality annual reporting andauditprocess.
ESG matters and regulatory developments
Regulatory developments and trends, on areas including ESG,
TCFD,the LIBOR phase out and IFPR, were all carefully monitored
bythe ARCom. At the October 2021 meeting, the ARCom reviewed
the ESG Risk Monitoring and Governance Framework, focusing in
particular on the governance and disclosure of ManGroup’s ESG-
integrated AUM data and greenhouse gas emissions to ensure that
arobust process underpinned the public disclosure of these metrics.
Inresponse to feedback from theARCom, KPMG were engaged
tocarryoutadditional assurance work in relation tothe preparation
ofthe Group’s greenhouse gas emissions disclosures.
The ARCom also provided feedback on Man Group’s TCFD
disclosures, which had been disclosed voluntarily in last year’s
AnnualReport ahead of mandatory disclosure in this year’s report.
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BEIS Audit and Governance Consultation
The ARCom reviewed the proposals set out in the BEIS Audit and
Governance Consultation and agreed that a response should reflect
ManGroup’s position as both a premium listed public company
aswell asanasset manager. In preparing the firm’s response,
perspectives of the external auditor were sought, whoprovided a
briefing on the proposed reforms, as well as insights into practical
implications of the proposals.
The ARCom resolved to introduce an Audit and Assurance Policy
during 2022 which would set out the Group’s approach to internal
and external controls, audit and assurance, including any external
assurance carried out beyond the scope ofthe annual statutory
audit.
Following discussion at the ARCom, management drafted a
response to the BEIS Audit and Governance Consultation which
wasthen reviewed and approved by the Board for submission.
Monitor and review of risk and control environment – key
functional areas
The ARCom also considered presentations from each of the firm’s
key functional areas.
Risk
At its May 2021 meeting, the ARCom received an update from the
Risk function and discussed its role in supporting Man Group’s
governance processes. The ARCom also monitored topical
investment risk issues throughout the year and considered any
impact to the firm’s operations and controls. Following discussion
ofhigh profile prime broker losses in Q1 2021, the ARCom endorsed
the decision by management to reassess and implement changes
tothe firm’s prime broker service providers, stressing the importance
of strong and effective counterparty relationships.
Also, in May 2021, an in-depth presentation was delivered to the
ARCom considering Man Group’s preparedness for a broad market
sell-off scenario in order to identify any areas where controls could
be strengthened to manage such an event should it materialise.
During the year, the ARCom reviewed proposed amendments to the
Risk Governance and Appetite Framework (theFramework), focusing
in particular on updates to the risk register to highlight a specific
category for climate change risk in order to align with the firm’s
principal risks assessment. The ARCom endorsed the revised
Framework and recommended it to the Board for approval (a
summary of Man Group’s risk appetite statements is available
ontheCompany’s website).
Finance
The ARCom received updates at each meeting from the CFO and
Group Financial Controller on the Finance function’s operations and
controls. During the year, the ARCom discussed the financial control
environment, personnel changes and resourcing levels within the
Finance team.
The ARCom received briefings on IFPR, which became effective
1 January 2022, and considered the capital and liquidity implications
for the UK/EEA sub-group arising from these proposals. In-depth
briefings were also provided to the ARCom on Man Group’s Treasury
operations and FXhedging procedures. Plans for the firm’s first
submission of its Annual Report in the new European Single
Electronic Format (“ESEF”) were also reviewed by the ARCom,
andadditional assurance work regarding ESEF was arranged with
Deloitte. At the December 2021 meeting, the Head of Tax was invited
to present on the firm’s tax position and the key projects undertaken
by the Tax team during2021.
Compliance
During the year, the Global Head of Compliance and Business
Operational Risk & Resilience presented the 2021 Compliance
Review. Particular focus was given to the LIBOR transition, SFDR
implementation, and suspicious transaction surveillance projects.
Consideration was also given to resourcing levels, global themes
around regulatory risk, current priorities of key regulators and
Compliance function led initiatives. The ARCom continued to monitor
steps taken by the management team to raise awareness of the
channels available to ManGroup’s workforce to raise concerns.
In addition, the Money Laundering and Reporting Officer (MLRO)
presented the 2020 Annual Report at the February 2021 meeting
and confirmed that ManGroup hadestablished and maintained
effective anti-money laundering and counter terrorist financing
systems and controls.
Technology
Senior representatives from ManGroup’s technology department
updated the ARCom on the key priorities for the firm’s trading
platforms and core technology, together with the associated risks
and mitigants, including planned improvements to the firm’s order
management systems, and efforts to access and attract a wider
range of talent in technology. Focus was also given to the initiatives
being undertaken to expand ManGroup’s remote working
capabilities, in line with the new agile working model, whilst
maintaining effective controls.
Cyber security
Cyber security remained an area of focus forthe ARCom throughout
the year and it continued to receive regular reports on key themes
and trends in cyber security. During the year, the ARCom received
the annual cyber risk review, which detailed the firm’s cyber controls
and assessed any current threats, as well as reportssetting out
notable events and the testing and initiatives undertaken by the team
during the course ofthe year. At its July and October 2021 meetings,
the ARCom conducted an in-depth assessment of the firm’s
response to a cyber event. They noted that there had been no
material client or operational impacts and ARCom agreed with
management’s assessment that all necessary actions had been
taken in response, and that the control environment remained robust
and continued to be subject to ongoing review and enhancement.
Ongoing monitoring of the Group’s systems of risk
management and internal control
The ARCom is satisfied that, through regular review of reports
anddashboards, in-depth assessment of key business areas and
functions, consideration of changes to the Risk Governance and
Appetite Framework and ongoing review of progress against the
Internal Audit Plan (asdescribed below), it is appropriately
monitoringthe ongoing effectiveness of Man Group’s systems of
riskmanagement and internal control. Further details can be found
intheRisk management section on pages 32 and 33.
During the year, a number of operational matters were reported to
the ARCom. These were discussed as necessary throughout the
year and papers summarising these matters were considered by the
ARCom at its February and December 2021 meetings. Whilst Man
Group sought to improve its processes in response to the matters
identified, they 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 operating
effectively. The ARCom also concluded that there were no specific
matters to bring to the Remuneration Committee’s attention which
may impact itsdecision on discretionary remuneration payments.
Audit and Risk Committee report continued
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Man Group plc | Annual Report 2021
Internal Audit
Internal Audit Plan
The Group’s Internal Audit function continues to be performed by
KPMG. The ARCom reviewed the proposed 2021 Internal Audit
Planand suggested amendments inorder to prioritise any areas of
perceived heightened risk arising from the COVID-19 remote working
environment and the transition to agile working. During the year, the
ARCom also reviewed and approved the 2022 Internal Audit Plan (the
2022 Plan) which included details of the planned audit reviews for
2022 and the team responsible for delivering the 2022 Plan, led by
StuartWooldridge.
The ARCom discussed Internal Audit reports presented by the
Headof Internal Audit at each meeting, reviewed progress against
the 2020 and 2021 Internal Audit Plan and monitored the closure of
management actions arising from Internal Audit’s recommendations
to address control enhancements. 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.
Effectiveness of Internal Audit function
During the year, a review of the Internal Audit function was
undertaken bythe ARCom in order to assess the effectiveness of
theInternal Audit function. The review, which was facilitated internally,
evaluated areas such as resourcing, delivery,reporting and adding
value, andtheindependence of Internal Audit. Feedback was sought
from ARCom members and key stakeholders, including subsidiary
board members to whom Internal Audit had reported to during the
year. The output of the review indicated that, overall, the Internal Audit
function continued to operate effectively and provided an
independent perspective on Man Group’s control environment.
External audit
2021 External Audit Plan
At the October meeting, the 2021 External Audit Plan was presented
by Bevan Whitehead, who took over the role of lead engagement
partner during the year. The plan, which was discussed and
approved bythe ARCom, set out the proposed materiality threshold,
the scope of the audit and thesignificant audit risks that had
beenidentified.
Auditor independence and the provision of non-audit
services
In order to safeguard the independence and objectivity of the
external auditor, the ARCom is responsible for the development,
implementation and monitoring of Man Group’s policies on the
provision of non-audit services and oversight of the hiring of
personnel from the external auditor should this occur. The ARCom
reviewed the Company’s non-audit services policy at the October
2021 meeting.
Summary of non-audit servicespolicy
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 and are prescribed
by the FRC’s Revised Ethical Standard 2019 but which have an
expected value of $75,000 or more, must be approved by the
ARCom in advance. The non-audit services fees in aggregate
must not exceed 70% of the statutory audit fee forthe previous
three years, which is equivalent to $1.6 million for 2021.
Furtherdetails can be found on the Company’s website.
The table below shows the remuneration paid to Deloitte in 2020
and2021.
2021
$’000
2020
$’000
Fees payable to the external auditor for the
audit of the Company and the consolidated
financial statements 599 593
Other services:
The audit of the Company’s subsidiaries
pursuant tolegislation 1,842 1,786
Audit-related assurance services 463 372
All other services 1 1
Total auditor’s remuneration 2,905 2,752
The increase in the remuneration paid to Deloitte in 2021 is primarily
inflationary, and also includes an additional fee for the review ofthe
ESEF filing.
Following a formal assessment of the external auditor’s independence
and objectivity inFebruary 2022, the ARCom concluded thatDeloitte
continued to be independent andobjective.
Effectiveness of external audit process
At the May 2021 meeting, the ARCom considered feedback from
ARCom members and various members of the management team in
order to facilitate theARCom’s formal assessment of the effectiveness
of the external audit process. Respondents were asked for their views
on several components of the external audit process including the
quality of the audit partner and team, planning and execution of the
audit, quality of audit reporting and theexternal auditor’s
independence andobjectivity.
The responses indicated that, overall, Deloitte was performing in line
with expectations, with the audit team demonstrating appropriate
challenge and a rich understanding of ManGroup’s business.
Deloitte’s management of the external audit process in the context
ofCOVID-19 was cited as a particularly positive area, Deloitte having
worked well with management to minimise risks and amend timetables
as required to suit remote working.
The output of the effectiveness review also highlighted certain areas
offocus that had been identified in the previous year’s assessment,
particularly around efforts to implement additional efficiencies to the
audit process in light of the challenges presented by the COVID-19
working environment, had been addressed well during the 2020 audit.
Anumber of areas, including the development of audit quality
indicators and enhanced coordination with Internal Audit, were
identified as requiring further consideration and Deloitte’s plans to
address these issues were set out alongside the 2021 external audit
plan. After discussion, the ARCom concluded that the external audit
process in respect ofthe 2020 financial statements had been effective.
External auditor challenge
An example of an area where Deloitte challenged management’s
assumptions and judgement was in relation to the definition of
adjusting items, which were relabelled as ‘non-core’ to clarify that
theP&L items which differ between statutory and adjusted measures
represent those that do not drive the core profits and cash flows of the
business. Other areas where Deloitte also challenged management
include valuation of US deferred tax assets and challenge of the
underlying assumptions used in the goodwill impairment assessment.
In all areas, Deloitte concluded that the assumptions and judgements
applied by management were appropriate.
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Reappointment of Deloitte as externalauditor
Deloitte were appointed as the Group’s external auditor in 2014, following a tender process led by the ARCom in 2013. Inaccordance with the
Code and the Competition and Markets Authority’s Order 2014 (the Order), the Company will be required to put its external audit out to tender
again in 2023 at the latest. The ARCom received a briefing at its May 2021 meeting regarding forward planning for the audit tender, which
considered the timeline of initiating the process toallow for maximum participation. The ARCom will continue to assess the external audit process
annually and, on the basis thatit remains effective and the audit fee represents good value to shareholders, it is expected that the next tender
process will complete by 2023 with mandatory rotation of the external auditor currently required by 2033. TheARCom confirms that the
Company hascomplied with the provisions of the Orderforthe financial year under review.
Following the ARCom’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 Man Group’s external auditor to the Boardfor recommendation and approval
byshareholders at the 2022 Annual GeneralMeeting.
How the ARCom has assessed itseffectiveness
Outlined in the table below are the key areas that were identified in the ARCom’s 2020 evaluation as requiring further consideration and
development during 2021, together with the progress that has been achieved in 2021.
2021 progress on 2020 actions
2020 evaluation 2021 progress
Discuss and agree appropriate
balance between audit versus
risk coverage at meetings
Meeting agendas and attendance were reviewed in 2021 to address the allocation of time dedicated to audit and risk matters, with
adjustments made as required. The balance was monitored throughout 2021, and feedback was also sought as part of the 2021
evaluation.
Arrange in-depth reviews
ofthematic risk areas and
industry trends
Following requests from the ARCom, briefings were arranged during 2021 on certain thematic risk areas and trends where it was
felt that anin-depth review would assist a broad consideration of risks, and the controls in place to mitigate risks. Examples of items
covered:
• industry trends and risks
• treasury operations
• fund administration and accounting relationships
Invite subject matter experts
toprovide periodic updates
onregulatory trends
The ARCom requested that it receive training on ESG regulatory trends, which was delivered in November 2021. Deloitte briefed
the ARCom on relevant ESG regulatory themes in the context of external reporting anddisclosures required in ManGroup’s Annual
Report, while ManGroup’s Compliance team briefed the ARCom on wider ESGregulatory themes relevant tothe firm.
In October 2021 the ARCom considered the findings and recommendations of the external effectiveness evaluation conducted by an external
consultant as part of the wider Board evaluation process. Interviews were conducted with ARCom members and certain regular attendees.
Theexternal consultant also attended an ARCom meeting to observe its dynamics at work. The results of the evaluation confirmed that the
ARCom was operating effectively, and responses indicated that the ARCom was a thoughtful and collaborative forum, while the ARCom Chair
was credited for ongoing work. More detail can be found on the effectiveness evaluation on pages 88 to 89.
Areas identified for focus in 2022 included thecontinued consideration of an appropriate balance between audit and risk matters atmeetings,
aswell as monitoring of recommended changes in the approach tomeeting attendance for non-ARCom members, which was implemented
inlate 2021.
Lucinda Bell
Chair, Audit and Risk Committee
Audit and Risk Committee report continued
1.
Board/Committee composition 13%
2.
Board search/changes 44%
3.
Succession planning 27%
4.
Governance and other 16%
Proportion of the committee time
spent on key responsibilities
1
2
3
4
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Nomination Committee report
Summary of the Nomination
Committee’s activities during
2021
• Reviewed the size, composition, diversity and
skillset ofthe Board and its Committees.
• Considered feedback from the external Board
effectiveness evaluationprocess.
• Discussed proposed changes to the Senior
Executive Committee and recommended to
theBoard the approval of the appointment of
Antoine Forterre as CFO and as an executive
director of the Company.
• Recommended to the Board the approval of the
renewal of Richard Berliand’s appointment as
Senior Independent Director for a further
three-year term subject to annual shareholder
approval.
• Dedicated significant time to succession
planning for the Board and senior management.
• Recommended changes to the Board Diversity
Policy to the Board for approval.
Membership:
John Cryan (Chair)
Lucinda Bell
Richard Berliand
Anne Wade
Where appropriate, Luke Ellis is invited to attend
Committee meetings
Dear Stakeholder
2021 proved to be another busy year for
theCommittee. As a consequence of Sandy
Rattray’s decision to retire from ManGroup
as CIO, Luke Ellis discussed with the
Committee proposed changes to the Senior
Executive team following Sandy’s departure.
These plans included a proposal to appoint
Mark Jones as Deputy CEO with
responsibility formanaging the Quant and
Technology engines and, as a result of
Mark’s change in responsibilities, the
appointment of a newCFO.
Following a thorough external benchmarking
exercise, the Committee was pleased to
recommend the appointment ofAntoine
Forterre as CFO to the Board for approval.
Antoine joined ManGroup over tenyears
ago in Finance, where he became Head
ofCorporate Development and Group
Treasurer before assuming the COO and
subsequently Co-CEO position within
ManAHL. Given Antoine’s previous
experience with the firm, the Committee
believed that he had the necessary skills
andknowledge to smoothly transition into
the CFO role. We were pleased that we were
able to promote internal talent and formally
welcomed Mark and Antoine to their new
roles at the beginning of October.
There were a number of other changes
atthe Senior Executive level that were
discussed by theCommittee, including
changes in responsibilities for Robyn Grew
and Shanta Puchtler and the appointment
ofSteven Desmyter and Eric Burl (Co-Heads
of Sales) to the Senior Executive Committee
(Senior ExCo). A summary of the Senior
ExCo members’ responsibilities is set
outonpage 74.
We were pleased that we were able to promote internal talent
and formally welcomed Mark and Antoine to their new roles
atthe beginning of October.
John Cryan | Chair
The Committee continued to focus on
succession planning during 2021. In June,
ManGroup’s Global Head of Talent, Lara
Carty, was invited to talk to the Committee
about ManGroup’s talent management
strategy, the talent review process and the
support offered by the Talent team to
develop and nurture ManGroup’s talent
pool. Further details are set out on page 40.
The Committee also considered NED
succession in light of Dev Sanyal and Zoe
Cruz’s plans to retire from the Board
following our AGM in 2022, and agreed to
appoint Jackie Hunt with the appointment
taking effect on 28 February 2022. I would
like to reiterate my welcome to Jackie.
Given the importance of succession planning
to the long-term success of the Company,
the Committee intends to keep this firmly on
the agenda for the year ahead. We hope to
reinstate our non-executive dinners during
the year, which will provide us with further
opportunities to discuss development and
succession planning for Board and senior
management positions.
John Cryan
Chair
98
Governance
Man Group plc | Annual Report 2021
Role of the Committee
The Committee’s full terms of reference, which are reviewed by the
Committee and submitted to the Board for approval on an annual
basis, are available on the Company’s website. A summary of
responsibilities is as follows:
• Keep the Board’s composition under regular review in terms
ofsize, structure, skills, experience and diversity in response
tochanging business needs and opportunities.
• Identify the particular skills, knowledge and experience required
fora specific Board appointment and conduct the search and
selection process.
Nomination Committee report continued
• Recommend the appointment of new candidates to the Board
andthe renewal, where applicable, of existing non-executive
director appointments.
• Review plans for executive director and senior management
development and succession.
Board changes during 2021
On 1 October 2021, Mark Jones stepped down from the Board
and assumed the role of Deputy CEO. On the same date, Antoine
Forterre was appointed to the Board as an executive director and
formally took over the role of CFO. A timeline of the process and
key areas of discussion are setout below.
Committee evaluation
Progress on the priority areas identified by the Committee in last year’s evaluation is set out below, together with the areas for focus
highlighted in the 2021 external Board evaluation overleaf.
Progress on priority areas identified in 2020 Board evaluation
Priority area Progress during 2021
Continue to strengthen focus on succession planning at Board and senior
management level.
• Two Board/Board Committee sessions dedicated to ManGroup’s talent and
succession planning processes held in2021.
• Succession plans invoked following Sandy Rattray’s decision to retire, with
internal talent appointed tothevarious roles created by Sandy’s departure.
• Committee considered NED succession in light of Dev Sanyal’s retirement
from the Board in May 2022 and the remaining NEDs’ tenures.
• Succession planning to remain an area of focus for the Committee during
2022.
Consider any changes to the remit of the Board Committees taking account of
industry best practice and feedback obtained as part of the external Board and
Board Committee evaluation to be undertaken in 2021.
• Board considered feedback from Board evaluation and confirmed that the
composition and remit of the Board Committees remained appropriate but
agreed to keep them under review. Further details are set out overleaf.
May 2021
• Luke Ellis discussed Sandy Rattray’s plans to retire before
the end of the year with the Committee, and the resulting
impact on the Senior Executive team.
• The Committee considered the plans, noting that the
proposal to appoint Mark Jones as Deputy CEO created
anopportunity to appoint a new CFO.
• The Committee considered possible candidates for the CFO
role and requested that an external benchmarking exercise
beundertaken.
• Hedley May (HM) were appointed to undertake a
benchmarking exercise (HMhas no other connection
with the Company or any individual director).
2021 Board and Senior Executive changes timeline:
June 2021
• HM were invited to attend the Committee meeting (all
non-executive directors were present) to provide feedback.
• Having considered a number of potential candidates, the
Committee agreed that Antoine Forterre was the right
person for the role and recommended his appointment as
CFO and executive director to the Board for approval.
• The Board approved Antoine’s appointment which was then
announced to the market.
• Antoine Forterre, Steven Desmyter and Eric Burl were
appointed to Senior ExCo with effect from 11 June 2021.
June – September 2021
• Handover of relevant Board and Senior ExCo responsibilities
and transition into newroles.
• Induction arranged with Antoine to discuss listed plc,
statutory, regulatory and governance Board responsibilities.
October – December 2021
• Mark stepped down from the Board totake up position
asDeputy CEO.
• Antoine appointed to the Board and became CFO.
• Sandy retired as CIO of Man Group.
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The Committee also discussed the areas identified in the 2021 Board evaluation as requiring further Committee consideration.
Area Committee consideration Action taken/next steps
Board and Board
Committee Composition
• Discussed areas in which the Board might benefit
from additional non-executive skills, experience
and capabilities.
• Considered proposals to appoint an additional
Audit and Risk Committee member, extend
membership of the Committee to all NEDs and
possible creation of an ESG Board Committee.
• Committee appointed Hedley May (who has no other connection
with the Company or any individual director) to progress non-
executive search process. Jackie Hunt appointed to the Board with
effect from 28 February 2022.
• Kate Barker appointed to the Audit and Risk Committee with effect
from1 December2021 and Jackie Hunt appointed to the Audit and
Risk Committee with effect from 28 February 2022.
• Committee membership to remain as is but with wider NED
involvement when considering Board appointments (see below).
• Full Board to remain responsible for ESG matters rather than creating
a separate ESG Board Committee.
Board appointments
• Considered proposals around the Committee’s
role in Board appointment process.
• Discussed succession planning particularly in light
of the remaining terms of each of the NEDs and
the concept of ‘laddering’.
• Agreed wider NED involvement was appropriate when considering
Board appointments and that communication channels could be
further enhanced.
• See succession planning section below.
Skills matrix
• Discussed recommendation to develop a formal
skills matrix, designed to support succession
planning discussions and build out of bespoke
Board training programme.
• Skills matrix created and implemented with the output discussed by
the Committee.
+ seepage 89
Succession planning and Board composition
As previously mentioned, significant focus was given to succession
planning by the Committee at both an executive and non-executive
level during the year. Extensive discussions took place around the
proposed changes to the Senior Executive team which resulted
inthe appointment of Antoine Forterre as CFO. The Committee
alsospent considerable time discussing non-executive director
succession, particularly in light of the feedback received from the
Board evaluation process, the conclusions drawn from the newly
created Board skills matrix and the tenure of the existing non-
executive directors. Following its formal review of the size,
composition and skillset of the Boardand its Committees, the
Committee agreed that the Board would benefit from additional
technology and finance expertise and that any future non-executive
search should focus on individuals with experience in these areas.
The Committee was pleased to recommend the appointment of
Jackie Hunt to the Board and as a member of the Audit and Risk
andRemuneration Committees with effect from 28 February 2022.
Jackie brings substantial asset management, financial and executive
management experience. The Committee will progress its search
fora non-executive director with direct and relevant technology
experience during the course of 2022.
The Committee also had the opportunity to discuss with Lara Carty,
Global Head of Talent, the philosophy underpinning ManGroup’s
firmwide approach to succession planning and talent development
and the supporting framework and processes.
Committee changes
As previously announced, Anne Wade took over from Richard
Berliand as Chair of the Remuneration Committee (RemCom)
on7 May 2021 atwhich point she also became a member of the
Nomination Committee. In response to feedback from the 2021
Board evaluation process, the Committee considered the
composition of the Audit and Risk Committee (ARCom) and
recommended to the Board that Kate Barker beappointed as an
additional member of the ARCom. The Board approved Kate’s
appointment, which became effective on 1 December 2021.
Dev Sanyal will step down from the Audit and Risk Committee and
Zoe Cruz from the Remuneration Committee following the 2022
AGM. Jackie Hunt was appointed as a member of both Committees
with effect from 28 February 2022.
The Committee also considered whether it would be appropriate to
extend the Committee’s membership to all non-executive directors
but agreed that the current composition was appropriate. It was,
however, suggested that other non-executive directors could be
brought into discussions as necessary, particularly when considering
Board appointments and that reporting from the Committee to the
Board should be enhanced where appropriate.
Renewal of existing non-executive director
appointments
The Committee reviewed the profile of Board tenure of our non-
executive directors in light of its future needs. As part of this, it
considered the renewal of Richard Berliand’s appointment as Senior
Independent Director, whose second three-year term was due to
expire in early 2022. Richard did not take any part in the
consideration of the renewal of his appointment. The Committee
agreed, taking account of the current cycle of Board development
and succession and the feedback on Richard’s contributions to the
Board, to recommend the renewal of his appointment for a further
three-year term to the Board for approval, subject to annual
reappointment by shareholders at the AGM.
Priorities for 2022
The key priority for the Committee in 2022 is to move forward in its
search for new non-executive directors with expertise in technology.
Succession planning will also remain firmly on the agenda for the
year ahead.
John Cryan
Chair
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Man Group plc | Annual Report 2021
Board Diversity and Inclusion Policy
The Board Diversity and Inclusion Policy sets out the Board’s
understanding of the value and impact of diversity in its broadest
sense and the measures, processes and inputs through which it
seeks to increase diversity on the Board and influence and monitor
its impact within the Company as a whole. The policy, which is
summarised in the box adjacent, is fully aligned with ManGroup’s
diversity, equity and inclusion statement. Further details of our
diversity, equity and inclusion activities throughout the firm are given
in the People and culture section on pages 41 and 42. The progress
made on increasing the number of women in Man Group’s senior
management roles is set out in the non-financial KPIs section on
page 23.
Overview
The Board embraces and seeks to promote diversity and
inclusion in its broadest sense, both in terms of its own
composition and within ManGroup’s senior management and
employee base as a whole. It sees diversity as the combination
and interaction of people with different knowledge, skills,
experience, backgrounds and outlooks and believes that this
creates greater value and leads to better decision-making and
performance at all levels of the organisation which, in turn,
supports the delivery of the Company’s strategy.
The Board is responsive to diversity challenges within the
financialservices industry and endorses the steps initiated and
implemented by the executive management team to help navigate
these challenges. In addition to the internal diversity, equity and
inclusion initiatives within ManGroup, the Chair and CEO are
members of the 30% Club. ManGroup is represented on external
inclusion focused committees and working groups and is also
asignatory to the Women in Finance Charter and Race at
WorkCharter.
The Board supports the recommendations for the adoption
ofvoluntary targets for building gender and ethnic diversity into
FTSE company boards and senior management and is pleased
toreport that ithas exceeded the previously disclosed gender
diversity target of at least 33% female representation on the
Board. The Board is keen to maintain an appropriate gender
balance and is therefore committed to ensuring that there is at
least 40% representation of either gender on the Board, whilst
recognising that during periods of transition on the Board, this
balance may not, temporarily, be maintained. The Board also
confirms that it has more than one Board member from an ethnic
minority background as set out in the Parker Review and is
committed to ensuring that the Board remains ethnically diverse.
Pages 68 and 69 provide further details on current Board diversity
metrics. Set out overleaf are the three main areas on which we
arefocusing topursue our policy objectives.
Nomination Committee report continued
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Man Group plc | Annual Report 2021
Board appointments
When seeking to make a new appointment, the Board will focus
first on identifying an individual with the capability, expertise and
experience which are required to discharge the specific role,
andwill select the best candidate on that basis. Within this remit,
itrecognises the added value to be derived from all forms of
diversity, including diversity of gender, gender identity, sexual
orientation, ethnicity, social background, as well as cognitive and
personal strengths. To support this objective, we adopt a formal
approach to Board searches which includes insisting on
representation of under-represented groups on search firms’ long
and short lists and remaining conscious of any potential for bias
inthe interview and selection process. We will also consider and
explore alternative routes to the supply of appropriate candidates.
Implementation in 2021
As part of the process for appointing a new CFO, the Nomination
Committee commissioned an external benchmarking exercise
with a strong focus on diversity. Having reviewed the output of
theexercise and considered a number of potential candidates,
theCommittee concluded that Antoine Forterre was the best
candidate for the role based on capability, expertise and
experience. The Nomination Committee will continue to seek
additional non-executive skills and experience, including direct
and relevant technology expertise and plc leadership experience.
Oversight of recruitment, development and inclusion
The Board continues to encourage and oversee the output from
awide range of recruitment and people development policies
andinitiatives led by the executive management team which
aimto grow the diversity of ManGroup’s talent pool, provide
development opportunities for all and embed an inclusive culture.
While we cannot lead such initiatives directly, our role is to monitor
and challenge the impact they are having on the firm. As part of
this oversight we review the level of gender diversity introduced
through our summer internship and graduate programmes and
women’s progression over time through mentoring, retention
andreturner initiatives. We also keep updated on ManGroup’s
relationships with partners who can help source talent from more
diverse backgrounds and under-represented groups and
ManGroup’s sponsorship of events which encourage more
diverse talent into financial careers.
In addition, a key role of the Nomination Committee is to
monitorand discuss with the CEO the career development
andsuccession plans for senior management across the firm,
including the progress of any under-represented groups. This
enables us to promote the development of a strong and diverse
pipeline of talent for future executive leadership and Board positions.
Implementation in 2021
In addition to the regular updates on specific people hires
andpromotions, the Board undertook a specific review of
ManGroup’s culture which included consideration of the diversity,
equity and inclusion network activities to promote andsupport
adiverse culture within the organisation. Further details are set
outon pages 41 to 42. Two dedicated sessions focusing on
succession planning were alsoheld during the year which
included consideration of data that had been captured through
the succession planning process with particular focus on
diversitymetrics and management’s continued efforts to improve
diversity within the organisation from both a gender and ethnicity
perspective, noting that this was an areaoffocus across
theindustry.
Despite there being, once again, reduced face-to-face
opportunities for specific Board discussion on management
development and succession, the Board was able to increase
itsexposure to executives below Board level and to assess the
strength, breadth and diversity of management resource available
to the business through updates at Board and Committee
meetings from Senior Executive Committee members and other
members of the management team on the areas of the business
for which they are responsible.
Review and reporting
The Board is committed to the development of diversity on the
Board and among ManGroup’s employees. It will seek feedback
on Board balance, including the balance of skills and experience,
in its annual Board evaluation and will keep the review and
challenge of ManGroup’s people development, inclusion and
diversity programmes firmly on the Board agenda. Anaccount
ofthe Board’s activities and progress against its objectives in
these areas will be given in the Annual Report each year.
Implementation in 2021
Feedback from the2021 Board and Committee evaluation
highlighted the strong gender diversity on the Board as well as
thediversity of perspective and background whilst identifying the
need to bring additional technology skills and expertise. This will
be an area of focus for theNomination Committee during 2022
along with the promotion of diversity throughrecruitment, talent
management andsuccession.
1
2
3
4
6
5
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Man Group plc | Annual Report 2021
1. Chair’s annual statement
Summary of the Remuneration Committee’s
activities in 2021
• Reviewed and consulted with shareholders on the Directors’
Remuneration Policy, including the inclusion of ESG-related
metrics and objectives in the LTIP and bonus.
• Determined the total annual compensation for the executive
directors, Executive Committee members, the Company
Secretary and Remuneration Code staff.
• Approved the salary of the new CFO.
• Reviewed the remuneration of the Chair and determined
thatno changes should be made.
• Considered compensation below the Board, including
byreference to both gender and ethnicity metrics.
• Reviewed and approved the 2020 Directors’
Remunerationreport.
Membership:
Anne Wade (Chair)
Richard Berliand
John Cryan
Zoe Cruz
Kate Barker
Where appropriate, Luke Ellis is invited to attend Committee
meetings.
1 Jackie Hunt was appointed as a member of the Committee on
28 February 2022.
Contents
Chair’s annual statement 103–106
Remuneration at a glance 107–110
Directors’ Remuneration Policy summary table 107
Remuneration outcomes for 2021 108-109
Executive director pay in the context of Man Group’s shareholders 110
Executive director pay in the context of Man Group’s employees 110
Remuneration outcomes in 2021 111–121
Single total figure of remuneration for executive directors 111
Annual bonus in respect of 2021 performance 111-113
Vesting outcome in respect of the 2019 LTIP 114
Relative importance of spend on pay 114
Review of past performance 115
Percentage change in directors’ remuneration 116
CEO pay ratio 116-117
Retirement benefits 117
Single total figure of remuneration for non-executive directors 117
Payments for loss of office 117
Payments to past directors 117
Directors’ interests 118
Directors’ interests in shares and options under Man Group
long-term incentive plans 119-121
Shareholder voting and engagement 121
Implementation of Directors’ Remuneration Policy for 2022 122
Base salary 122
Annual bonus for 2022 122
Long-Term Incentive Plan for 2022 122
Non-executive directors’ Remuneration Policy for 2022 122
Remuneration Committee 123–125
Membership and attendance 123
Independent advisers 123
Committee activities during 2021 and the early part of 2022 124
2021 Committee evaluation 125
Benchmarking and peer groups 125
Directors’ Remuneration Policy 126–133
Executive directors’ Remuneration Policy 126-129
Illustrative pay for performance scenarios 130
Performance measures selection and approach to target-setting 130
Differences between executive directors’ and
employees’ remuneration 131
Approach to recruitment remuneration 131
Service contracts and exit payment policy 132
External appointments 132
Non-executive directors’ Remuneration Policy 133
Recruitment of non-executive directors 133
Consideration of conditions elsewhere in the Company 133
Consideration of shareholder views 133
1. Executive directors’ remuneration 39%
2. Employee remuneration 17%
3. Senior management compensation 7%
4. Shareholder engagement, DRR and Remuneration Policy 22%
5. Governance and other 8%
6. Financial regulation 7%
Anne Wade
Chair of the Remuneration Committee
How the Committee spent its time in 2021
Directors’ Remuneration report
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Man Group plc | Annual Report 2021
We believe the proposed new policy, which
includes ESG-related objectives and metrics in
thebonus and LTIP, enhances the links with our
strategy and will deliver better alignment with
shareholders and other stakeholders.
Anne Wade | Chair of the Remuneration Committee
Dear Stakeholder
On behalf of the Board, I am pleased to present the Directors’
Remuneration report (the DRR) for the year to 31 December 2021.
For ease of reference, this report contains the following sections:
• a detailed index to help you find the sections you need (page 102);
• this annual statement (pages 103 to 106);
• the remuneration ‘at a glance’ section, summarising how the
Directors’ Remuneration Policy has been implemented in 2021
(pages107to110);
• the annual report on remuneration (pages 111 to 125); and
• the Directors’ Remuneration Policy (the ‘policy’) on which
shareholders will be asked to vote at the 2022 AGM (pages
126to133).
1.1 Introduction
I am pleased to present my first Directors’ Remuneration report
(DRR) as Chair of the Committee, having been appointed following
the 2021 AGM. I would like to thank my predecessor, Richard
Berliand, for his support both during my transition into the role
andonan ongoing basis through his continued membership
oftheCommittee.
As was set out in the 2020 DRR, having initially consulted with
shareholders in October 2020 on proposed changes to the policy,
we ultimately decided to ask shareholders to support a roll forward
ofthe existing policy at the 2021 AGM. I am pleased to say that
resolution was supported by more than 90% of shareholders.
Although we felt that the changes we were proposing were
appropriate, it was clear that the last AGM season would be a
particularly busy one, given the impact of the pandemic. The delay
also meant that we would be able to incorporate into the new policy
any changes necessary to comply with the Investment Firms
Prudential Regime (IFPR). The only change we made last year was to
bring the post-employment shareholding requirements into line with
market-leading practice and the Investment Association’s principles,
by requiring directors to retain shares equal to their requirement,
ortheir actual holding if lower, in full for two years after leaving.
Since my appointment, I have undertaken further extensive
consultation with shareholders on the changes to the policy initially
proposed last year, as well as on our proposals to introduce
ESG-related objectives and metrics into the bonus and the LTIP.
Iwould like to thank those investors who responded to our
consultation for their thoughtful and constructive feedback which
hashelped to shape the policy we are now putting forward, and
isset out in more detail in the following pages.
1.2 Directors’ Remuneration Policy and the
introduction of ESG into incentives
The Committee considers that the current policy has operated
broadly as intended and does not require fundamental change.
However, we are proposing the following amendments which the
Committee considers appropriate to ensure the policy will continue
tooperate effectively in support of the delivery of our strategy,
theattraction and retention of suitably qualified executives and
ourcontribution to wider society:
• Equalise short and long-term incentive opportunities so each
represent 300% of salary (currently at 250% and 350% of salary
respectively)
• Increase the bonus deferral to 55% (currently at 50%)
• Introduce ESG-related objectives and metrics into the bonus
andLTIP
We are proposing a rebalancing between the bonus and LTIP such
that each will have a maximum opportunity of 300% of salary (from
250% currently for the bonus and 350% for the LTIP). In order to
maintain broadly the same proportion of longer-term pay as now, the
deferral from bonus will simultaneously increase to 55% (from 50%
currently). We believe an equal split between bonus and long-term
incentive opportunities better aligns the executive directors with both
employees and the sector more widely. The remuneration structure
for below Board employees in peer group asset management
companies is most likely to comprise an annual bonus with a
significant level of deferral, as is also the case with Man Group’s own
employees. We do not consider that this small shift, from LTIP to
bonus, detracts from the long term focus of the executive directors
but we believe it is an important signal of greater alignment with the
wider workforce. The focus on the long term in the new policy is
further strengthened by the concomitant increase in the level of
deferral of the bonus from the current rate of 50% to 55% in the
newpolicy.
Man Group strives to be a leader in responsible investment (RI)
across all our investment styles and our commitment to RI includes
integration of ESG considerations into investment decisions,
stewardship, advocacy and thought leadership. We are also
committed to our people, wider society and the environment, which
reflect our core values. The inclusion of ESG objectives and metrics
into the incentive arrangements for the executive directors, in relation
to both the Group and the funds we manage, is therefore core to
ourstrategy as an important offering for our clients and shareholders,
as an expression of our corporate values.
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Man Group plc | Annual Report 2021
With effect from 1 January 2022, we intend to include ESG-related objectives and metrics in both the bonus and LTIP arrangements. In the
bonus, 15% of the overall outcome will be allocated to ESG objectives. The financial component of the bonus will remain at 70%, with no
changes proposed to the metrics used to determine that element of the outcome. The amount currently attributable to strategic and personal
objectives for each director will be reduced to 15% to enable the inclusion of the ESG objectives. In the LTIP, 10% will be allocated to an ESG
scorecard by reducing the current weightings of Relative TSR and Relative Investment Performance to 20% each (from 25%).
The table below illustrates the impact of both the equalisation of the bonus and LTIP opportunities and the introduction of ESG for the annual
incentive in the year-ended 31 December 2022 and for the LTIP to be awarded in March 2022, for the three-year period ending
31 December 2024; it also shows the aggregate weightings of each metric when consolidated across both the bonus and LTIP opportunities.
Variable pay metrics – impact of weighting changes
Metric
Current policy New policy
Bonus LTIP
Aggregate
weighting
1
Bonus LTIP
Aggregate
weighting
1
Variance
% Salary 250% 350% 300% 300%
Relative Investment Performance 0% 25% 15% 0% 20% 10% -5%
Relative Net Flows 30% 10% 18% 30% 10% 20% +2%
Core Management Fee EPS 20% 10% 14% 20% 10% 15% +1%
Core EPS 20% 30% 26% 20% 30% 25% -1%
Relative TSR 0% 25% 15% 0% 20% 10% -5%
ESG 0% 0% 0% 15% 10% 13% +13%
Strategic and personal 30% 0% 12% 15% 0% 7% -5%
Total 100% 100% 100% 100% 100% 100% –
1 Aggregate weighting shows the overall weighting when consolidated across both the bonus and LTIP opportunities.
1. Chair’s annual statement continued
Details of the three new measures which will be equally weighted in
the ESG scorecard in the LTIP, and their target ranges, are set out
onpage 122 and, in summary, they focus on:
• Female diversity: specifically the proportion of women in senior
management which, despite some progress to date, remains
achallenge across the asset management sector.
• Carbon reduction: climate change is clearly a global imperative
and we believe a target to reduce total (market based) emissions
per employee, in line with our non-financial KPI, is appropriate.
Wehave revised our approach to this metric since our original
discussions with shareholders and have expanded it to include
scope 3 emissions, which comprise business travel and leased
assets, in addition to scope 1 and 2 emissions. While our primary
focus is on reducing our actual carbon footprint as much as
possible, we plan to allow the use of carbon offsets to contribute
towards the achievement of this goal as we regard this as a
legitimate financial investment in improving our performance.
Wealready disclose our use of carbon offsets and will continue
todo so annually as well as disclosing, at the end of the LTIP
performance period, the extent to which the LTIP target has been
met by actual reductions or carbon offsets.
• ESG-integrated assets under management (AUM): we think it is
important that the impact we have through managing our clients’
assets, as well as how we manage our own firm, is covered in
these metrics, and therefore have included a measure on the
growth in our ESG-integrated AUM.
We intend to use the 15% of the bonus that will be allocated to
ESG-related objectives to incentivise performance on the range of
actions and activities in the business, the results of which we expect
to see delivered over time in the quantitative outcomes in the LTIP.
The qualitative objectives in the bonus also represent an opportunity
to link reward to progress on, for example, other types of diversity
including gender, ethnicity and neurodiversity as well as on the
broader environmental agenda, such as progress towards achieving
net zero. We believe it is appropriate that the ESG-related objectives
in the bonus should be the same for both executive directors, with
them each having different strategic and personal objectives
accounting for the remaining 15%.
Directors’ Remuneration report
105
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Man Group plc | Annual Report 2021
The performance metrics selected for use in the short and long-term incentive arrangements in the Directors’ Remuneration Policy, including
those relating to ESG, have been chosen to reflect Man Group’s strategic priorities. The financial metrics are aligned with Man Group’s
financial key performance indicators (KPIs) which illustrate and measure the relationship between the investment experience of Man Group’s
clients, our financial performance and the creation of shareholder value over time. The non-financial objectives in the bonus, including those
related to ESG, are aligned with our strategic focus and non-financial KPIs to ensure that executives remain focused on the delivery of annual
performance whilst ensuring the building blocks for future growth are put in place. This alignment ensures that the link between strategy, the
KPIs by which we measure performance and reward, is clear, as shown in the table below.
1.3 Shareholder engagement in 2021
As I mentioned earlier, as part of our renewed consultation on the
changes to the policy, letters were sent to some 21 of our largest
shareholders, representing almost 60% of our shareholder base,
during autumn 2021. I was delighted to meet with many of those
shareholders, as well as the four main proxy advisory groups and
shareholder representative bodies, and we received feedback from
most of the shareholders contacted. There was broad support for
the direction of travel of the new policy and, in particular, the detailed
discussions we had with a number of shareholders onthe
introduction of the ESG metrics were invaluable and have informed
our final approach to this important change.
In December 2021, we wrote again to those same shareholders and
their representative bodies to provide further detail on the specific
measures for the new ESG metrics in the LTIP, as set out in this
report. We also said more about how we would incorporate
ESG-related objectives into the bonus to help us to monitor and
measure progress on the wide range of priorities that will contribute
to our broad ESG agenda, particularly our focus on the environment
and all types of diversity.
1.4 The link between the pay of executive directors
and the workforce
As set out above, the Committee considers that the relatively small
shift in opportunity from the LTIP into the bonus for the executive
directors provides greater alignment with our approach to
remuneration for the wider workforce, whose performance-related
pay generally comprises an annual bonus with significant deferral.
During the review of the policy, the executive directors also requested
that the enhanced holiday and sick leave entitlements, for which they
were eligible due to their seniority, should be reduced to bring them
in line with the wider workforce. The Committee supported this small
but significant change to a legacy arrangement which it felt
demonstrated management’s commitment to overall alignment of
their pay and benefits with employees, as well as a culture of fairness
and inclusivity.
As in 2020, the Committee again reviewed the approach to variable
compensation across the employee population and undertook a
detailed review of compensation patterns across ethnicity and
gender. This analysis has been significantly improved by the
information now available following the implementation of Workday,
the HR and Finance system, in 2019. The overall conclusion from the
review was that compensation in the wider workforce was fair and
reasonable, when taking account of the employee’s role and location.
Management intends to continue to perform this analysis during each
annual compensation cycle to monitor for any potential unexplained
differences and to present their findings to the Committee each year.
The Committee again engaged directly with employees by providing
a simple document explaining how the remuneration of the executive
directors is determined and how that links with the approach to the
remuneration of the wider workforce, and employees were invited
tosubmit any questions via a dedicated email address.
Strategic priorities
Financial KPIs Innovative investment
strategies
Strong client
relationships
Efficient and effective
operations
Returns to
shareholders
Non-financial KPIs
– Relative investment
performance
– Relative net flows
– Core management fee
EPS growth
– Core EPS
Bonus metrics
– Carbon footprint
– Women in senior
management roles
– ESG integrated AUM
– Employee engagement
Relative net flows
Core management fee EPS
Core EPS
ESG-related objectives
Strategic and personal objectives
LTIP metrics
Relative investment performance
Relative TSR
Cumulative relative net flows
3-year core management fee EPS
3-year core EPS
ESG scorecard
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Man Group plc | Annual Report 2021
As part of its consideration of the overall appropriateness of the
executive directors’ remuneration in 2021, the Committee also
undertook the following actions, in addition to the reviews detailed
above:
• approved the total bonus pool to be allocated to staff which, as
aresult of strong performance in the year, is 70% higher than in 2020,
meaning our employees share in the success of the company;
• carried out a detailed review of bonus proposals and evaluations
for the Executive Committee, Company Secretary and individuals
covered by the Remuneration Codes;
• reviewed the ratio of CEO pay to the UK employee population
anddiscussed the reasons for the movement since 2020 as set
out in the commentary under table R8 on page 116; and
• reviewed annual performance ratings and compensation
outcomes by gender and ethnicity to ensure decision-making
wasobjective and without bias.
1.5 Review of performance in 2021
Man Group has had a very successful year. Our funds performed
strongly overall, returning $12.5 billion in investment gains and
delivering 1.9% of relative investment outperformance to our clients.
We saw record net inflows of $13.7 billion with all our main product
categories experiencing positive net flows. As a direct consequence,
our AUM ended the year at a new record of $148.6 billion. Combined
with continued cost discipline, this led to substantial growth in both
core management and core EPS, at 52% and 139% respectively
compared to 2020.
Our shareholders have also enjoyed a very good year; there has been
solid share price growth in absolute and relative terms, total dividend
is32% up on the year, and we announced $350 million of additional
share buybacks. This implies that close to $544 million will be returned
to shareholders in relation to 2021 via dividends or share buybacks,
the highest amount since 2016.
1.6 Remuneration outcomes for 2021
Our incentive arrangements are designed to reward exceptional
performance; when our clients and shareholders do well it is
appropriate that our employees, including the executive directors,
should share in that success.
When the Committee set the targets for the 2021 bonus, it again did
so by reference to internal and external forecasts, including consensus
estimates available at the time and long-run historical performance
ofboth Man Group and our peers. The threshold for relative net flows
was again set at 1%, meaning the Company had to outperform its
peers before anything would be paid out on this measure; the target
was set at 3.5% and the maximum required Man Group to outperform
its competitors by at least 6%. In an exceptional year, relative net flows
of 9.8% were delivered. The threshold for core management fee EPS
was set at 11.3¢, representing growth of almost 10% on 2020; target
and maximum were set at 12.3¢ and 13.3¢ respectively. The
combination of higher net inflows, good investment returns and
controlled costs resulted in core management fee EPS of 15.7¢. The
volatility of performance fee income means that it is appropriate to set
a wide range for core EPS bonus targets; in 2021, the threshold, target
and maximum were set at 15.3¢, 18.8¢ and 24.3¢ respectively. The
exceptional performance in the year delivered core EPS of 38.7¢.
Consequently, for the first time since the current Remuneration
Policywas implemented in 2018, all three of the financial measures
inthe bonus exceeded their maximum and an overall result of 70%,
out of a maximum of 70%, was achieved.
Further details of the targets and performance against them is shown
on page 108 in the ‘Remuneration at a glance’ section and in table R2
on pages 111 to 113.
The strategic and personal objectives of each director, which account
for 30% of the bonus outcome in 2021, are selected to ensure delivery
of sustained performance over time. Luke Ellis again demonstrated
exceptional leadership and an outcome of 28.5% is considered
appropriate to reflect his performance. Mark Jones again performed
strongly to achieve 24%. The Board has been very pleased with the
start that Antoine Forterre has made as CFO and his outcome of 20%
reflects that he was only in role for the final quarter of the year.
The first award under the LTIP was made in March 2019 for the
three-year period from 1 January 2019 to 31 December 2021 and
vests in March 2022, with a subsequent two-year post-vesting holding
period. As a reminder, the level of vesting at threshold is 0%, meaning
the directors must exceed the threshold for any of the award to vest.
When the LTIP targets were established three years ago, the 2018
DRR set out details of how the Committee had ensured they were
appropriately stretching. In that context, I am pleased to say that the
2019 LTIP award has vested at 60% driven by the exceptionally strong
performance in 2021. Over the same period the share price has
increased by 52%, from £1.46 at the end of 2018 to £2.22 at the end of
2021 (based on the three-month average share price) and Man Group
was in the top quartile for TSR performance over the LTIP period,
against its peer group of the FTSE 250 Index. A summary of the
outcome against each of the performance metrics is shown in the
‘Remuneration at a glance’ section on pages 108-109 with full details
included on page 114 of the annual remuneration report. We anticipate
that the exceptional 2021 performance will also contribute to good
vesting outcomes for the outstanding 2020 and 2021 LTIPs.
During the year, Mark Jones was appointed Deputy CEO of the firm
and stepped down from the Board; he remains subject to his
post-employment shareholding requirements. Antoine Forterre,
formerly co-CEO of Man AHL, became CFO on 1 October 2021.
Antoine has been appointed on a salary of $625,000 in recognition of
his experience and expertise; he will receive benefits, pension provision
and incentive awards in line with the policy.
The annual reviews of the Chair and NEDs’ fees were undertaken and
resulted in no changes being made. On average during 2021
employee salaries increased by 3%.
In considering whether the overall remuneration of the executive
directors for 2021 was appropriate, the Committee considered a
number of factors, including:
• The excellent performance delivered which resulted in a year-end
record of AUM and strong growth in both core management fee
and core total profit.
• The experience for Man Group’s shareholders with good share
price growth in the year and a higher dividend paid. Over the three-
year LTIP performance period Man Group’s relative TSR put it in
the top quartile when compared to the FTSE 250 peer group.
• The experience of Man Group’s employees who, on average,
received bonuses 84% higher than in the previous year.
1.7 Conclusion
I hope that you find the information in this letter, and the sections of
the DRR that follow, to be clear and useful and I would welcome any
feedback you may have.
We look forward to welcoming you at our 2022 AGM and receiving
your support for the renewal of our Directors’ Remuneration Policy
and forour 2021 DRR at that meeting.
Anne Wade
Chair of the Remuneration Committee
1. Chair’s annual statement continued
Directors’ Remuneration report
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Man Group plc | Annual Report 2021
2.1 Directors’ Remuneration Policy summary table
Key features of the Directors’ Remuneration Policy, as it applied in 2021 and how it is intended to apply in 2022, subject to shareholder
approval for the new policy at the AGM, are summarised below:
Key elements ’21 ’22 ’23 ’24 ’25 ’26 ’27 Current policy 2021 Proposed new policy 2022
Fixed
pay
Salary – Overall policy maximum of $1.1m will apply to all executive directors, meaning no increase for the
CEO over the life of the policy
Salaries effective from 01/01/21:
– Luke Ellis $1.1m
– Mark Jones $625k (to 01/10/2021)
– Antoine Forterre $625k (from 01/10/2021)
Salaries effective from 01/01/22:
– Luke Ellis $1.1m
– Antoine Forterre $625k
Pension
allowance
– Maximum pension contribution aligned to the maximum available to all employees of 14% of salary
and subject to the same service criteria to receive the highest contribution rate
Benefits – Includes family private medical insurance, life assurance and permanent health insurance
Cash
bonus
Maximum
opportunity
– 250% of salary – 300% of salary
Operation – Awarded as a combination of cash (50%)
and deferral into shares (and funds once the
shareholding requirement has been met)
vesting in three equal tranches in each of the
following three years
– Awarded as a combination of cash (45%) and
deferral (55%) into shares (and funds once
the shareholding requirement has been met)
vesting in three equal tranches in each of the
following three years
Deferred
bonus
Metrics
Relative net flows 30%
Core management fee EPS (cents) 20%
Core EPS (cents) 20%
Strategic & personal objectives 30%
Relative net flows 30%
Core management fee EPS(cents) 20%
Core EPS(cents) 20%
ESG-related objectives 15%
Strategic & personal objectives 15%
Long-term
incentive
Maximum
opportunity
– 350% of salary – 300% of salary
Operation – Forward-looking three-year performance conditions with share grant at year 0,
vesting year 3 with subsequent two-year holding period
Metrics
Relative investment performance 25%
Relative TSR vs FTSE250 25%
3-year cumulative core 10%
management fee EPS
3-year cumulative core 30%
EPS
Cumulative relative net flows 10%
Relative investment performance 20%
Relative TSR vs FTSE250 20%
3-year cumulative core 10%
management fee EPS
3-year cumulative core EPS 30%
Cumulative relative net flows 10%
ESG scorecard 10%
Share
ownership
Shareholding
requirements
– CEO 300% of salary
– Other executive directors 200% of salary
Post-
employment
requirements
– 100% of the requirement, or the actual holding on departure if lower, to be retained for two years
after leaving
Malus and
clawback
Circumstances The Committee may apply malus and/or clawback to variable pay incertain
specified circumstances, including:
– material misstatement of financial results affecting the assessment of a performance condition,
– where there has been an error or inaccuracy relating to the determination of variable pay
– misconduct – fraud or misconduct
– where the director fails to meet the required
standards of fitness and propriety
In addition, it can apply malus if a director participates in, or was responsible
oraccountable for the following circumstances:
– a material failure of risk management,
– censure by any regulatory authority or a significant detrimental impact on the Company’s
reputation
– failing to meet the required standards of
fitness and propriety
– material error
– material downturn in financial performance
2. Remuneration at a glance
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Man Group plc | Annual Report 2021
2.2 Remuneration outcomes for 2021
2021 Bonus outcome (for the period from 1 January 2021
to31 December 2021)
The targets for relative growth in net flows were set at the same
percentage growth rates as in 2020 but, given the considerably
higher starting point for AUM, those growth rates translate into much
higher absolute targets than last year. In that context, growth of 9.8%
represents very strong performance.
Net flows, relative growth (%)
1% Threshold
3.5% Target
6% Maximum
Net Inflows, Relative growth (%)
16%
10%
9.8%
-1.2%
4.6%
2017 2018 2019 2020
1
2021
1 For 2017 to 2019, the metric was growth in net flows; from 2020 the metric is growth in
Relative net flows. The chart shows absolute growth for 2017 to 2019 and relative growth for
2020 and 2021.
The targets for core management fee EPS built on good
performance in the prior year, with the threshold set 10% higher than
the 2020 actual and the target 19% higher. The combination of
record net inflows, strong fund performance and good cost discipline
delivered core management fee EPS of 15.7¢, representing 52%
growth on 2020.
Core Management Fee EPS (¢)
11.3 Threshold
12.3 Target
13.3 Maximum
9.4
11.0
10.3
15.7
9.7
2017 2018 2019 2020
2021
2. Remuneration at a glance continued
Directors’ Remuneration report
Core EPS includes both management fee and performance
feerelated core earnings. The targets are based on the core
management EPS targets, to which are added implicit targets for
performance fee EPS. Given the volatility and unpredictability of
performance fees, those implicit targets are set with a wider range
ofoutcomes. To derive the core EPS targets, the threshold forcore
performance fee EPS was set at 67% of the average for the previous
five years, the target at 109% and the maximum at 185%. This
resulted in core EPS targets of 15.3¢, 18.8¢ and 24.3¢ atthreshold,
target and maximum respectively. The realised core performance fee
EPS of 23.0¢ for 2021 equates to 385% of the previous five-year
average. Added to core management fee EPS, this exceptional
performance delivered core EPS of 38.7¢, representing growth
of139% on 2020 performance.
Core EPS (¢)
15.3 Threshold
18.8 Target
24.3 Maximum
18.9
12.7
21.0
16.2
38.7
2017 2018 2019 2020
2021
Long-Term Incentive Plan outcome
(for the period from 1 January 2019 to 31 December 2021)
When disclosing the targets for the 2019 LTIP in the 2018 DRR, the
Committee provided extensive details on the target-setting process.
This set out how the Committee had ensured that the targets were
stretching in the context of Man Group’s historic performance,
itspeers, and future expectations at that time.
Relative Investment Performance measures outperformance
against our peers and the threshold of 0% means the directors are
only rewarded under this measure if Man Group outperforms its
peers. Over the three-year performance period relative investment
performance just missed the threshold, resulting in no payout
forthismetric.
0.0%
Target
3.0%
6.0%
Actual
Relative TSR vs FTSE 250: this metric measures how Man Group’s
Total Shareholder Return compares to that of the constituents of the
FTSE 250 excluding investment trusts and REITS. Out of a
population of 152 stocks still listed at the end of December 2021
(from 185 at the beginning of the measurement period), Man Group
has delivered relative TSR above the top quartile.
Actual
Median
Target
Mid-point
First
quartile
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Man Group plc | Annual Report 2021
In setting the targets for 3-year cumulative core management fee
EPS, the Committee reviewed the cumulative core management
feeEPS delivered in the three-year periods ending in each of the
previous four years. At that time, the maximum ever achieved was
27.2¢ for the three years ending 31 December 2018. In that context
the targets represented growth of 21%, 32% and 43% at threshold,
target and maximum respectively. The Committee also took account
of Man Group’s track record of careful capital management and
thepolicy of returning excess capital to shareholders via dividends
and/or share buybacks, which has been in place since 2013.
Inestablishing the target for three-year cumulative core management
fee EPS, the Committee assumed a continuation of that policy.
Cumulative core management fee EPS of 35.7¢ has been delivered
and the Committee is satisfied that dividends and buybacks are
inline with the assumptions made when the targets were set and
nodiscretion should be exercised to adjust the outcome.
Threshold
0.0%
Target
3.0%
Maximum
6.0%
Actual
-0.2%
Relative Investment Performance (%)
Actual
Threshold
Median
Target
Mid-point
Maximum
First
quartile
Relative TSR vs FTSE 250
Actual
35.7
Threshold
33.0
Target
36.0
Maximum
39.0
3 year Cumulative Core Management Fee EPS (¢)
Actual
75.9
Threshold
45.0
Target
59.0
Maximum
78.0
3 year Cumulative Core EPS (¢)
Actual
13.1%
Threshold
3.0%
Maximum
18.0%
Target
10.5%
Cumulative Net Flows (%)
As described above, core EPS is the sum of Core Management Fee
EPS and core performance fee EPS. The Committee considered it
was appropriate to set a wide range of LTIP targets, given the higher
volatility of performance fees which remain, nonetheless, avaluable
earnings stream for shareholders over time. When the targets were
originally set, the threshold for cumulative core EPS of 45¢ was
equivalent to 33¢ of cumulative core management fee EPS combined
with the delivery of $225 million of core performance fee PBT over
the measurement period; at maximum, it represented 39¢ of
cumulative core management fee EPS and $750 million of core
performance fee PBT over the same period. The achieved three-year
cumulative core EPS of 75.9¢, just below the maximum, represents
an excellent result for shareholders over the period, with$710 million
of cumulative core performance fee PBT having been generated.
Threshold
0.0%
Target
3.0%
Maximum
6.0%
Actual
-0.2%
Relative Investment Performance (%)
Actual
Threshold
Median
Target
Mid-point
Maximum
First
quartile
Relative TSR vs FTSE 250
Actual
35.7
Threshold
33.0
Target
36.0
Maximum
39.0
3 year Cumulative Core Management Fee EPS (¢)
Actual
75.9
Threshold
45.0
Target
59.0
Maximum
78.0
3 year Cumulative Core EPS (¢)
Actual
13.1%
Threshold
3.0%
Maximum
18.0%
Target
10.5%
Cumulative Net Flows (%)
When the targets for Cumulative Net Flows were set it was against
an industry backdrop of minimal inflows. The threshold of 3%
required average annual growth of at least 1% for any payout and
atmaximum of 18% cumulative growth, Man Group would have
tooutperform significantly both expectations for the industry and
ouraverage historical performance. Achievement of 13.1% growth
incumulative net inflows represents strong performance over
theperiod.
Threshold
0.0%
Target
3.0%
Maximum
6.0%
Actual
-0.2%
Relative Investment Performance (%)
Actual
Threshold
Median
Target
Mid-point
Maximum
First
quartile
Relative TSR vs FTSE 250
Actual
35.7
Threshold
33.0
Target
36.0
Maximum
39.0
3 year Cumulative Core Management Fee EPS (¢)
Actual
75.9
Threshold
45.0
Target
59.0
Maximum
78.0
3 year Cumulative Core EPS (¢)
Actual
13.1%
Threshold
3.0%
Maximum
18.0%
Target
10.5%
Cumulative Net Flows (%)
Notwithstanding the stretched targets set by the Committee in the
2018 DRR, the good performance delivered over the three years
ending 31 December 2021 resulted in 60% vesting of the LTIP
awarded in March 2019, as set out on page 114. The Committee
specifically reviewed the impact of the share buybacks implemented
over the period on the realised EPS metrics, and therefore the
overallLTIP outcome, and concluded that the buybacks undertaken
since 2018 had been in line with expectations at the time the targets
were set and no adjustments to the outcome were required. Finally,
the Committee also considered how the excellent performance in
2021, which led to a 52% increase in coremanagement fee EPS and
a 139% increase in core EPSover one year, could carry positive
implications for the 2020 and2021 LTIPs.
Single total figure of remuneration for CEO
The chart below shows the actual total remuneration of the CEO for
2021 compared with the potential remuneration under the current
policy. This reflects the exceptional performance delivered in 2021
and also illustrates the share price growth delivered over the last
three years, being the performance period for the first grant
underthe LTIP. 2020 actual and ‘illustrative’ data is included for
comparison; as a reminder, in 2020 no long-term variable pay was
included in the single figure table following the switch from the former
Deferred Executive Incentive Plan (DEIP) to the LTIP, the first award
under which was made in 2019. The 2020 ‘illustrative’ data shows
the potential single figure outcome using an expected value of 50%
for the LTIP. The data is shown for the CEO only as the change in
CFO during the year makes comparison difficult.
Single total figure of remuneration ($000s)
Fixed pay Annual bonus Long-term incentive – value of vested award
$9,785
$3,150
$5,075 1,925
$8,503
2,750 3,850 1,925 1,259
1,241 1,909
1,243 2,709 2,296 2,256
1,9091,241
Long-term incentive – value due to share price growth
Potential 2021 assumes full vesting of each of the bonus and LTIP plus the impact of 50%
growth in the share price on the LTIP (as shown in the scenario charts in the 2020 DRR).
110
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Man Group plc | Annual Report 2021
2.3 Executive director pay in the context of Man Group’s shareholders
The chart below shows the TSR generated since Luke Ellis’s appointment as CEO in September 2016, compared to both the FTSE250
andthe FTSE 350 Financial Services Index and shows Man Group’s outperformance against both sets of peers.
Total Shareholder Return (TSR) (Sep 2016 – Dec 2021)
300
200
250
150
100
50
0
Man Group TSR
Source: Datastream
FTSE 250 TSR FTSE 350 Financial Services TSR
Sep
2016
Dec
2016
Jun
2017
Dec
2017
Dec
2018
Dec
2019
Jun
2019
Jun
2018
Jun
2020
Dec
2020
Dec
2021
Jun
2021
The chart below shows the executive directors’ shareholdings compared to their shareholding requirements. Under the Remuneration Policy,
shares owned outright and those deferred shares that no longer have performance conditions attached count towards the shareholding
requirement. In the future, LTIP shares retained during the two-year post-vesting holding period will also count towards the requirements.
Shares which are not owned outright are shown net of tax (i.e. excluding that proportion of those shares expected to be sold on vesting
tosettle the associated tax liability). Both executive directors comfortably exceed their shareholding requirement.
Executive directors’ shareholdings (number of shares)
Luke Ellis (requirement = 300% of salary)
Shares owned outright
Shares no longer subject to performance conditions (net)
Antoine Forterre (requirement = 200% of salary)
498,935 shares
7,278,161 shares
% of salary
Shareholding requirement
1,200 1,400 1,600 1,800 2,000 2,2001,000800600200 4000
2.4 Executive director pay in the context of Man Group’s employees
In determining the appropriate remuneration for the executive directors, the Committee carefully considered conditions for employees across
the firm. A high calibre, motivated workforce, appropriately rewarded for their contributions, is a critical component of our success and the
table below illustrates remuneration paid to the executive directors in the context of the wider workforce.
Year ended
31 December
2021
Year ended 31
December
2020
Year ended
31 December
2020
illustrative
4
CEO – single total remuneration figure (SFT) ($’000) 8,503 3,150 5,075
Ratio of SFT to median UK employees
1
46:1 19:1 30:1
Compensation – all employees ($m)
2
644 446 446
Compensation ratio
3
40% 48% 48%
Number of bonus-eligible employees 1,386 1,367 1,367
Mean annual bonus award per bonus-eligible employee ($’000) 303 177 177
Median annual bonus award per bonus-eligible employee ($’000) 56 34 34
CEO SFT as % of total compensation of all employees 1.3% 0.7% 1.1%
Aggregate total SFT of all executive directors as % of total compensation of all employees 2.1% 1.1% 1.8%
1 See table R8 on page 116 for the full disclosure of the CEO ratio.
2 Compensation for all employees represents total fixed pay (salary, pension and benefits) and variable pay in respect of 2021.
3 Compensation ratio represents total compensation costs for all employees (fixed base salaries, benefits, variable bonus compensation and associated social security costs) as a proportion of net
revenue (gross management and other fees, performance fees, income or gains on investments and other financial instruments, and share of post-tax profits of associates, less distribution costs).
4 The column headed ‘Year ended 31 December 2020 – illustrative’ is included to aid understanding of the impact of the switch to the LTIP award, which means that no long-term variable pay was
included in the directors’ single figure disclosure in 2020. For illustrative purposes, an expected value of 50% of the face value of the LTIP award made inMarch 2021 has been assumed.
2. Remuneration at a glance continued
Directors’ Remuneration report
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3.1 Single total figure of remuneration for executive directors
The table below sets out a single figure for the total remuneration received by each executive director for the year ended 31 December 2021
and the prior year.
Single total figure of remuneration for executive directors (audited) – Table R1
All figures in USD
Executive directors Former executive director
Luke Ellis Antoine Forterre
1
Mark Jones
2
2021 2020 2021 2020 2021 2020
Salary 1,100,000 1,100,000 156,250 – 468,750 625,000
Taxable benefits
3
2,678 2,519 558 – 2,510 3,149
Pension benefits
4
134,812 135,206 12,214 – 53,454 7 7,711
Other
5
5,151 3,312 596 – 2 ,117 2,240
Total fixed remuneration 1,242,641 1,241,037 169,618 – 526,831 708,100
Short-term variable
6
2,708,750 1,909,371 351,563 – 1,101,563 1,069,245
Long-term variable
7
4,551,594 – – – – –
Total variable remuneration 7,26 0,344 1,909,371 351,563 – 1,101,563 1,069,245
Total 8,502,985 3,150,408 521,181 – 1,628,394 1,777,345
1 Antoine Forterre was appointed to the Board on 1 October 2021. Remuneration disclosed for 2021 reflects the period during the year that he was an executive director of the Company (1 October
to 31 December 2021).
2 Mark Jones stepped down from the Board on 1 October 2021. Remuneration disclosed for 2021 reflects the period during the year that he was an executive director of the Company (1 January
to1 October 2021).
3 Taxable benefits include private medical insurance.
4 Pension benefits are paid into the Man Group Self-Invested Personal Pension with any contributions exceeding the annual or lifetime allowance paid as cash on a cost neutral basis to the Company.
5 ‘Other’ includes non-taxable benefits (e.g. life insurance, Group income protection and fund fee rebates).
6 See table R2 for details of the short-term variable compensation award. The Committee has not applied any discretion to the formulaic outcome. Bonus amounts for Antoine Forterre and Mark
Jones are calculated on the basis of the salary they received for the period they served as executive directors.
7 The first award under the new Man Group plc LTIP was made in March 2019 for the three-year performance period ending on 31 December 2021. Vested shares will be delivered following a further
two-year holding period. See table R4 for details of the long-term variable compensation award. The value of the LTIP award for Luke Ellis shown in the above table is based on the average market
price of a share (£2.22) over the last quarter of 2021. The LTIP award was based on the market value of a Man Group plc share on 11 March 2019 being £1.3455. The value shown in the table
above therefore includes $2,255,776 which relates to share price growth over the performance period. Mark Jones stepped down from the Board prior to the end of the LTIP performance period
but remains an employee and retained his LTIP awards; there is no provision in the DRR regulations for the pro-ration of an LTIP in such circumstances and the value of the vested award has been
disclosed in section 3.10 ‘Payments to past directors’ on page 117. Antoine Forterre does not hold any LTIP awards as at 31 December 2021.
3.2 Annual bonus in respect of 2021 performance
The annual bonus is based on the Committee’s assessment of executive directors’ performance against objectives agreed by the Board at
the beginning of the year, split 70% based on quantitative metrics and 30% on qualitative performance. The threshold, target and maximum
ranges are considered by the Remuneration Committee to represent appropriately stretching levels of performance and are set by reference
to internal budgets and strategic plans, industry backdrop and external expectations, as covered in more detail in the Chair’s letter and
remuneration ‘at a glance’ section.
Table R2 shows the results of the Committee’s assessment of the performance delivered in 2021.
Annual bonus in respect of 2021 (audited) – Table R2
Financial metric Weighting 2020 actual
Threshold
(25% of max)
Target
(50%ofmax)
Maximum
(100% of max)
2021
outcome % achieved
Bonus
outcome, after
weighting (% of
maximum)
Increase in relative net flows 30% 4.6% 1.0% 3.5% 6.0% 9.8% 100% 30%
Core management Fee EPS 20% 10.3
1
11.3 12.3 13.3 15.7 100% 20%
Core EPS 20% 16.2
2
15.3 18.8 24.3 38.7 100% 20%
Total financial metrics 70% 70%
Luke Ellis Antoine Forterre Mark Jones
Non-financial metrics 30% 28.5% 20% 24%
Percentage of maximum annual
bonus awarded 98.5% 90% 94%
Quantum of award – total
3
$2,708,750 $351,563 $1,101,563
Quantum of award – paid in cash $1,354,375 $175,782 $550,782
Quantum of award – deferred $1,354,375 $175,781 $550,781
1 The financial metric was changed from Core Management Fee PBT to Core Management Fee EPS in 2021. As a result, the 2020 actual figure has been restated.
2 The financial metric changed from Core PBT to Core EPS in 2021. As a result, the 2020 actual figure has been restated.
3 50% of the bonus is paid in cash with the remaining 50% deferred into Man Group plc shares; when a director achieves their shareholding requirement, up to half the deferral may be into Man
Group funds and the balance into shares. No further performance conditions apply to the deferral, which vests in three equal tranches on the first, second and third anniversary of grant subject,
innormal circumstances, to continued employment.
3. Remuneration outcomes in 2021
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Assessment of performance against qualitative objectives
Key
Criteria fully met or exceeded Criteria partially met Criteria not met
Objective Outcome
Luke Ellis
Strategy
Develop Man Group’s strategic plan, key
business objectives and assessment of required
resources to be agreed by the Board
For the second year, delivered new peak AUM of $148.6billion and industry-leading net
inflows. The CEO’s strategic focus on people and technology delivered a performance
thatshows what Man Group is capable of in a year when markets go in our favour. The
combination of record net inflows, strong fund performance and good cost discipline
delivered growth in core management fee EPS and core EPS of 52% and 139% respectively
compared to 2020.
Risk, compliance and operations
Continue leading approach to compliance
andrisk management
Despite continued turbulence because of the global pandemic, the business transitioned
seamlessly between home, office-based and hybrid working. No operational events occurred
outside the Company’s risk appetite and the CEO sets the tone for a culture which maintains
a strong focus on risk and compliance.
Investment in growth
Develop new investment content and focus on
research and technology to support long-term
profitable growth
There was continued investment in growth including progress on the community housing
initiative and the development of the insurance business, culminating in the launch of Capital
Asset Solutions at the beginning of 2022. This team partners with insurance firms to provide
them with investment products tailored to their liabilities and asset management responsibilities.
External opportunities for non-organic growth continue to be kept under careful review.
Client relationships
Broaden and deepen Man Group’s client
relationships and enhance our reputation
The CEO’s success in this area is demonstrated by the breadth and range of new mandates
and, overall, delivered net inflows of $13.7billion in 2021. This was despite the continued
challenge of undertaking any global travel, as the pandemic continued, which limited the
opportunity for face-to-face meetings.
Continued investment in technology supported client needs, such as demands for increased
regulatory reporting, examples of which included: Solvency 2 for insurance clients, White list
exposure for Italian clients, counter cyclical buffer and VAG reporting for German clients.
Environmental impact
Improve Man Group’s environmental impact,
with a particular focus on how we manage
capital on behalf of our clients
To date, Man Group has classified 16 funds under Article 8 of the ESG-related Sustainable
Finance Disclosure Regulation (SFDR) which came into effect in March 2021. The new
Responsible Investment (RI) Marketing Campaign, built around the concept of intelligent RI,
and ESG Analytics Tool video was also launched in 2021.
The firm has signed up to the Net Zero Asset Managers initiative (to complement our existing
commitment to reach net zero operationally by 2030). This is a commitment specifically in
relation to investment and portfolio-born emissions, with the aim of achieving net zero across
all investment portfolios by 2050.
Social responsibility
Enhance Man Group’s reputation and impact
onwider society. Continue to mitigate the impact
of COVID-19 on our people, clients and wider
stakeholders. Promotion of appropriate culture
inthe business and of Man Group as a leading
organisation in the industry for diversity, with an
ongoing focus on actions to improve gender
balance in our management group
Having achieved our initial Women in Finance Charter goal of 25% women in senior
management by the end of 2020, new targets of 27.5% and 30% have been set for the end
of2022 and 2024 respectively; at the end of 2021 we were on track to achieve this with more
than 26% of senior management roles held by women. The focus on all types of diversity has
continued with Man Group registering as a UK Disability Confident Committed employer in
2021 as well as launching Neurodiversity and Social Mobility workstreams. Staff engagement
scores remained high at 8.1/10 with a participation rate of almost 80%.
Excellent governance
Ensure that the Company maintains governance
standards that meet or exceed requirements and
fairly balance the interests of all stakeholders
Work was completed in preparation for the implementation of IFPR (the Investment Firms
Prudential Regime).
Man Group is a signatory to the inaugural UK Stewardship Code 2020.
Antoine Forterre
Accurate, appropriate, clear, proactive
andtimely reporting
Ensure a smooth transition while maintaining
timely and pertinent reporting and management
information
Seamless transition into the new role and quickly completed recruitment for vacant roles.
Production of the detailed analysis to support the inclusion of ESG-related objectives
andmetrics into the new Directors’ Remuneration Policy.
Risk and controls
Continually review our risk management and
control processes to ensure we maintain our
industry-leading standards
There were no material risks or operational events and the seed book has continued
tobewell managed.
3. Remuneration outcomes in 2021 continued
Directors’ Remuneration report
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Objective Outcome
Capital management
Management of the firm’s capital base to support
growth, maintain appropriate capital strength
and improve shareholder returns over time.
Monitor potential acquisition opportunities
Responsible for an in-depth analysis of potential uses of cash and architect of the enhanced
share buyback programme announced in December which was well received by
shareholders.
Completed the finalisation of the set-up of Capital Asset Solutions that had been initiated
byhis predecessor.
Environmental impact
Improve Man Group’s environmental impact,
witha particular focus on how we operate our
own business
Led the detailed analysis of the calculation of ESG AUM to ensure our processes align with
reporting under SFDR article 8 and TCFD.
Social responsibility
Continue to mitigate the impact of COVID-19
onour people, clients and wider stakeholders.
Promotion of appropriate culture in the business
and of Man Group as a leading organisation in
the industry for diversity
Worked with BEAM (Black Employees and Allies at Man), one of our internal networks that
supports our diversity agenda, as part of their mentoring programme and introduced
Generating Genius on behalf of the Man Charitable Trust, with whom we ran a summer
programme for Black Women in Tech. Initiated the food bank programme in December, as
aresult of which $442k was donated on behalf of 841 participating employees to their local
food banks or homeless charity.
Corporate reputation
Continue to improve Man Group’s perception
and favourability with shareholders, financing
counterparties and wider corporate stakeholders
Undertook a series of shareholder meetings as part of the transition into the new role.
Mark Jones
Accurate, appropriate, clear, proactive
andtimely reporting
Maintain and improve timeliness, relevance and
quality of information to support informed and
effective decision-making across the business
Further automation including of VAT processes and month-end hedging has improved
efficiency and business reporting. The launch of ‘Adaptive’ has streamlined the compensation
process. The AUM system was rebuilt to reduce risk and provide more flexibility with
reporting and will go live in 2022.
Completed preparations for and facilitated a ‘dry run’ ahead of the implementation of TCFD
(Task Force on Climate-related Financial Disclosures) requirements.
Risk and controls
Continually review our risk management and
control processes to ensure we maintain our
industry-leading standards
There were no material risks or operational events consistent with a track record of excellent
risk management. Preparations were completed for the implementation of IFPR (the
Investment Firms Prudential Regime) which has implications for regulatory capital and
remuneration; the implementation has gone smoothly to date.
Capital management
Management of the firm’s capital base to support
growth, maintain appropriate capital strength
and improve shareholder returns over time.
Monitor potential acquisition opportunities
Led the detailed work on the new dividend policy and the launch of Capital Assets Solutions.
Potential acquisition opportunities were kept under careful review with excellent analysis
supporting decision-making.
Environmental impact
Improve Man Group’s environmental impact,
witha particular focus on how we operate our
own business
Launched pathway to net zero carbon.
In 2021 Man Group was listed in the top 300 of the Financial Times Climate Leaders list for
Europe for reducing core greenhouse gas emission intensity having achieved a reduction in
historical emissions.
Social responsibility
Enhance Man Group’s reputation and impact
onwider society. Continue to mitigate the impact
of COVID-19 on our people, clients and wider
stakeholders. Promotion of appropriate culture
inthe business and of Man Group as a leading
organisation in the industry for diversity
Mark continues as senior sponsor of the FAM (Families at Man) network, one of several
networks established to support employees in their personal and professional lives. He also
led the ‘Around the world in MANy ways’ challenge, to support and enhance connectivity
andmorale during periods of home working because of the pandemic.
Continued to deliver our commitments on gender diversity and carbon emissions allowing
usto access more favourable interest rates under the ESG-linked revolving credit facility.
Corporate reputation
Continue to improve Man Group’s perception
and favourability with shareholders, financing
counterparties and wider corporate stakeholders
The introduction of the new progressive dividend policy was well received and expanded
theuniverse of shareholders choosing to invest in Man Group’s shares.
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3.3 Vesting outcome in respect of the 2019 Long Term Incentive Plan
Long-term incentive awards are made under the Man Group plc Long-Term Incentive Plan (the LTIP). Awards vest at 0% for threshold
performance, 50% for target performance and 100% of the award will vest if the performance conditions are achieved in full, with straight-
linevesting between threshold and target and between target and maximum. The first award was made in March 2019 for the three-year
performance period from 1 January 2019 to 31 December 2021. The vesting of the 2019 LTIP was subject to the achievement of five
performance measures. The Committee has not applied any discretion to the formulaic outcome. The targets and vesting outcomes for
the2019 LTIP are shown in the table below:
Vesting outcome for 2019 LTIP award (audited) R3
Performance measures for 2019 LTIP Performance targets Actual performance
Measure Threshold Target Maximum Outcome
Percentage
met Weighting
LTIP outcome,
after weighting
Relative investment performance 0.0% 3.0% 6.0% -0.2% 0% 25% –
Cumulative net flows 3.0% 10.5% 18.0% 13.1% 67% 10% 7%
3-year cumulative core management fee EPS (cents) 33.0 36.0 39.0 35.7 45% 20% 9%
3-year cumulative core EPS (cents) 45.0 59.0 78.0 75.9 94% 20% 19%
Relative TSR vs FTSE 250 Median Mid 2nd
Quartile
1st Quartile Above 1st
Quartile
100% 25% 25%
Vesting of LTIP (% maximum) 60%
Vesting outcome for 2019 LTIP award (audited) R4
Date
of grant
Shares
awarded
1,2
Vesting
percentage
Number of
shares
vesting
Value of
shares
vesting
Vesting
date
End of
holding
period
Executive director
Luke Ellis 12 Mar 19 2,540,807 60% 1,515,125 $4,551,594 Mar–22 Mar–24
Former executive director
Mark Jones
3
12 Mar 19 1,414,766 60% 843,648 $2,534,407 Mar–22 Mar–24
1 Awards under the LTIP were made in March 2019 for the three-year performance period commencing on 1 January 2019 and ending on 31 December 2021; the proportion of the award which
hasvested was determined based on the measures, weightings and target ranges set out in the table above. The monetary value of these awards was converted into a number of shares using
theGBP/USD exchange rates of $1 = £0.7638 and a share price of £1.3455, being the market value on the immediately preceding dealing day to grant. This award attracts dividend accruals
fromgrant date to the end of the two-year holding period for vested shares. The awards are subject to a two-year holding period under the LTIP rules following which the shares will be delivered.
2 Includes additional dividend shares accruing during the vesting period.
3 Mark Jones stepped down from the Board on 1 October 2021; however, he remained within Man Group and as such he retains his LTIP awards.
3.4 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 – Table R5
2021
$m
2020
$m
%
change
Total employee expenditure
1
596 451 32
Shareholder distributions
2
340 254 34
1 Remuneration paid to or receivable by all employees (i.e. accounting cost). Refer to Note 7 to the financial statements for further details. Total employee expenditure excludes restructuring costs.
2 Distributions to shareholders (dividends paid of $147 million and repurchase of shares of $107 million in 2020, dividends paid of $160 million and repurchase of shares of $180 million in 2021).
3. Remuneration outcomes in 2021 continued
Directors’ Remuneration report
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3.5 Review of past performance
The performance graph below compares the Company’s Total Shareholder Return (TSR) performance against the FTSE 250 Index and the
FTSE 350 Financial Services Index. The FTSE 250 has been chosen as the primary comparator to align with the peer group used in the LTIP
in which 25% of the outcome is determined by the Company’s relative TSR performance compared to the FTSE 250 Index. Prior to 2019,
ManGroup had chosen the FTSE 350 Financial Services Index as the comparator group so it has also been shown below, for reference.
Total Shareholder Return graph (Jan 2012 – Dec 2021)
400
250
300
350
200
150
100
50
0
Man Group TSR
Source: Datastream
FTSE 250 TSR FTSE 350 Financial Services TSR
Jan
2012
Dec
2012
Dec
2013
Dec
2014
Dec
2015
Dec
2016
Dec
2018
Dec
2017
Dec
2021
Dec
2020
Dec
2019
Historical CEO remuneration – Table R6
Accounting period ended
31 Dec
2012
31 Dec
2013
31 Dec
2014
31 Dec
2015
31 Dec
2016
31 Dec
2017
31 Dec
2018
31 Dec
2019
31 Dec
2020
31 Dec
2021
CEO single figure ($’000) L Ellis
1
n/a n/a n/a n/a 1,347 6,215 2,856 2,804 3,150 8,503
E Roman
1
n/a 3,397 5,068 5,367 910 n/a n/a n/a n/a n/a
P Clarke
1
1,048 978 n/a n/a n/a n/a n/a n/a n/a n/a
Short-term variable award
(as a percentage of maximum
opportunity)
2
L Ellis
1
n/a n/a n/a n/a 40.2% 78.8% 58.3% 56.3% 69.4% 98.5%
E Roman
1
n/a 70% 100% 83.3% n/a n/a n/a n/a n/a n/a
P Clarke
1
n/a 0% n/a n/a n/a n/a n/a n/a n/a n/a
Long-term variable award
(as a percentage of maximum
opportunity)
2
L Ellis
1
n/a n/a n/a n/a 28.6% 46.2% n/a
3
n/a
3
n/a
3
60%
3
E Roman
1
n/a 17% 40% 40.7% n/a n/a n/a n/a n/a n/a
P Clarke
1
n/a 0% n/a n/a n/a n/a n/a n/a n/a n/a
1 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
andstepped down on 31 August 2016. Luke Ellis was appointed CEO on 1 September 2016. Remuneration for 2016, therefore, reflects four months’ service only.
2 For the accounting period ended 31 December 2012, as there was no cap on the overall maximum bonus awards, the percentage of maximum opportunity is not shown.
3 Awards under the LTIP were made in March 2019, March 2020, March 2021 and will be made in March 2022, vesting in March 2022, March 2023, March 2024 and March 2025 respectively,
withasubsequent two-year holding period.
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3.6 Percentage change in directors’ remuneration
The table below sets out the percentage change in remuneration for the directors compared to all staff. This requirement was introduced in
2020 and therefore the data will progressively build up to cover a five-year period. There are no employees of the Parent Company, other than
the executive directors, so the comparison has been made, on a voluntary basis, to all staff.
Percentage change in directors’ remuneration – Table R7
2021 2020
Salary/fees Benefits
1
Bonus Salary/fees Benefits Bonus
Executive directors
Luke Ellis 0% 6% 42% 0% -9% 23%
Antoine Forterre
2
– – –
Former executive director
Mark Jones
3
0% 6% 37% 2% -11% 22%
Non-executive directors
John Cryan 0% 273% – 400% -4% –
Dame Katharine Barker
4
1% -6% – 10% 1,153% –
Lucinda Bell
5
6% 618% – – – –
Richard Berliand
6
-10% -40% – 8% 341% –
Zoe Cruz 0% -100% – 10% -78% –
Ceci Kurzman
7
0% – – – – –
Dev Sanyal 0% -44% – 6% 10% –
Anne Wade
8
15% – – – – –
All staff
9
3%
10
15%
10
84%
11
4%
10
22%
10
-15%
11
1 Taxable benefits include private medical insurance for executive directors and includes travel and staff entertainment expenses and the tax paid in relation to such benefits for non-executive
directors. The percentage change in benefits for the non-executive directors should be read in conjunction with the data showing actual taxable benefits in table R9 (page 117) which shows that
the large percentage movements recorded above are explained by movements in small absolute numbers.
2 Antoine Forterre was appointed to the Board on 1 October 2021 and therefore a percentage change has not been disclosed.
3 Mark Jones stepped down from the Board on 1 October 2021, however the salary, benefits and bonus that he received as an executive director have been annualised for the purposes of
calculating the percentage change.
4 Dame Katharine Barker was appointed as a member of the Audit and Risk Committee on 1 December 2021 and therefore the increase in total fees has been reflected in the percentage change
calculation.
5 Lucinda Bell was appointed to the Board on 28 February 2020 and for the purposes of the disclosure above her 2020 Board fees have been annualised.
6 Richard Berliand stepped down as Chair of the Remuneration Committee on 7 May 2021 and therefore the decrease in total fees has been reflected in the percentage change calculation.
7 Ceci Kurzman was appointed to the Board on 28 February 2020 and for the purpose of the disclosure above her 2020 Board fee has been annualised.
8 Anne Wade was appointed to the Board on 30 April 2020 and for the purpose of the disclosure above her 2020 Board fees have been annualised.
9 Figures are calculated on an annualised FTE basis (excluding directors).
10 Represents the average increase in salary and taxable benefits in underlying currency in which each member of staff is paid.
11 For staff, bonus includes both variable cash compensation and deferred awards relating to the current year.
3.7 CEO pay ratio
The table below compares the 2021 single total figure of remuneration for Luke Ellis with that of Man Group’s UK employees who are paid
atthe 25th percentile (lower quartile), 50th percentile (median) and 75th percentile (upper quartile).
Table R8
Year Method
25th percentile
pay ratio
50th percentile
pay ratio
75th
percentile
pay ratio
2021 A 74:1 46:1 25:1
2020 A 29:1 19:1 11:1
2019 A 26:1 17:1 10:1
The ratio of CEO pay to the median UK employee is higher in 2021 compared to both 2020 and 2019. The Committee considered that
thismovement was largely explained by the vesting of the CEO’s 2019 LTIP award. This is the first time since 2017 that the CEO’s total
remuneration has included a long-term award, following the switch from the DEIP to the LTIP. The value at vesting of the 2019 LTIP has
benefited from good share price growth since it was granted. The Committee noted that mean employee bonuses for 2021 were 71% higher
than in 2020, compared with an increase of 42% in the CEO’s short-term variable pay. The Committee was satisfied that the outcomes for
both the CEO and the wider workforce were appropriate, given the exceptional performance that Man Group delivered in 2021.
3. Remuneration outcomes in 2021 continued
Directors’ Remuneration report
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3.7 CEO pay ratio continued
The ratio has been calculated using Option A methodology, which uses actual employee data. The Committee considered this to be the most
accurate approach. Total full-time equivalent remuneration for people employed for the full 12-month period ending on 31 December 2021
hasbeen calculated in line with the methodology for the ‘single figure of remuneration’ for the CEO (Table R1, page 111). This data was then
ranked to identify the individuals at the 25th, 50th and 75th percentiles and the salary and total pay and benefits for the three identified quartile
point employees is shown in the table below.
All figures in USD 25th percentile 50th percentile 75th percentile
Salary 96,212 137,4 4 6 219,913
Total pay and benefits 114,5 53 185,397 343,241
3.8 Retirement benefits
Luke Ellis and Antoine Forterre (as current executive directors) and Mark Jones (as a former executive director) are not eligible for any defined
benefits under the Man Group plc Pension Plan.
3.9 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2021 and the prior year.
Single total figure of remuneration for non-executive directors (audited) – Table R9
Fees Taxable benefits
7
Total
All figures in GBP 2021 2020 2021 2020 2021 2020
John Cryan (Chair)
1
350,000 350,000 42,927 11,508 392,927 361,508
Dame Katharine Barker
2
93,750 92,500 1,275 1,353 95,025 93,853
Lucinda Bell
3
123,333 75,346 625 87 123,958 75,433
Richard Berliand
4
121,975 135,000 817 1,353 122,792 136,353
Zoe Cruz 92,500 92,500 – 2,495 92,500 94,995
Ceci Kurzman
5
75,000 62,788 1,925 – 76,925 62,788
Dev Sanyal 90,000 90,000 817 1,452 90,817 91,452
Anne Wade
6
94,673 60,346 33,020 – 127,693 60,346
1 John Cryan’s contractual arrangements with his former employer, Deutsche Bank AG, mean that he is effectively unpaid for his role as Chair of Man Group plc, as he is required to sacrifice his
post-tax receipts arising from his Man Group role to Deutsche Bank AG.
2 Dame Katharine Barker was appointed as a member of the Audit and Risk Committee with effect from 1 December 2021.
3 Lucinda Bell was appointed to the Board on 28 February 2020 and took over from Andrew Horton as the Chair of the Audit and Risk Committee on 1 May 2020. Her remuneration for 2020 was
pro-rated accordingly. Due to an administrative error, Lucinda was underpaid by £13,333 during 2020. The relevant adjustments have been made in 2021 to correct the position.
4 Richard Berliand stepped down as Chair of the Remuneration Committee on 7 May 2021. The decrease in total fees is reflected above.
5 Ceci Kurzman was appointed to the Board on 28 February 2020. Her remuneration for 2020 was pro-rated accordingly.
6 Anne Wade was appointed to the Board on 30 April 2020. Her remuneration for 2020 was pro-rated accordingly. Anne was appointed as Chair of the Remuneration Committee on 7 May 2021.
Theincrease in total fees is reflected above. Due to an administrative error, Anne was overpaid by £3,333 during 2020. The relevant adjustments have been made in 2021 to correct the position.
7 Taxable benefits comprise travel and staff entertainment expenses and the tax paid in relation to such benefits.
3.10 Payments for loss of office (audited)
There were no payments for loss of office made to executive directors during the year.
3.11 Payments to past directors (audited)
Mark Jones stepped down from the Board on 1 October 2021 and took up the role of Deputy CEO. As such, he retains his rights to his
outstanding LTIP awards and the value of his 2019 award was $2,534,407 as shown in table R4 on page 114.
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3.12 Directors’ interests
Directors’ interests in shares of Man Group plc (audited) – Table R10
Number of
ordinary
shares
1
31 December
2021
2
Number of
ordinary shares
1
31 December
2020
Executive directors
Luke Ellis 6,501,709 5,548,466
Antoine Forterre
3
– –
Former executive director
Mark Jones
4
1,629,349 1,434,438
Non-executive directors
John Cryan – –
Dame Katharine Barker 49,834 47,813
Lucinda Bell – –
Richard Berliand 75,000 50,000
Zoe Cruz – –
Ceci Kurzman – –
Dev Sanyal 90,496 86,825
Anne Wade – –
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 2021 up to 28 February 2022, being the latest practicable date prior to the
publication of this report.
3 Antoine Forterre was appointed to the Board on 1 October 2021. Details of Antoine’s interests in shares and options under Man Group long-term incentive plans can be found in tables R11, R12
and R16.
4 Mark Jones stepped down from the Board as at 1 October 2021 and therefore the shareholding disclosed is as at that date.
Executive directors’ shareholdings measured against their respective shareholding requirement as at 31 December 2021
(audited) – Table R11
Shares owned
outright
Shares no longer
subject to
performance
conditions
1
Total
shareholding
2
Value of
shareholding
3
(USD)
Annual salary
(USD)
Shareholding
requirement as
a % of salary
Current
shareholding
as a % of
salary
Requirement
met?
Executive directors
Luke Ellis 6,501,709 776,452 7, 2 78 ,161 22,39 6,188 1,100,000 300% 2036% Yes
Antoine Forterre
4
– 498,935 498,935 1,535,311 625,000 200% 246% Yes
Former executive director
Mark Jones
5
1,629,349 582,313 2,211,6 62 6,069,729 625,000 200% 971% Yes
1 Unvested deferred shares and vested LTIP shares are shown on a net of tax basis. Details of unvested awards can be found in Tables R13, R14 and R16.
2 Shares that count towards achievement of the policy are limited to: (i) shares owned outright; (ii) deferred shares granted under the Deferred Executive Incentive Plan (DEIP), Deferred Share Plan
(DSP) and Partner Deferred Share Plan (PDSP), which are no longer subject to performance conditions and (iii) vested LTIP shares which are no longer subject to performance conditions and
which will be delivered at the end of the two-year holding period.
3 Shareholding for Luke Ellis and Antoine Forterre valued at 31 December 2021 share price of £2.2740 and a GBP/USD exchange rate of £1 = $1.3532. Shareholding for Mark Jones valued at
1 October 2021 share price of £2.0260 and a GBP/USD exchange rate of £1 = $1.3546.
4 Antoine Forterre was appointed to the Board as CFO on 1 October 2021. Details of Antoine Forterre’s interests in Man Group shares can be found in tables R12 and R16.
5 The details for Mark Jones are as at 1 October 2021, being the date he stepped down from the Board.
3. Remuneration outcomes in 2021 continued
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3.13 Directors’ interests in shares and options under Man Group long-term incentive plans
Scheme interests to be awarded under the Man Group plc Long-Term Incentive Plan (LTIP)
1
– Table (audited) R12
Award (% of
salary)
Award value
2
(USD)
Vesting
date
End of holding
period date
Executive director
Luke Ellis 300% 3,300,000 Mar–25 Mar–27
Antoine Forterre 300% 1,875,000 Mar–25 Mar–27
1 Awards under the LTIP will be made in March 2022 for the three-year performance period commencing on 1 January 2022 and ending on 31 December 2024; the proportion of the award which
vests will be determined based on the measures, weightings and target ranges set out in table R21 (page 122). 0% of the award will vest at threshold with straight-line vesting between threshold
and target and target and maximum performance. 100% of the award will vest for maximum performance.
2 The face value of the awards represent 300% of salary (previously 350%). The monetary value of these awards will be converted into a number of shares using the USD/GBP exchange rate and the
market value on the immediately preceding dealing day to grant. The awards will be granted as conditional awards of shares and will vest, to the extent the performance conditions have been
achieved, three years later and will then be subject to a further two-year holding period, under the LTIP rules, following which shares will be delivered. These awards attract dividend accruals from
grant date to the end of the two-year holding period for vested shares.
Conditional share awards under the Long-Term Incentive Plan (LTIP) – subject to performance conditions or holding period
(audited) – Table R13
Date of grant 1 January 2021
Granted during
the year
1,2
Lapsed during
the year
Dividends
accruing
3
31 December
2021 Vesting date
4
End of holding
period
5
Executive director
Luke Ellis Mar–19 2,436,256 – – 104,551 2,540,807 Mar–22 Mar–24
Mar–20 3,196,495 – – 137,178 3,333,673 Mar–23 Mar–25
Mar–21 – 1,784,535 – 76,583 1,861,118 Mar–24 Mar–26
Former executive director
Mark Jones
6
Mar–19 1,356,550 – – 58,216 1,414,766 Mar-22 Mar-24
Mar–20 1,816,189 – – 7 7, 9 42 1,894,131 Mar-23 Mar-25
Mar–21 – 1,013,940 – 43,513 1,057,453 Mar-24 Mar-26
1 The performance measures for these awards are: relative investment performance (25%), relative TSR versus FTSE 250 (25%), 3-year cumulative core management fee EPS (10%), 3-year
cumulative core EPS (30%) and cumulative net inflows (10%). The targets were disclosed in detail in the 2020 DRR.
2 The awards under the LTIP were granted in March 2021 for the three-year performance period commencing on 1 January 2021 and ending on 31 December 2023. The monetary value of these
awards was $3,850,000 for Luke Ellis and $2,187,500 for Mark Jones, each representing 350% of base salary converted into a number of shares using the GBP/USD exchange rates of £1 =
$1.3968 and a share price of £1.5445, being the market value on the immediately preceding dealing day to grant. The awards have been granted as conditional awards of shares and will vest,
tothe extent the performance conditions have been achieved, three years later and will then be subject to a further two-year holding period, under the LTIP rules. These awards attract dividend
accruals from grant date to the end of the two-year holding period for vested shares.
3 On 21 May 2021, dividend accruals of 176,652 and 99,711 shares were added to Luke Ellis and Mark Jones’s awards respectively
based on a sterling dividend of 4.10 pence. On 3 September
2021, dividend accruals of 141,660 and 79,960 shares were added to Luke Ellis and Mark Jones’s awards respectively based on a sterling dividend of 4.06 pence.
4 Awards vest at 0% at threshold, 50% at target and 100% at maximum, with straight-line vesting between these points.
5 Vested shares are delivered to participants at the end of a two-year holding period
6 Mark Jones stepped down from the Board on 1 October 2021 but continues to be an employee of Man Group. He has therefore retained the awards granted to him under the LTIP, which will
continue to vest in the ordinary course subject to the plan rules.
Conditional share awards under the Deferred Executive Incentive Plan (DEIP) – subject only to service conditions (audited) –
Table R14
Date of grant
1
1 January
2021
Vested during
the year
Lapsed during
the year
Dividends
accruing
2
31 December
2021 Date vested
Executive director
Luke Ellis Mar–17
3
221,904 110,9 52 – 4,761 115,713 Mar-21
Mar–18
4
1,16 0,5 34 386,844 – 33,202 806,892 Mar-21
Former executive director
Mark Jones
5
Mar–18
4
557,394 185,797 – 15,946 387,543 Mar-21
1 No further awards are to be granted under the DEIP following the adoption of the LTIP.
2 On 21 May 2021, dividend accruals of 21,068 and 8,850 shares were added to Luke Ellis and Mark Jones’s awards respectively based on a sterling dividend of 4.10 pence. On 3 September 2021,
dividend accruals of 16,895 and 7,096 shares were added to Luke Ellis and Mark Jones’s awards respectively based on a sterling dividend of 4.06 pence.
3 Remaining award vests in March 2022.
4 Award vests in two equal instalments in March 2022 and March 2023.
5 Mark Jones stepped down from the Board on 1 October 2021 but continues to be an employee of Man Group. He has therefore retained the awards granted to him under the Deferred Executive
Incentive Plan, which will continue to vest in the ordinary course subject to the plan rules.
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3.13 Directors’ interests in shares and options under Man Group long-term incentive plans continued
Options granted under the Man Group Deferred Share Plans – not subject to service conditions (audited) – Table R15
Date of grant
1 January
2021
Lapsed
during period
31 December
2021
Option
exercise price
Lapsed
date
3
Latest
exercise date
Executive director
Luke Ellis
1
Deferred Share Plan (KEOP)
Ma r-11 407,463 407,4 6 3 – 267.08p Mar-21 Mar–21
Former executive director
Mark Jones
2
Partner Deferred Share Plan (POP)
Ma r-11 356,110 356,110 – 308.55p Mar-21 Mar–21
1 Luke Ellis was granted KEOP options under the Deferred Share Plan prior to his appointment as a director. All options are vested.
2 Mark Jones was granted a POP option under the Partner Deferred Share Plan prior to his appointment as a director. All options are vested.
3 The options expired as they were under water throughout the lifetime of the award.
Options granted under the Man Group Deferred Share Plans – subject only to service conditions (audited) – Table R16
Date of grant
1 January
2021
Granted during
the year
Exercised/
vested during
the year
Lapsed during
the year
Dividends
accruing
9
31 December
2021
Exercised/
vested date
Executive directors
Luke Ellis Deferred Share Plan (DSP)
Mar-19
1
169,082 – 84,540 – 3,627 88,169 Mar-21
Mar-20
2
321,433 – 107,144 – 9,194 223,483 Mar-21
Mar-21
3
– 221,255 – – 9,492 230,747 –
Antoine Forterre
4
Partner Deferred Share Plan (PDSP)
Mar-18
5
127,5 84 – – – – 127,58 4 –
Mar-19
6
18,307 – – – – 18,307 –
Mar-20
5
432,941 – – – – 432,941 –
Mar-21
5
362,554 – – – – 362,554 –
Former executive director
Mark Jones
7
Deferred Share Plan (DSP)
Mar-17
8
340,383 – – – 14,606 354,989 –
Mar-19
1
192,364 – 96,182 – 4,126 100,308 Mar-21
Mar-20
2
182,157 – 60,719 – 5,210 126,648 Mar-21
Mar-21
3
– 123,902 – – 5,313 129,215 –
1 Remaining award vests in March 2022 and is exercisable until March 2029.
2 Remaining award vests in two equal instalments in March 2022 and March 2023. All are exercisable until March 2030.
3 Award vests in three equal instalments in March 2022, March 2023 and March 2024. All are exercisable until March 2031.
4 Antoine Forterre was granted conditional awards under the Partner Deferred Share Plan prior to his appointment as a director. The opening balance of options for Antoine Forterre under the PDSP
are shown as at 1 October 2021, being the date he was appointed to the Board.
5 Award vests in single instalment in March 2022 with shares delivered upon vesting.
6 Remaining award vests in March 2022 with shares delivered upon vesting.
7 Mark Jones stepped down from the Board on 1 October 2021 but continues to be an employee of Man Group. He has therefore retained all deferred bonus awards, which will continue to vest
inthe ordinary course subject to the plan rules.
8 Mark Jones was granted nil-cost options under the Deferred Share Plan prior to his appointment as a director. Award vests in a single instalment in March 2022 and will be exercisable until March
2027.
9 On 21 May 2021, dividend accruals of 12,383 and 16,237 shares were added to Luke Ellis and Mark Jones’s awards respectively based on a sterling dividend of 4.10 pence. On 3 September 2021,
dividend accruals of 9,930 and 13,018 shares were added to Luke Ellis and Mark Jones’s awards respectively based on a sterling dividend of 4.06 pence.
3. Remuneration outcomes in 2021 continued
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3.13 Directors’ interests in shares and options under Man Group long-term incentive plans continued
Options granted under the Man Group Sharesave Scheme (audited) – Table R17
Number of options
Date of grant
1 January
2021
Granted during
the year
Exercised
during the
period
Lapsed during
the year
31 December
2021 Option price
Earliest
exercise date
Latest exercise
date
Executive director
Luke Ellis Se p-17 11,36 3 – – – 11,363 132.0p Oct–22 Mar–23
Sep-19 11,811 – – – 11,811 127. 0 p Oct–24 Mar–25
Former executive director
Mark Jones
1
Sep-17 13,636 – 13,636
2
– – 132.0p Oct–20 Mar–21
Sep-20 16,822 – – – 16,822 107.0 p Oct–23 Mar–24
1 Mark Jones stepped down from the Board on 1 October 2021 but continues to be an employee of Man Group. He has therefore retained options granted to him under the Man Group Sharesave
Scheme.
2 Option exercised on 23 March 2021.
3.14 Shareholder voting and engagement
At the AGM held on 7 May 2021, votes cast by proxy and at the meeting in respect of directors’ remuneration were as follows:
Table R18
Resolution Votes for % for Votes against % against Total votes cast
Votes withheld
(abstentions)
Approve the annual report on remuneration 1,024,182,858 91.9 90,034,570 8.1 1,114,217,428 147,613
Approve the Directors’ Remuneration Policy 1,013,815,138 91.9 89,889,567 8.1 1,103,704,705 10,660,336
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4.1 Base salary
Salaries are reviewed annually taking into account market benchmarks for executives of comparable status, responsibility and skill.
Base salary of executive directors – Table R19
Base salary at Luke Ellis
Antoine
Forterre
1
1 January 2021 $1,100,000 –
1 January 2022 $1,100,000 $625,000
1 Antoine Forterre was appointed to the Board on 1 October 2021.
4.2 Annual bonus for 2022
The following table shows the performance metrics and weightings for the annual bonus in 2022. The Committee considers that the
disclosure of detailed performance targets in advance for 2022 would be commercially sensitive and they are not, therefore, disclosed here.
Table R20
Metrics Weighting %
Relative Net Flows, growth % 30%
Core Management Fee EPS 20%
Core EPS 20%
Strategic and Personal 15%
ESG objectives 15%
Total 100%
4.3 Long-Term Incentive Plan for 2022
The threshold to maximum ranges for the Man Group plc LTIP are set out in the table below. Awards vest at 0% at threshold, 50% at target
and 100% at maximum, with straight-line vesting between these points. Vested awards are subject to a two-year holding period.
Table R21
Metrics Threshold Target Maximum Weighting %
Relative Investment Performance 0% 3% 6% 20%
Relative TSR vs FTSE 250 Median
Mid-point between
Median and Upper
Quartile
Upper
Quartile 20%
3-year Cumulative Core Management Fee EPS, cents 46¢ 51¢ 56¢ 10%
3-year Cumulative Core EPS, cents 58¢ 76¢ 95¢ 30%
Cumulative Relative Net Flows 0% 9% 18% 10%
ESG scorecard
1
10%
Total 100%
1 The ESG scorecard metric includes the following equally weighted objectives: To increase the number of women in senior positions (threshold 27.5%, target 28.75% and maximum 30%), to reduce
scope 1 to 3 emissions per FTE (threshold 5.07 MTCO
2
e, target 4.76 MTCO
2
e and maximum 4.32 MTCO
2
e) and to grow the percentage of ESG-integrated AUM excluding market beta (threshold
24%, target 36% and maximum 48%).
4.4 Non-executive directors’ Remuneration Policy for 2022
There have been no changes to the fees for the Chair or non-executive directors since last year.
Non-executive directors’ fees for 2022 – Table R22
Position (all figures in GBP) 2022 2021 % change
Chair of the Board
1
350,000 350,000 –
Board fee
2
75,000 75,000 –
Senior Independent Director 15,000 15,000 –
Audit and Risk Committee Chair 35,000 35,000 –
Other Audit and Risk Committee members 15,000 15,000 –
Employee Engagement NEDs 7,500 7,500 –
Remuneration Committee Chair 30,000 30,000 –
Other Remuneration Committee members 10,000 10,000 –
1 Chair does not receive Board or Committee membership fees.
2 Includes Nomination Committee membership where appropriate.
4. Implementation of Directors’ Remuneration Policy for 2022
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5.1 Membership and attendance
The Committee met seven times during 2021 with attendance by members as indicated on page 68. All members held office throughout the
year. In addition, certain urgent proposals relating to the retention of awards by good leavers were circulated and agreed by email in between
meetings.
Committee meetings are regularly attended by the CEO and, where appropriate, by the CFO at the invitation of the Chair. The Committee is
supported by the Senior Reward Executive, who routinely attends, as do the Heads of HR for UK and EEA and Rest of World (RoW). Other
members of the Legal, Compliance and Executive Incentive Plans teams 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.
At the end of each meeting there is an opportunity for private discussion between Committee members without the presence of executive
directors and management.
Roles and responsibilities
The Committee’s principal responsibilities are to:
• Determine the Company’s remuneration philosophy and the principles and structure of its Remuneration Policy, ensuring that these support
and promote the long-term sustainable success of the Company and are in line with the Company’s purpose and values, business strategy,
objectives, risk appetite and long-term interests and comply with all regulatory requirements and promote long-term shareholder and other
stakeholder 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.
• Approve 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 for the short-term annual bonus and at the start of the relevant performance period for
theLTIP.
• Recommend to the Board the remuneration of the Board Chair.
• Approve the total annual compensation for Executive Committee members, the Company Secretary and Remuneration Code staff.
• Review and consider shareholder and proxy voting agencies feedback and agree the approach to ongoing engagement.
The Committee’s decision-making process takes account of legislation, regulation, corporate governance standards, guidance issued by
regulators, shareholders and shareholder representative bodies. As covered in section 5.2, the Committee has independent external advisers
and reviews their objectivity and independence annually. To avoid conflicts of interest, no Committee member or attendee is present when
matters relating to his or her own remuneration are discussed. Full terms of reference for the Committee, which are reviewed on an annual
basis and submitted to the Board for approval, are available on the Company’s website: www.man.com/corporate-governance.
5.2 Independent advisers
Following a formal tender process in July 2017, the Committee appointed PricewaterhouseCoopers (PwC) to provide it 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. PwC also provide professional services in the ordinary course of business including tax and related advisory work
to parts of Man Group. There are processes in place to ensure the advice received by the Committee is independent of any support provided
to management. The Committee is satisfied on this basis that PwC are able to serve as an objective and independent remuneration adviser.
The total fees paid to PwC in 2021 were £110,000 (ex. VAT) on the basis of agreed fixed fees. The Committee also received legal advice from
Herbert Smith Freehills LLP on compliance with legislation and regulations relating to remuneration matters.
5. Remuneration Committee
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5.3 Committee activities during 2021 and the early part of 2022
The summary below sets out the main issues considered and decisions made by the Committee in the period following the publication
ofthe2020 Directors’ Remuneration report up to the current date.
Chair’s fee
• Reviewed the fee level of the Chair in the context of benchmarking of similar roles in broadly equivalent-sized companies in the financial
services sector and of the demands of the role and recommended to the Board that this should remain unchanged.
Executive director compensation
• Reviewed the Directors’ Remuneration Policy as set out in detail in the Chair’s statement.
• Established the total remuneration arrangements for the new CFO ahead of his appointment.
• Established the threshold, target and maximum ranges to be achieved for the financial metrics and recommended to the Board for approval
the objectives to be delivered under the non-financial component of the annual bonus.
• Assessed the 2021 performance, against the financial and non-financial metrics of the annual bonus, of the CEO and both CFOs who
served during the year and considered whether any discretionary intervention was required to adjust the formulaic outcome; approved
thetotal cash sum payable and the amount to be deferred.
• Reviewed the level of achievement of each executive director in respect of their shareholding requirement and consequently determined
that the option to defer up to 50% of the bonus deferral amount into funds could be offered.
• Reviewed the peer group used for benchmarking the CEO and CFO roles as set out in more detail in section 5.5.
• To provide the business context for all the above reward decisions, reviewed the available benchmarking for the CEO and CFO roles within
the selected peer group.
Shareholder engagement and reporting
• Reviewed shareholder voting and feedback on the 2021 AGM resolutions for the DRR and Directors’ Remuneration Policy renewal, noting
the substantial level of support.
• Consulted with the top 21 shareholders, representing almost 60% of the shareholder base, and the main proxy advisory groups as part
ofthe consideration of the new Directors’ Remuneration Policy.
• Reviewed the 2021 DRR taking account of best practice recommendations and institutional shareholder guidelines.
Compensation below Board level
• Reviewed, challenged and approved the 2021 bonus pool proposed by management in relation to the Company’s performance for the
year.
• Approved bonus deferral policies for different groups of staff.
• Approved total compensation proposals for Executive Committee members, taking account of the CEO’s appraisal of their individual
performance for 2021 and their adherence to the Company’s business values.
• Approved the total compensation for individuals identified as Remuneration Code staff.
• Approved the total compensation for the Company Secretary.
• Retained oversight of the total compensation for staff earning over $1million, taking account of the CEO’s appraisal of their performance
for2021 and reports from the Risk and Compliance functions on any related risk issues arising during the year.
• Reviewed the approach to wider workforce compensation, including by reference to gender and ethnicity metrics.
• Reviewed the ratio of CEO pay to the lower quartile, median and upper quartile remuneration paid to UK employees (see pages 116
and117).
Financial regulation and governance
• Reviewed ongoing regulatory developments on remuneration and their implications for the Company’s business, including the new
MIFIDPRU Remuneration Code introduced by IFPR.
• Reviewed the Company’s FCA Remuneration Policy Statement and the Company’s Remuneration Policy.
• Approved the list of Remuneration Code staff for 2022.
5. Remuneration Committee continued
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5.4 2021 Committee evaluation
Following a mid-year review by the Chair of the 2021 priority actions identified in the Committee’s 2020 evaluation, an independent external
consultant undertook a full-year evaluation of the operation and effectiveness of the Committee during 2021. The topics covered included
progress on the priorities for 2021 and the conduct and outcomes of specific areas of Committee activity and focus during the year, including
the support and advice available to the Committee.
In the evaluation feedback, the Committee again acknowledged the quality of the advice provided by its advisers and the thorough and
professional papers delivered to the Committee to support its decision-making. The following specific areas of focus were agreed for 2022:
• Deliver the 2021 DRR.
• Continue the Committee’s engagement with shareholders as appropriate.
• Keep under review the ESG-related metrics to be introduced into the bonus and LTIP to ensure they are incentivising appropriate
behaviours and performance.
• Further deepen the Committee’s understanding of compensation below the Board and build on previous analysis of workforce
remuneration by reference to gender and other diversity metrics; ensure this is considered in discussions about the level and
appropriateness of executive director compensation.
• Continue to maintain the Committee’s oversight of the implementation by the Company of the MIFIDPRU Remuneration Code introduced
on 1 January 2022 by the Investment Firms Prudential Regime.
• Keep the remuneration advice and industry knowledge available to the Committee under review as a matter of ongoing good governance.
5.5 Benchmarking and peer groups
Benchmarking is one of several 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 Group’s competitors for similar positions and which they may be offering in the
marketplace. The 2020 DRR set out the Committee’s intention to undertake a review of the peer group during 2021 with a view to considering
whether there are any other competitors with similar characteristics to Man Group plc, especially in Europe. This review has now been
completed and the Committee concluded that the most relevant peers continued to be those UK and US listed companies, set out below.
Although the review identified a small group of European companies that Man Group would regard as competitors for talent, the combination of their
different business models and the lack of availability of comparative compensation data means that the Committee did not think it was appropriate
toinclude them in the peer group at this stage. It will, however, periodically review the peer group to ensure it remains relevant and appropriate.
Many of Man Group’s senior staff are geographically mobile, particularly between London and New York, and an explicit consideration of
remuneration levels in both geographies is highly relevant. Man Group is one of the few listed companies anywhere in the world that operates
in the liquid alternative investment industry. Most businesses in this industry are privately owned and systematic remuneration data is not
publicly available; consequently, the Committee decided, as part of its review for benchmarking purposes, to remove those unlisted
companies it had previously identified formally as part of the peer group. Man Group does compete for talent against these businesses
andstaff do move between Man Group and these private companies so, as part of its understanding of the broader business context, the
Committee will continue to review available information on privately owned peers as well as the direct information about remuneration in
thoseprivately held companies that Man Group has acquired.
UK listed peer group US listed peer group
3i Jupiter Affiliated Managers Blackstone
abrdn M & G Apollo Global Management Carlyle
Ashmore Ninety-One Ares Federated Hermes
Close Brothers Schroders Artisan Partners Janus Henderson
Intermediate Capital Group TP ICAP BlackRock KKR
Unless otherwise stated, all information in the DRR is unaudited. As the Company is Jersey-incorporated, it is not subject to the provisions
ofthe UK Companies Act 2006 and therefore information on the directors’ remuneration in the DRR is included on a voluntary basis.
Thedisclosures contained in the DRR relate to the Company’s statutory directors (as set out on page 72 and 73 of the Annual Report) only.
Inrespect of those directors, the disclosures are prepared in line with the provisions of the UK Companies Act 2006.
The information in the DRR should be read in conjunction with Man Group’s APMs, outlined on pages 183 to 187.
For and on behalf of the Board
Anne Wade
Chair of the Remuneration Committee
28 February 2022
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Man Group plc | Annual Report 2021
Directors’ Remuneration report
6.1 Executive directors’ Remuneration Policy
This section of the report sets out the Remuneration Policy for executive and non-executive directors which will be put to shareholders for
approval and, if approved, be effective from the conclusion of the 2022 AGM on 6 May 2022 for the following three years.
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. The current policy has operated broadly as intended and, as set out in the Chair’s statement, the Committee is
proposing the following changes which it believes will enhance the existing policy:
• Equalise short and long-term incentive opportunities so each represent 300% of salary (currently at 250% and 350% of salary respectively).
• Increase bonus deferral to 55% (currently at 50%).
• Introduce ESG-related objectives and metrics into the bonus and LTIP.
In line with shareholders’ interests being managed within a robust governance framework, the Company continues to aim to retain and
incentivise high calibre executive directors; it will do this by paying a competitive base salary and benefits, together with a short-term annual
bonus, with significant deferral, and a long-term incentive plan collectively linked to a range of financial and non-financial metrics and
objectives to deliver the Company’s strategy and ensure alignment with shareholder interests.
Decision making process
As described in the Chair’s statement, during 2021 the Directors’ Remuneration Policy has been reviewed in consultation with some of the
Company’s shareholders. In October 2021, we wrote to 21 of our largest shareholders and the main shareholder representative bodies to
consult on our proposed new policy. Shareholders were offered the opportunity to discuss the changes with the Committee Chair and Senior
Reward Executive. We were pleased that the majority of shareholders contacted took the time to engage with us and helped to inform the
policy being proposed. The Committee also considered input from management and from its independent advisers, as well as taking account
of latest market practice and corporate governance developments. Any potential conflicts of interest were managed by ensuring that no
individual was present when their own remuneration arrangements were discussed and that the proposed changes aligned to the firm’s
strategy, values and culture.
In compliance with the UK Corporate Governance Code (2018) (the Code), we have set out below how the Committee addresses the following
factors:
Risk
Inappropriate risk-taking is avoided and good alignment with shareholders is achieved through a number of mechanisms including significant
bonus deferral into shares and funds, a three-year performance period for the Long-Term Incentive Plan (the LTIP) with a subsequent two-year
post-vesting holding period and shareholding requirements, including for two years after cessation of employment. Before any decisions
about incentive outcomes are made, the Audit and Risk Committee reports to the Committee on any specific matters indicating excessive
risk-taking or lack of regard for controls and procedures. Malus and clawback provisions apply to the incentives inarange of specified
circumstances, as set out in the table on page 129.
Predictability
The charts on page 130 illustrate the potential remuneration outcomes under a range of scenarios (including in the event of a 50% increase
inthe share price). Each year a detailed review is undertaken in order to set stretching annual and three-year performance targets in the bonus
and LTIP respectively.
Proportionality
The link between strategic priorities and incentive metrics is set out in detail in the chart on page 105. The Committee considers wider
employee remuneration, holistic business performance and shareholder experience in determining the appropriate level of executive director
remuneration.
Alignment to culture
The key principles that underpin our approach to remuneration (and which apply at all levels of the organisation) are:
• remuneration is structured to support corporate strategy and sound risk management;
• employees’ interests are aligned with shareholders and the bonus pool is drawn from profit;
• incentives are designed to encourage behaviour focused on longer-term strategic and sustainable performance; and
• our total remuneration is competitive in the talent markets from which we hire.
Simplicity
Incentive schemes are straightforward in their structure and operation with explicit links between strategic priorities, key performance
indicators and incentive metrics.
Clarity
The Remuneration Policy is clearly laid out in tabular form in the DRR (summary on page 107 and full policy on pages 127 to 129). Details
ofthe operation of the Remuneration Policy have been explained to the wider workforce, as set out in the Chair’s statement.
6. Directors’ Remuneration Policy
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Executive directors’ Remuneration Policy – Table R22
Function Operation Opportunity Performance metrics
Base salary
Based on experience and
individual contribution to
leadership and Company
strategy.
Salaries are reviewed annually taking
into account market ranges for
executives of comparable status,
responsibility and skill in companies
ofsimilar size and complexity to Man
Group with consideration also given
tosector relevance.
The maximum salary for an
executive director is $1.1million for
the duration of this Remuneration
Policy. In reviewing salaries the
Remuneration Committee takes
into account individual and
Company performance, salary
increases below Board level, time
since the last increase, market
practice and total compensation
opportunity.
None.
Pension
To provide an opportunity
for executives to build up
income on retirement.
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 Group.
The maximum employer
contribution for executive directors
is aligned with the maximum
available under the wider employee
policy, currently 14% of pensionable
base salary. To qualify for the
maximum employer contribution
level, directors must meet certain
service criteria in line with the policy
for all employees.
None.
Benefits
To provide non-cash
benefits which are
competitive in the market in
which the executive is
employed.
Benefits include family private medical
insurance, life assurance, permanent
health insurance and gym membership
subsidy.
Flexible benefits can be purchased
frombase salary.
Other ad hoc benefits such as
relocation can be offered, depending
on personal circumstances.
The Company provides Directors’ and
Officers’ liability insurance and may
provide indemnities to the fullest extent
permitted by relevant legislation.
It is not anticipated that the total
benefits for any executive director
will normally exceed 10% of salary.
None.
Sharesave
To encourage UK-based
employees to own Man
Group shares.
The Man Group Sharesave Scheme
isan all-employee plan. The executive
directors who participate in the
Sharesave Scheme are granted options
over Man Group 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.
Savings capped at HM Revenue &
Customs limits.
None.
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Function Operation Opportunity Performance metrics
Annual bonus
To incentivise and reward
strong performance
against annual financial
and non-financial targets.
Deferral of a significant
proportion of the bonus
into shares is designed to
align executives’ interests
with those of shareholders
over the long term.
Performance measures and stretching
targets 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,
taking into account the overall
performance context and experience
ofshareholders.
45% of any bonus is delivered upfront
incash and 55% is delivered in shares
(orfund awards where the executive
director has met the minimum
shareholding requirement) deferred for
up to three years, released on the first,
second and third anniversary of grant in
three equal tranches. Retention period
may apply where required by
regulations.
The Committee may award dividend
equivalents on deferred shares in
respect of dividends declared during
the deferral period at the same time
asthe delivery of vested shares.
Malus and clawback provisions apply in
certain specified circumstances, further
details of which are provided below.
The maximum award is 300%
ofsalary.
Threshold performance is 25%
andtarget performance is 50%
ofthe maximum.
The bonus is based on the
Remuneration Committee’s
assessment of executive directors’
performance over a financial year
against objectives, which are based at
least 70% on financial measures which
may include, but are not limited to,
measures of assets under
management, revenue, profit and cash,
15% based on ESG objectives and up
to 15% based on individual contribution
and medium-term strategic goals.
Details of the measures and weightings
applicable for the year ending 31
December 2022 are on page 122.
Details of the targets will be disclosed
retrospectively in next year’s annual
report on remuneration, when they are
no longer deemed commercially
sensitive by the Board.
The Committee retains the discretion
toadjust the bonus if it considers that
the formulaic outcome does not reflect
underlying business performance.
The Committee also retains discretion
to make changes to the award if
required by regulations.
Long-Term Incentive
Plan
To engage and motivate
executive directors to
deliver on KPIs which
support implementation of
the Company’s strategy in
order to deliver superior
long-term returns to
shareholders.
An annual award of Man Group plc
shares, subject to performance
conditions over a period of at least
three years. An additional holding
period of at least two years will apply
following vesting.
Notional dividends accrue on
performance share awards to the
extent that the performance conditions
are met, delivered as shares or cash
atthe discretion of the Remuneration
Committee at the same time as the
delivery of vested shares.
Malus and clawback provisions apply in
certain specified circumstances, further
details of which are provided below.
The maximum annual grant is
300% of salary.
Threshold performance results in
0% vesting, target performance
results in 50% vesting, rising to
100% vesting for maximum
performance.
The vesting of awards is linked to a
range of measures which may include,
but is not limited to:
– a measure of investment
performance;
– a profitability measure;
– a growth measure (e.g. management
fee EPS and/or increase in net flows);
– a relative performance measure
(e.g.TSR); and
– an ESG-related measure.
Weightings may vary year-on-year with
no individual metric accounting for
more than 50% of the overall outcome.
Details of the measures for the awards
to be made in March 2022 are set out
on page122.
The Committee has discretion to
amendthe performance conditions,
inexceptional circumstances, if it
considers it appropriate to do so,
e.g.inthe event of accounting changes,
M&A activities and disposals. Any such
amendments would be fully explained
and disclosed in the next year’s annual
report on remuneration. The Committee
retains discretion to adjust the extent to
which an award shall vest if appropriate
to reflect the broader financial
performance of Man Group. The
Committee also retains discretion to
make changes to the award if required
by regulations.
Directors’ Remuneration report
6. Directors’ Remuneration Policy continued
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Function Operation Opportunity Performance metrics
Shareholding
requirements
In order to align the interests of
executive directors and shareholders,
Man Group requires its executive
directors to maintain a percentage
ofsalary in Man Group shares.
The Chief Executive Officer is
required to maintain a shareholding
of 300% of base salary. Other
executive directors are required
tomaintain a shareholding of
200%of base salary.
Executive directors are required to build
up this shareholding progressively.
Incumbents will build up to the
prescribed shareholdings with vested
shares where not already at or above
this level. The full requirement, or the
actual holding on departure if lower,
must be retained for two years after
departure from Man Group.
Malus and clawback The Committee may apply malus and/
or clawback to variable pay in certain
specified circumstances including:
(i)where the director fails to meet the
required standards of fitness and
propriety, (ii) fraud or misconduct,
(iii)material misstatement of financial
results affecting the assessment of a
performance condition, or (iv) where
there has been an error or inaccuracy
relating to the determination of variable
pay.
In addition, it can apply malus if the
director participates in, or was
responsible or accountable for, (i) a
material error, (ii) a material downturn
infinancial performance, (iii) a material
failure of risk management, (iv) censure
by any regulatory authority or, (v) a
significant detrimental impact on the
Company’s reputation.
Malus applies until the end of the
vesting period with clawback applying
until the end of any applicable retention
period.
The Committee retains discretion
tomake changes to the malus and
clawback provisions if required by
regulations.
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 (2018), the Listing Rules, the Financial Conduct Authority Remuneration Codes and to leading investor representative body guidelines.
Any commitments made prior to, but due to be fulfilled after, the approval and implementation of the revised Remuneration Policy approved by shareholders (including under any previously approved
policy) will be honoured. In particular, awards which vest under the DEIP will be satisfied in accordance with the DEIP rules. 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 (see details in the paragraph ‘Approach to
recruitment remuneration’).
Where employees hold units in funds managed by Man Group, the fund may rebate fees to the employee.
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6.2 Illustrative pay for performance scenarios
The chart below provides an illustration of some of the potential reward opportunities for executive directors in respect of the operation
oftheDirectors’ Remuneration Policy in 2022 showing the potential split between the different elements of remuneration under different
performance scenarios: ‘minimum’, ‘mid-point’, ‘maximum’ and ‘maximum with 50% share price appreciation’.
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 target payout of 50% of the maximum annual bonus and 50% vesting
for the LTIP.
• The ‘maximum’ scenario reflects fixed remuneration as above, plus full payout of both the annual bonus and LTIP.
• The ‘minimum’, ‘mid-point’ and ‘maximum’ illustrations are based on initial award value and do not, therefore, reflect potential share price
appreciation or any dividend equivalent received over the vesting/deferral periods.
• The ‘maximum with 50% share price appreciation’ shows the impact of a 50% increase in the value of the LTIP share award from grant;
itdoes not reflect any potential dividends received over the vesting period.
• Annual bonus includes both the cash bonus and the amount of the bonus deferred.
Maximum with 50%
share price appreciation
Maximum
Mid-point
Minimum $1,262
$9,512
$7,862
$4,562
13%
16%
28%
100%
42%
36% 36%
35%
42%
17%35%
Maximum with 50%
share price appreciation
Maximum
Mid-point
Minimum $717
$5,405
$4,467
$2,592
13%
16%
28%
100%
42%
36%
42%
36%
35% 17%35%
CEO ($000s)
CFO ($000s)
Salary, benefits and pension
Annual bonus
LTIP
LTIP – illustrative share price growth (assuming 50%)
Benefits are based on actual paid in 2021; for Antoine Forterre his 2021 benefits have been annualised.
6.3 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. Targets will be set by reference to internal budgets and strategic
plans, industry backdrop and external expectations to ensure they represent appropriately stretching levels of performance.
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6.4 Differences between executive directors’ and employees’ remuneration
Executive Committee members participate in an annual bonus scheme with significant levels of deferral, to align their remuneration with the
long-term interests of share and fund holders. However, in line with market practice in alternative investment funds, their incentive payouts
areuncapped.
Employee remuneration includes base salary, pension (capped at 14% of salary) and benefits (which include private health, subsidised gym
membership, the opportunity to participate in charitable activities during working hours and a range of flexible benefits which can be
purchased from salary), 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 incentivise appropriate asset raising and retention, whilst aligning interests on costs.
6.5 Approach to recruitment remuneration
External appointment
Approach to recruitment remuneration – Table R23
Component Approach Maximum grant value
Base salary 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.
$1.1 million
Pension Pension contributions or an equivalent cash supplement will be set in line with existing policy,
including any service criteria, in line with other employees.
14% of salary
1
Benefits Benefits may include (but are not limited to) private medical insurance, life assurance,
permanent health insurance, Group income protection and any necessary relocation
expenses.
n/a
Sharesave New appointees will be eligible to participate in any all-employee share schemes the Company
offers.
n/a
Annual 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
Long-Term Incentive
Plan
New appointees may be granted awards under the Long-Term Incentive Plan, on the same
terms as other executive directors, as described in the policy table, including in respect of the
first part-year of service.
300% of salary
1 The directors’ maximum pension contribution is aligned to the maximum available to all employees, currently 14% of salary.
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 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 will only
be contemplated in exceptional circumstances, will be reviewed and approved by the full Board and described fully in the subsequent year’s
DRR.
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.
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6.6 Service contracts and exit payment policy
Service contracts – Table R24
Element Condition
Contract dates Luke Ellis: 1 September 2016
Antoine Forterre: 1 October 2021
Current appointment No fixed term
Notice period
(by either Company
ordirector)
Luke Ellis: 12 months
Antoine Forterre: 6 months
The Company’s policy is that notice periods will not exceed 12 months
Provisions for contract
termination
Under all contracts the Company can opt to terminate immediately by making a payment in lieu of the notice period or
part of it. Luke Ellis’ contract requires payment of base salary only in lieu. Antoine Forterre’s contract requires payment
ofbase salary plus a cash sum in lieu of pension contributions and other insured benefits.
Payments in lieu are to be made in monthly instalments unless the Company and the executive director agree otherwise.
Unless the Company decides otherwise, the executive directors have a duty to mitigate their losses arising from
termination of their employment in which case any replacement earnings earned in what would otherwise have been
thenotice period would reduce the obligation on the Company to make payments in lieu.
Annual bonus The service contracts do not oblige the Company to pay any bonus to executive directors and bonuses are awarded
atthe Remuneration Committee’s discretion. Payment of any bonus is conditional upon the executive director being
inemployment and not under notice at the payment date, except in certain ‘good leaver’ circumstances.
Where the director is deemed to be a ‘good leaver’, deferred bonus awards are retained by participants and release
would follow the normal vesting schedule (except in the case of death where the Remuneration Committee may allow
early vesting). The treatment will be decided by the Committee taking into account the circumstances of the departure
including the performance of the executive director. Good leaver reasons include death, retirement on terms agreed with
the Company, ill-health, injury or disability and sale of the company or business in which the individual was employed.
The Remuneration Committee may also decide, in its discretion, to grant good leaver status in other exceptional
circumstances.
Long-Term Incentive
Plan
The treatment of long-term awards is governed by the relevant Plan rules, as approved by shareholders. Where an
individual’s employment terminates, the LTIP rules provide for unvested long-term incentive awards to lapse except
assetout below:
– Under the LTIP rules, where an individual is deemed to be a ‘good leaver’, unvested long-term incentive awards will
vestat the normal vesting date subject to performance against applicable performance conditions and, unless the
Committee determines otherwise, pro-rating for time. Any Committee determination will take into account a number
ofconsiderations, in particular performance and other circumstances relating to their termination of employment.
– Good leaver reasons include death, retirement, ill-health, injury or disability, redundancy, sale of the company or
business in which the individual was employed and cessation of employment on terms agreed with the Company. The
Remuneration Committee may also decide, in its discretion, to grant good leaver status in other circumstances and will
take into account the reason for leaving and the executive director’s performance up to the date employment ceases.
Where the post-departure shareholding requirements have not been met at the date of departure, after exit post-vesting
holding periods will continue to apply.
The treatment in relation to DEIP awards is as set out in the policy approved in 2015. Good leaver reasons in the DEIP
are: death, retirement, ill health, injury or disability, redundancy, their office or employment being with either a company
which ceases to be a Group Member or relating to a business or part of a business which is transferred to a person who
is not aGroup Member, cessation with the agreement of their employer provided that such participant has organised
and performed an orderly handover procedure to the satisfaction of the Committee, or for any other exceptional reason,
iftheCommittee so decides.
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. Both directors have also entered into a broader non-compete
covenant for an agreed period post termination.
Executive directors’ service contracts are available to view at the Company’s registered office.
6.7 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.
6. Directors’ Remuneration Policy continued
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6.8 Non-executive directors’ Remuneration Policy
Non-executive directors have formal letters of appointment. The Chair has a contract with the Company which provides that his appointment
is terminable on six months’ notice. The letters of appointment of the non-executive directors, except for Richard Berliand and Dev Sanyal,
contain a three-month notice period. The letters of appointment of Richard Berliand and Dev Sanyal do not contain any notice provisions or
provision for compensation in the event of early termination. It is intended that the letters of appointment of all future non-executive directors
will contain a three-month notice period. 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 72 to 73 of this 2021 Annual Report, and their current fee levels are provided in the DRR on page 122. Non-executive directors are
encouraged to build a shareholding in the Company.
Letters of appointment for the non-executive directors are available to view at the Company’s registered office.
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 R25
Function Operation Opportunity
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.
The Chair’s remuneration is recommended by the
Remuneration Committee and approved by the Board.
Neither the Chair nor the non-executive directors take
part in discussions or vote on their own remuneration.
Non-executive directors are reimbursed for expenses,
such as travel and subsistence costs, incurred in
connection with the carrying out of their duties. Any
taxcosts associated with these benefits are paid by
theCompany.
Fee levels will take account of any significant change
inthe scope of the role or time commitment required
and are set by reference to an appropriate comparator
group.
Non-executive directors receive a base fee for Board
service, including Nomination Committee
membership where appropriate. Additional fees are
payable for acting as Senior Independent Director,
asa member orChair of the Audit and Risk or
Remuneration Committees or for other
responsibilities, including those relating to employee
engagement. They do not participate in any share
option or share incentive plans.
6.9 Recruitment of non-executive directors
When recruiting a new non-executive director, the Board will utilise the policy as set out in table R25 above. 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,
asamember or Chair of a Board Committee or for other responsibilities, including those relating to employee engagement.
6.10 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. The Committee has shared with
allemployees a simple document explaining how the remuneration of the executive directors is determined and how that links to the way in
which employees are remunerated. A dedicated email address has been established to provide employees with a quick and easy way to raise
any questions with the Remuneration Committee. The Committee has not, however, formally consulted with employees during its review of
the Directors’ Remuneration Policy.
6.11 Consideration of shareholder views
The Remuneration Committee values engagement with shareholders and their representative bodies and consulted extensively before
proposing this policy, on which it will be seeking shareholder approval at the 2022 AGM. The detailed discussions we had with a number
ofshareholders on the introduction of the ESG metrics and objectives, in particular, were invaluable and have informed our final approach
tothis important change.
For and on behalf of the Board
Anne Wade
Chair of the Remuneration Committee
28 February 2022
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Directors’ report
The Directors present their report,
togetherwith the audited consolidated
financial statements, for the year ended
31 December 2021.
ManGroup plc is incorporated as a public limited company and is
registered in Jersey with the registered number 127570. TheCompany’s
registered office is 22 Grenville Street, St Helier, Jersey, JE4 8PX.
Although the Company is subject to Jersey law, the following report
also includes certain disclosures required for a UK incorporated
company under the UK Companies Act 2006 in the interests of
goodgovernance.
The Directors’ report comprises pages 134 to 135 and the other
sections and pages of the Annual Report and Accounts cross
referenced below which are incorporated by reference. The Corporate
Governance statement comprises pages 68 to 136. In line with
common practice, certain disclosures normally included in the
Directors’ report have instead been integrated into the Strategic
Report(pages 1 to 67) and Governance report (pages 68 to 136):
Disclosure Location Page(s)
Business relationships, stakeholders
and their effect on decisions
Strategic report
Governance report
10-11
78-85
Directors’ responsibility statement
including disclosure of information
tothe auditor
Directors’
responsibility
statement
136
Employment policies including
disability and equal opportunities
andemployee involvement
Strategic report and
Governance report
38-43
63-67
81
Financial risk management Notes 11 and 16 155, 160
Financial instruments Note 15 159
Future developments in the business Strategic report 12-19
Greenhouse gas emissions, energy
consumption and energy efficiency
Strategic report 46-53
Internal control and risk management Strategic report
Audit and Risk
Committee report
30-37
90-96
Research and development activities Strategic report 14-19
Subsidiary undertakings listing Note 34 180-181
Going concern disclosure Note 2 150
Directors
Details of the directors, with their biographies, can befound on pages
72 to 73. The following director changes occurred during 2021:
Mark Jones Stepped down from the Board on 1 October 2021
Antoine Forterre Appointed to the Board on 1 October 2021
Dev Sanyal and Zoe Cruz who have served as non-executive directors
of the Company since 2013 and 2018 respectively, will be retiring from
the Board at the conclusion of the AGM on 6 May 2022. Jackie Hunt
was appointed to the Board on 28 February 2022.
Details of the directors’ interests in the Company’s shares are given
onpage 118.
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 a special resolution
oftheshareholders.
Appointment, retirement and replacement of directors
The appointment, retirement and replacement of directors are
governed by the Articles, the 2018 UK Corporate Governance Code
and the Companies (Jersey) Law 1991. 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/her 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 third-party indemnity provisions for the
benefit of Man Group plc and its subsidiary directors, and these remain
in force at the date of this report. New indemnities are granted by the
relevant company to new directors on their appointment and cover,
tothe extent permitted by law, any third-party liabilities which they may
incur as a result of their service on a Board within the Group. The
Company arranges directors’ and officers’ liability insurance to cover
certain liabilities and defence costs which an indemnity does not meet.
The Company arranges separate pension trustee liability insurance
tocover certain liabilities and defence costs of the pension trustees.
Neither the indemnity nor the insurance policies provide any protection
inthe event of a director or trustee being found to have acted
fraudulently or dishonestly in respect of the Company or its subsidiaries.
Annual General Meeting (AGM)
Significant votes against at the 2021 AGM
In accordance with the UK Corporate Governance Code, the Board
notes that at the Company’s 2021 AGM, 74.65% of shareholders voted
for and 25.35% voted against Resolution 20 which related to the
disapplication of pre-emption rights in connection with the issue of
shares for the purpose of an acquisition or specified capital investment.
The resolution was in line with the Investment Association’s Share
Management Guidelines and the Pre-Emption Group’s Statement of
Principles. However, as a special resolution requiring a 75% majority,
Resolution 20 did not receive sufficient support to be passed.
Although the Company sought, and received approval of, the same
authority in previous years, we understand from discussions with some
of the shareholders that did not support this resolution that they may
prefer to have the opportunity to vote on specific proposals for a
transaction requiring this level of pre-emptive issue. We have continued
our dialogue with these shareholders and will take their views into
account when considering our future plans.
2022 AGM
The 2022 AGM of ManGroup plc will be held at Riverbank House,
2SwanLane, London EC4R 3AD on Friday 6 May 2022 at 10am.
Shares
Share capital
The issued share capital as at 25 February 2022 consisted of
1,473,107,813 ordinary shares of 3 3/7 US cents per share. Details
ofmovements in issued share capital, together with the rights and
obligations attaching to the Company’s shares, are set out in Note 27
to the financial statements.
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Man Group plc | Annual Report 2021
Authority to purchase own shares
At the 2021 AGM, the Company was authorised by its shareholders
topurchase up to a maximum of 145,399,026 of its ordinary shares.
Details of shares purchased under this authority by the Company
during the year are detailed in Note 27 to the financial statements.
Substantial interests
As at 31 December 2021, 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 Guidance and
Transparency Rules. Percentages are shown as notified, calculated
with reference to the Company’s latest total voting rights
announcement prior to the date of the movement triggering
thenotification.
It should be noted that these holdings are likely to have changed since
the Company was notified. However, notification of any change is not
required until the next notifiable threshold is crossed.
Shareholder
Number of
shares notified to
the Company
Percentage of
issued share
capital
Date of
notification
Silchester International
Investors LLP
131,297,253 8.52% 29 May
2019
Tameside MBC re Greater
Manchester Pension Fund
69,772,603 4.93% 21 October
2021
BlackRock, Inc. 67,208,295 Below 5% 22 March
2021
No changes to the above were disclosed to the Company in
accordance with DTR 5 during the period 1 January to 25 February
2022 inclusive, being the latest practicable date prior to the publication
ofthis report.
Dividend information
The directors recommend a final dividend of 8.4 cents per share
inrespect of the year ended 31 December 2021. Payment of this
dividend is subject to approval at the Company’s 2022 AGM.
Furtherdetails on the proposed dividend payment, together with
theCompany’s dividend policy and dividend payment methods, can
be found in the Shareholder Information section on pages 188 to 189.
Details of dividends waived by ManGroup plc’s Employee Trust can
befound in Note 25 to the financial statements.
Restriction on voting rights
Employee Trust and share awards
Man Group operates share incentive arrangements for qualifying staff.
Where vesting conditions are met, awards granted under these
arrangements are settled in Company shares. In order to hedge the
Company’s exposure to such grants, the Company has established
the Employee Trust, which assumes the obligation to deliver shares
(and satisfy other fund-based forms of remuneration) to employees.
Toenable the Employee Trust to meet these obligations, Man Group
provides funds by contributions or loans. Although the Employee Trust
has independent trustees and its assets are held separately from those
of Man Group, it is consolidated into the Group financial statements
given its nature as a structured entity, which takes on the obligation
todeliver deferred compensation awards to employees. The shares
itholds are treated for accounting purposes as though they were
treasury shares. These shares remain, however, in issue as trust assets
and, under the Employee Trust deed, the trustees have discretion
tovote, or abstain from voting, on resolutions put to shareholders.
Further details regarding deferred compensation arrangements can
befound in Notes 25 and 26 to the financial statements.
Treasury shares
Ordinary shares held by the Company in treasury do not carry voting
rights. If the treasury shares are subsequently sold or transferred for
the purposes of satisfying an employee share scheme as permitted
bythe Jersey (Companies) Law 1991, then the shares, at this point,
willagain carry their full voting rights. Further details on treasury shares
can be found in Note 27 to the financial statements.
Share transfer restrictions
• In accordance with the current Directors’ Remuneration Policy, the
CEO is required to hold shares in Man Group plc representing at
least 300% of salary and other executive directors are required to
hold shares in Man Group plc representing at least 200% of salary.
Directors are required to retain their shareholdings in full for two
years after departure from Man Group plc; this will be at the lower
ofeither their required or actual shareholding on leaving. Further
information can be found in the Directors’ Remuneration report.
• Jonathan Sorrell (former President ofManGroup) stepped down as
an executive director on 11 September 2019 and left the business
on 31 December 2019. In accordance with the Directors’
Remuneration Policy in operation at the time, he was required to
hold shares in ManGroup plc representing at least 200% of salary
while employed by the firm and retain ashareholding for two years
following departure, with 100% of the requirement retained for the
first year and at least 50% for a further year. Asa result, he was
required to retain shares in ManGroup plc until 31 December 2021.
• 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 Companies (Uncertificated Securities) (Jersey) Order 1999
and where the number of joint holders exceeds four.
Change of control
The Company is not party to any significant agreements that take
effect, alter or terminate upon a change of control following a takeover
bid except for the Company’s $500 million revolving credit facility
originally dated 9 December 2019 and amended and restated on
3 December 2021 which could, under specific circumstances,
become repayable following a relevant change of control. The
Company’s employee share and fund product incentive schemes
contain provisions whereby, upon a change of control of the Company,
outstanding options and awards will vest and become exercisable,
subject to any pro-rating that may be applicable. If a change of control
of the Company relates to an internal reorganisation, the Board may
determine, with the consent of the new controlling company, that in the
case of share awards the outstanding options and awards will not vest
and will be automatically surrendered in consideration for the grant
ofnew equivalent awards or options in the new controlling company
and that fund product awards will not vest but will continue to subsist.
Independent auditor
The Company’s auditor, Deloitte, has indicated its willingness to
continue in office and a resolution to reappoint Deloitte as auditor
ofthe Company will be proposed at the 2022 AGM.
Political donations
The Company’s policy is not to make any donations or contributions
topolitical parties or organisations and no such payments were made
during the year.
For and on behalf of the Board
Elizabeth Woods
Company Secretary
28 February 2022
136
Governance
Man Group plc | Annual Report 2021
Directors’ responsibility statement
The directors are responsible for preparing
the Annual Report and the financial
statements in accordance with applicable
law and regulations.
The Companies (Jersey) Law 1991 requires the directors to prepare
financial statements for each financial year. Under that law the directors
have elected to prepare the financial statements in accordance with
applicable law and International Financial Reporting Standards (IFRSs)
as adopted by the United Kingdom. The financial statements are
required by law to give a true and fair view of the state of affairs of
theCompany and of the profit or loss of the Company for that period.
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 Company’s ability to continue as
agoing concern.
The directors are responsible for keeping proper accounting records
that disclose with reasonable accuracy at any time the financial
position of the Company and enable them to ensure that the financial
statements comply with the Companies (Jersey) Law 1991. They are
also responsible for safeguarding the assets of the Company 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 Jersey, Channel Islands governing the
preparation and dissemination of financial statements may differ
fromlegislation in other jurisdictions.
Each of the directors as at 31 December 2021, whose names and
functions are on pages 72 to 73, 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 Group’s auditor
is aware of that information.
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Financial statements contents
Audited information Note
Independent auditor’s report 138
Group income statement 146
Group statement of comprehensive income 146
Group balance sheet 147
Group cash flow statement 148
Group statement of changes in equity 149
Notes to the Group financial statements 150
Basis of preparation 1 150
Going concern 2 150
Judgemental areas and accounting estimates 3 151
Revenue 4 151
Distribution costs 5 151
Asset servicing costs 6 151
Compensation costs 7 152
Other costs 8 153
Finance expense and finance income 9 153
Tax expense 10 154
Cash and liquidity 11 155
Fee and other receivables 12 156
Trade and other payables 13 156
Investments in fund products
and other investments 14 157
Fair value of financial assets and liabilities 15 159
Market risks and derivatives 16 160
Leasehold improvements and equipment 17 161
Leases 18 161
Goodwill and acquired intangibles 19 164
Other intangibles 20 167
Deferred tax 21 167
Provisions 22 169
Investment in associate 23 169
Pension 24 170
Employee Trust 25 174
Share-based payment schemes 26 174
Share capital, Treasury share reserve
and earnings per share (EPS) 27 176
Dividends 28 177
Segmental analysis 29 177
Geographical disclosure 30 177
Related party transactions 31 178
Other matters 32 178
Structured entities 33 179
Group investments 34 180
Unaudited information
Five-year record 182
Alternative performance measures 183
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Financial statements
Man Group plc | Annual Report 2021
Report on the audit of the financial statements
1. Opinion
In our opinion, the financial statements of Man Group plc (the ’parent
company’) and its subsidiaries (the ’group’):
• give a true and fair view of the state of the group’s affairs as at
31 December 2021 and of the group’s profit for the year then
ended;
• have been properly prepared in accordance with United Kingdom
adopted international accounting standards; and
• have been properly prepared in accordance with Companies
(Jersey) Law, 1991.
We have audited the financial statements which comprise:
• the group income statement;
• the group statement of comprehensive income;
• the group balance sheet;
• the group statement of changes in equity;
• the group cash flow statement; and
• the related notes 1 to 34.
The financial reporting framework that has been applied in their
preparation is applicable law and United Kingdom adopted
international accounting standards.
2. Basis for opinion
We conducted our audit in accordance with International Standards
on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities
under those standards are further described in the auditor’s
responsibilities for the audit of the financial statements section
ofourreport.
We are independent of the group in accordance with the ethical
requirements that are relevant to our audit of the financial statements
in the UK, including the Financial Reporting Council’s (the ’FRC’s’)
Ethical Standard as applied to listed public interest entities, and we
have fulfilled our other ethical responsibilities in accordance with
these requirements. We confirm that the non-audit services
prohibited by the FRC’s Ethical Standard were not provided
tothegroup.
We believe that the audit evidence we have obtained is sufficient
andappropriate to provide a basis for our opinion.
Independent auditor’s report to the members of Man Group plc
3. Summary of our audit approach
Key audit matter The key audit matter that we identified in the
current year was the accuracy of
performance fees.
Within this report, key audit matters are
identified as follows:
Newly identified
Increased level of risk
Similar level of risk
Decreased level of risk
Materiality The materiality that we used for the group
financial statements was $18.30m (2020:
$15.24m) which was determined on the basis
of 2% of management and other fees, which
is consistent with the basis of determination
used in the prior year.
Scoping We performed full scope audits of 28 (2020:
29) subsidiaries and audits of specified
account balances within a further seven
(2020: eight) subsidiaries across nine (2020:
eight) geographic locations.
Together, this accounts for 99% (2020: 98%)
of the group’s revenue, 98% (2020: 98%) of
the group’s profit before tax and 98% (2020:
98%) of the group’s total assets.
Significant changes
in our approach
The valuation of investment property:
right-of-use lease asset was a key audit
matter in the prior period due to estimation
uncertainty in the central London property
market resulting from COVID-19. In the
current year, this has ceased to be a key
audit matter as the market has somewhat
stabilised reducing the level of estimation
uncertainty.
Valuation of GPM goodwill and intangible
assets ceased to be a key audit matter in the
current year due to the write off of GPM
goodwill in the prior year leaving only the
GPM intangible assets, which are not
material.
There were no other significant changes in
our approach apart from in relation to these
key audit matters.
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4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the group’s ability to
continue to adopt the going concern basis of accounting included:
• Considering the year end cash balance of £387m explained in note
11 and assessing how this is forecast to fluctuate over the coming
12 months in line with management’s forecasted performance.
This analysis includes assessing the amount of headroom in the
forecasts considering cash and regulatory liquidity requirements;
• Assessing the nature and terms of the financing facilities available
to the group;
• Testing of clerical accuracy and assessing the sophistication of the
model used to prepare the forecasts; and
• Assessing the reasonableness of the assumptions used in the
forecasts and assessing the historical accuracy of forecasts
prepared by management alongside the historical conversion of
accounting profits to cash in the business.
Based on the work we have performed, we have not identified any
material uncertainties relating to events or conditions that, individually
or collectively, may cast significant doubt on the group’s ability to
continue as a going concern for a period of at least twelve months
from when the financial statements are authorised for issue.
In relation to the reporting on how the group has applied the UK
Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the directors’ statement in the financial
statements about whether the directors considered it appropriate to
adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of
this report.
5. Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether to fraud or not) that
we identified. These matters include those which have the greatest
effect on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team.
The key audit matter below was addressed in the context of our audit
of the financial statements as a whole, and in forming our opinion
thereon. We do not provide a separate opinion on key audit matters.
Accuracy of performance fees
Key audit matter
description
At $567m (2020: $177m) performance fee revenue is a material revenue balance, and has increased
significantly on prior year.
The measurement of performance fee revenue requires the accurate implementation of methodologies as set
out in investment management agreements which are often bespoke for each client or fund.
Performance fees are manually calculated, are performed less frequently based on the crystallisation dates
specified in the agreements (generally once or twice during the year), and are more complicated than
management fee calculations, increasing the relative risk of misstatement.
The performance fee calculation requires the use of estimated valuations which can change after the period
end. There is a fraud risk associated with the accuracy of revenue due to this balance’s importance to
stakeholders and link to long term incentives. Given the complexity of the calculations and level of judgement
involved in determining if the revenue has crystallised, accuracy of performance fees is deemed to be a key
audit matter.
The accounting policy for performance fees is detailed in note 4.
How the scope of our
audit responded to the
key audit matter
Our procedures included:
Assessing related controls: We obtained an understanding of the relevant controls over performance fees,
and tested these controls over the accuracy of performance fees. We placed reliance on these controls as a
part of our audit approach. We also obtained an understanding of the relevant controls at service
organisations.
Tests of detail: We independently agreed a sample of calculation methodologies to investment management
agreements and source documentation, verified the calculation methodology and the accuracy of the inputs
used in the calculation (for example, fee rates, crystallisation dates, fund product profit and relevant
benchmarks), tested the arithmetic accuracy of the underlying calculation of the performance fees and
challenged any judgements when interpreting governing documents. For estimates subsequently finalised and
invoiced after the year end, we assessed the amounts invoiced against the accrued estimate at the year end in
mid-February.
Key observations Based on our work, performance fees are appropriately recorded.
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Financial statements
Man Group plc | Annual Report 2021
Independent auditor’s report to the members of Man Group plc continued
6. Our application of materiality
6.1 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.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements
Materiality $18.30m (2020: $15.24m)
Basis for determining
materiality
2% of management and other fees (2020: 2% of management and other fees)
Rationale for the
benchmark applied
We have determined management and other fees, excluding performance fees, to be an appropriate basis for
calculating materiality as it is statutory in nature, and reflects current year performance whilst being relatively
stable compared to other benchmarks. Excluding performance fees from our materiality calculation avoids
undue fluctuations in materiality that would result due to year-on-year variability in performance fees if total
revenues, or a profit measure, were used instead.
Group materiality $18.30m
Component materiality range $12.80m to $0.10m
Audit & Risk Committee reporting threshold $0.90m
Management and other fees Group materiality
Management and
other fees $914m
Materiality ($m)
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Man Group plc | Annual Report 2021
6.2 Performance materiality
We set performance materiality at a level lower than materiality to
reduce the probability that, in aggregate, uncorrected and
undetected misstatements exceed the materiality for the financial
statements as a whole. Group performance materiality was set at
70% of group materiality for the 2021 audit (2020: 70%).
When considering performance materiality we have considered our
past experience of the audit, and our accumulated understanding of
the entity and its environment. In particular, we took into account the
reliability of the entity’s internal controls over financial reporting and
that we were able to rely on controls for a number of business
processes. We also took into account the level of corrected and
uncorrected misstatements identified in prior periods, and allowed for
a degree of unpredictability of the full year result as at the time of
planning our audit.
6.3 Error reporting threshold
We agreed with the Audit and Risk Committee that we would report
to the Committee all audit differences in excess of $900k (2020:
$762k), 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.
7. An overview of the scope of our audit
7.1 Identification and scoping of components
The group operates across nine geographical locations with
operations in Europe, North America, Asia and Australia. In
determining the scope of work to be performed on specific
components of the group, we considered each entity with reference
to both quantitative and qualitative factors. Our quantitative
assessment was primarily based on each entity’s profit before tax
and revenue, though we also considered the overall coverage
obtained. For qualitative factors, our assessment included current-
year events and any significant risks or management interest,
including management’s strategy for the group.
Based on that assessment, which is broadly consistent with the prior
year, we focused our group audit scope primarily on the audit work
at eight geographical locations. This included the full audit of 28
(2020: 29) subsidiaries across the UK, the US, Switzerland, Jersey,
Japan, Ireland, Australia, the Cayman Islands and Channel Islands.
Afurther 7 (2020: 8) subsidiaries across the US, Hong Kong and
Jersey 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. All other subsidiaries were subject to analytical
review procedures.
These nine (2020: eight) geographical locations represent the
principal business units and account for 98% (2020: 98%) of the
group’s total assets, 99% (2020: 98%) of the group’s revenue and
98% (2020: 98%) of the group’s profit before tax on an absolute
basis. 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 35 (2020: 37) subsidiaries was
executed at levels of materiality applicable to each individual entity
which were lower than group materiality and ranged from $0.10m to
$12.80m (2020: $0.10m to $9.16m).
In the past, the group audit team has implemented a programme of
planned visits so that the Senior Statutory Auditor or a senior
member of the group audit team visited each of the locations where
the group audit scope is focused on a rotational basis. During the
current year and prior year, no visits were made to individual
locations. This was replaced with video conference calls that
including screen sharing to allow for similar interactions and
assurance. Regular communications were maintained with all
geographical locations. Books and records for subsidiaries located
within Ireland, the Cayman Islands, Australia and the Channel Islands
are maintained within the UK and are audited by the group audit
team.
7.2 Our consideration of the control environment
Where relevant, we followed a combined approach of performing
substantive and controls testing. We took a controls reliance
approach over management and performance fees and the related
balance sheet receivables and accruals in all areas of the business
except GPM. We also tested relevant controls over distribution costs,
fixed compensation, asset servicing and investment in fund product
plans. Where we placed reliance on service organisations reports
specifically at administrators and transfer agents, we have obtained
an understanding of the controls provided within the service
organisation reports and tested any complementary controls
performed by the group.
We have performed general IT controls testing over the group’s
financial reporting processes and the key IT systems for
management fees, performance fees, distribution costs and
compensation. In addition, we performed tests over manual relevant
controls which complement these where needed.
7.3 Our consideration of climate-related risks
In planning our audit, we considered the potential financial impacts
on the group and its financial statements of climate change and the
transition to a low carbon economy. We considered management’s
own assessment of the related risks and opportunities as described
on page 30, together with our cumulative knowledge and experience
of the group and the environment in which it operates. We assessed
management’s disclosures about critical judgements and key
sources of estimation uncertainty, including the potential impact of
climate change on those judgements and estimates, in note 3 to the
financial statements. We assessed management’s going concern
and viability disclosures, and identified no significant impact of
climate change on those disclosures given the timeframes of those
assessments. We have considered whether information included in
the climate-related disclosures in the annual report is consistent with
our understanding of the business and the financial statements.
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Man Group plc | Annual Report 2021
Independent auditor’s report to the members of Man Group plc continued
Full audit scope 96%
Specified audit procedures 3%
Review at group level 1%
Revenue
Full audit scope 95%
Specified audit procedures 3%
Review at group level 2%
Profit before tax
Full audit scope 92%
Specified audit procedures 6%
Review at group level 2%
Total assets
7.4 Working with other auditors
All work was performed by the group audit team with the exception
of specified audit procedures being performed by the US and Swiss
teams largely over local payroll and cash balances. Components
were supervised by the group audit team. Regular calls were held
with components during the audit to discuss progress and provide
updates relevant to the group audit.
8. Other information
The other information comprises the information included in the
annual report, other than the financial statements and our auditor’s
report thereon. The directors are responsible for the other information
contained within the annual report.
Our opinion on the financial statements does not cover the other
information and we do not express any form of assurance conclusion
thereon.
Our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the course of
the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise
to a material misstatement in the financial statements themselves. If,
based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
9. Responsibilities of directors
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,
and for such internal controls as the directors determine is necessary
to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the group’s ability to continue as a going concern,
disclosing as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either
intend to liquidate the group or to cease operations, or have no
realistic alternative but to do so.
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10. Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in
accordance with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
A further description of our responsibilities for the audit of
thefinancial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor’s report.
11. Extent to which the audit was considered capable
of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with
laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in
respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud is
detailed below.
11.1 Identifying and assessing potential risks related to
irregularities
In identifying and assessing risks of material misstatement in respect
of irregularities, including fraud and non-compliance with laws and
regulations, we considered the following:
• the nature of the industry and sector, control environment and
business performance including the design of the group’s
remuneration policies, key drivers for executive directors’
remuneration, bonus levels and performance targets;
• results of our enquiries of management, internal audit and the
Audit and Risk Committee about their own identification and
assessment of the risks of irregularities;
• any matters we identified having obtained and reviewed the
group’s documentation of their policies and procedures relating to:
– identifying, evaluating and complying with laws and regulations
and whether they were aware of any instances of non-
compliance;
– detecting and responding to the risks of fraud and whether
they have knowledge of any actual, suspected or alleged
fraud;
– the internal controls established to mitigate risks of fraud or
non-compliance with laws and regulations;
• the matters discussed among the audit engagement team
including component audit teams and relevant internal specialists,
including tax, pensions, IT and industry specialists regarding how
and where fraud might occur in the financial statements and any
potential indicators of fraud.
As a result of these procedures, we considered the opportunities and
incentives that may exist within the organisation for fraud and
identified the greatest potential for fraud in the accuracy of
performance fees. In common with all audits under ISAs (UK), we are
also required to perform specific procedures to respond to the risk of
management override.
We also obtained an understanding of the legal and regulatory
framework that the group operates in, focusing on provisions of
those laws and regulations that had a direct effect on the
determination of material amounts and disclosures in the financial
statements. The key laws and regulations we considered in this
context included Companies (Jersey) Law 1991, Listing Rules and
the Disclosure Guidance and Transparency rules, pensions legislation
and tax legislation.
In addition, we considered provisions of other laws and regulations
that do not have a direct effect on the financial statements but
compliance with which may be fundamental to the group’s ability to
operate or to avoid a material penalty. These included the group’s
solvency requirements and matters regulated by the Financial
Conduct Authority (the group’s lead regulator).
144
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Man Group plc | Annual Report 2021
Independent auditor’s report to the members of Man Group plc continued
11.2 Audit response to risks identified
As a result of performing the above, we identified accuracy of
performance fees as a key audit matter related to the potential risk of
fraud. The key audit matters section of our report explains the matter
in more detail and also describes the specific procedures we
performed in response to this key audit matter. In addition to the
above, our procedures to respond to risks identified included the
following:
• reviewing the financial statement disclosures and testing to
supporting documentation to assess compliance with provisions
of relevant laws and regulations described as having a direct effect
on the financial statements;
• enquiring of management, the Audit and Risk Committee and
in-house and external legal counsel concerning actual and
potential litigation and claims;
• performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud;
• reading minutes of meetings of the Audit and Risk Committee,
reviewing internal audit reports and reviewing correspondence
with HMRC, FCA and other regulators globally; and
• in addressing the risk of fraud through management override of
controls, testing the appropriateness of journal entries and other
adjustments; assessing whether the judgements made in making
accounting estimates are indicative of a potential bias; and
evaluating the business rationale of any significant transactions
that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and
potential fraud risks to all engagement team members including
internal specialists and significant component audit teams, and
remained alert to any indications of fraud or non-compliance with
laws and regulations throughout the audit.
Report on other legal and regulatory requirements
12. Opinion on other matter prescribed by our
engagement letter
In our opinion, the part of the directors’ remuneration report to be
audited has been properly prepared in accordance with the basis
described on page 125.
13. Corporate Governance Statement
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements and our knowledge obtained during the audit:
• the directors’ statement with regards to the appropriateness of
adopting the going concern basis of accounting and any material
uncertainties identified set out on page 150;
• the directors’ explanation as to its assessment of the group’s
prospects, the period this assessment covers and why the period
is appropriate set out on page 31;
• the directors’ statement on fair, balanced and understandable set
out on page 136;
• the board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out on page
33;
• the section of the annual report that describes the review of
effectiveness of risk management and internal control systems set
out on pages 32 and 33; and
• the section describing the work of the Audit and Risk Committee
set out on pages 90 to 96.
14. Matters on which we are required to report by
exception
14.1 Adequacy of explanations received and accounting
records
Under the Companies (Jersey) Law 1991 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
• proper accounting records have not been kept by the parent
company or proper returns adequate for our audit have not been
received from branches not visited by us; or
• the financial statements are not in agreement with the accounting
records and returns.
We have nothing to report in respect of these matters.
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15. Other matters
15.1 Auditor tenure
Following the recommendation of the Audit and Risk Committee, we
were appointed by the shareholders at the Annual General Meeting
on 9 May 2014 to audit the financial statements for the year ending
31 December 2014 and subsequent financial periods. The period of
total uninterrupted engagement including previous renewals and
reappointments of the firm is 8 years, covering the years ending
31 December 2014 to 31 December 2021.
15.2 Consistency of the audit report with the additional report
to the Audit and Risk Committee
Our audit opinion is consistent with the additional report to the Audit
and Risk Committee we are required to provide in accordance with
ISAs (UK).
16. Use of our report
This report is made solely to the company’s members, as a body, in
accordance with Article 113A of the Companies (Jersey) Law, 1991.
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 those matters we have expressly agreed to
report to them on in our engagement letter 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.
As required by the Financial Conduct Authority (FCA) Disclosure
Guidance and Transparency Rule (DTR) 4.1.14R, these financial
statements form part of the European Single Electronic Format
(ESEF) prepared Annual Financial Report filed on the National
Storage Mechanism of the UK FCA in accordance with the ESEF
Regulatory Technical Standard (‘ESEF RTS’). This auditor’s report
provides no assurance over whether the annual financial report has
been prepared using the single electronic format specified in the
ESEF RTS. We have been engaged to provide assurance on whether
the annual financial report has been prepared using the single
electronic format specified in the ESEF RTS and will report separately
to the members on this.
Bevan Whitehead (FCA)
For and on behalf of Deloitte LLP
Recognised Auditor
London
28 February 2022
Financial statements
Man Group plc | Annual Report 2021
146
Group income statement
For the year to 31 December
Note
2021
$m
2020
$m
Management and other fees 4 914 762
Performance fees 4 567 177
Revenue
1,481 939
Income or gains on investments and other financial instruments 14 42 40
Third-party share of gains relating to interests in consolidated funds 14
(3) (17)
Sub-lease rental and lease surrender income 18
6 25
Distribution costs 5
(40) (34)
Net revenue
1,486 953
A
sset servicing costs 6 (58) (55)
Compensation costs 7
(596) (451)
Other costs 8
(165) (150)
Finance income 9
1 2
Finance expense 9
(14) (16)
Revaluation of contingent consideration 15
2 22
Impairment of right-of-use lease assets – investment property 18
(3) (25)
A
mortisation of acquired intangible assets 19 (61) (63)
Impairment of GPM goodwill 19
– (55)
Recycling of FX revaluation to the Group income statement on liquidation of subsidiaries
16 – 17
Share of post-tax loss of associate 23
(2) –
Statutory profit before tax
590 179
Tax expense 10 (103) (41)
Statutory profit attributable to owners of the Company
487 138
Statutory earnings per share 27
Basic
34.7¢ 9.5¢
Diluted
33.8¢ 9.3¢
Group statement of comprehensive income
For the year to 31 December
Note
2021
$m
2020
$m
Statutory profit attributable to owners of the Company 487 138
Other comprehensive income/(expense):
Remeasurements of post-employment benefit obligations 24
22 (15)
Current tax credited on pension plans
4 4
Deferred tax debited on pension plans
(7) –
Items that will not be reclassified to profit or loss
19 (11)
Cash flow hedges: 16
Valuation gains taken to equity
9 6
Realised gains transferred to Group income statement
(8) (3)
Deferred tax credited on cash flow hedge movements
– 1
Net investment hedge 16
3 (4)
Recycling of FX revaluation to the Group income statement on liquidation of subsidiaries 16
– (17)
Foreign currency translation
(6) 10
Items that may be reclassified to profit or loss
(2) (7)
Other comprehensive income/(expense) (net of tax) 17 (18)
Total comprehensive income attributable to owners of the Company 504 120
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147
Group balance sheet
At 31 December
Note
2021
$m
2020
$m
A
ssets
Cash and cash equivalents 11 387 351
Fee and other receivables 12
485 386
Investments in fund products and other investments 14
974 787
Leasehold improvements and equipment 17
43 30
Leasehold property – right-of-use lease assets
18 61 74
Investment property – right-of-use lease assets
18 77 78
Goodwill and acquired intangibles 19
678 742
Other intangibles 20
45 39
Deferred tax assets 21
128 119
Investment in associate 23
18 –
Pension asset 24
27 2
Total assets
2,923 2,608
Liabilities
Trade and other payables 13
702 574
Provisions 22
14 9
Current tax liabilities 10
15 12
Third-party interest in consolidated funds 14
254 219
Lease liability 18
250 272
Deferred tax liabilities 21
37 25
Total liabilities
1,272 1,111
Net assets 1,651 1,497
Equity
Capital and reserves attributable to owners of the Company
1,651 1,497
The financial statements were approved by the Board of Directors on 28 February 2022 and signed on its behalf by:
Luke Ellis Antoine Forterre
Chief Executive Officer Chief Financial Officer
Financial statements
Man Group plc | Annual Report 2021
148
Group cash flow statement
For the year to 31 December
Note
2021
$m
2020
$m
Cash flows from operating activities
Statutory profit 487 138
A
djustments for:
Share-based payment charge 7
39 20
Fund product-based payment charge 7
54 54
Net finance expense 9
13 14
Tax expense 10
103 41
Revaluation of contingent consideration 15
(2) (22)
Depreciation of leasehold improvements and equipment 17
13 12
Depreciation of right-of-use lease assets 18
17 22
Impairment of right-of-use lease assets – investment property
18 3 25
Amortisation of acquired intangible assets 19
61 63
Impairment of GPM goodwill 19
– 55
Amortisation of other intangibles 20
16 14
Share of loss from associate 23
2 –
Recycling of FX revaluation to the Group income statement on liquidation of subsidiaries 16
– (17)
Foreign exchange movements
9 (16)
Realised gains on cash flow hedges
(8) (3)
Funding of defined benefit pension plan 24
(3) –
Other non-cash movements
(7) (8)
797 392
Changes in working capital
1
:
(Increase)/decrease in fee and other receivables (102) 50
(Increase)/decrease in other financial assets
2
(163) 31
Increase/(decrease) in trade and other payables
49 (30)
Cash generated from operations
581 443
Interest paid 9 (2) (2)
Unwind of lease liability discount 18
(12) (12)
Tax paid
(83) (37)
Cash flows from operating activities
484 392
Cash flows from investing activities
Interest received 9
1 2
Purchase of leasehold improvements and equipment: leasehold property 17
(26) (12)
Purchase of leasehold improvements and equipment: right-of-use lease asset – investment property 18
(5) –
Purchase of other intangible assets
(18) (18)
Payment of acquisition-related contingent consideration 15
– (2)
Purchase of interest in associate 23
(19) –
Cash flows used in investing activities
(67) (30)
Cash flows from financing activities
Repayments of principal lease liability 18
(21) (22)
Purchase of own shares by the Employee Trust and Partnerships
(18) (21)
Proceeds from sale of Treasury shares in respect of Sharesave
2 –
Share repurchase programmes (including costs) 27
(180) (107)
Dividends paid to Company shareholders 28
(160) (147)
Cash flows used in financing activities
(377) (297)
Net increase in cash and cash equivalents 40 65
Cash and cash equivalents at the beginning of the year
351 281
Effect of foreign exchange movements
(4) 5
Cash and cash equivalents at year end
3
11 387 351
Notes:
1 Changes in working capital differ from the movements in these balance sheet items due to non-cash movements which either relate to the gross-up of the third-party share of consolidated fund
entities (Note 14.2) or are adjusted elsewhere in the Group cash flow statement, such as movements relating to the fund product-based payment charge (within operating activities) and the share
repurchase liability (within financing activities).
2 Includes $2 million (2020: $1 million) of restricted net cash inflows relating to consolidated fund entities (Note 14.2).
3 Includes $64 million (2020: $62 million) of restricted cash relating to consolidated fund entities (Note 14.2).
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149
Group statement of changes in equity
At 31 December
2021
$m
2020
$m
Share capital and capital reserves (1,633) (1,635)
Revaluation reserves and retained earnings 3,284 3,132
Capital and reserves attributable to owners of the Company
1,651 1,497
Share capital and capital reserves
$m
Share
capital
Share
premium
account
Capital
redemption
reserve
Merger
reserve
Reorganisation
reserve
Total
A
t 1 January 2020 53 – – – (1,688) (1,635)
A
t 31 December 2020 53 – – – (1,688) (1,635)
A
t 1 January 2021 53 – – – (1,688) (1,635)
Transfer from Treasury shares: Partnership Plans
and Sharesave
– 2 – – – 2
Cancellation of Treasury shares (2) – 2 – – –
A
t 31 December 2021 51 2 2 – (1,688) (1,633)
Revaluation reserves and retained earnings
$m
Profit
and loss
account
Own shares
held by
Employee Trust
Treasury
shares
Cumulative
translation
adjustment
Cash flow
hedge
reserve
Total
A
t 1 January 2020 3,322 (66) (52) 55 – 3,259
Statutory profit 138 – – – – 138
Other comprehensive income/(expense) (11) – – (11) 4 (18)
Total comprehensive income attributable to owners of
the Company 127 – – (11) 4 120
Share-based payment charge 20 – – – – 20
Purchase of own shares by the Employee Trust – (21) – – – (21)
Disposal of own shares by the Employee Trust (26) 27 – – – 1
Share repurchases (100) – – – – (100)
Transfer to Treasury shares 107 – (107) – – –
Transfer from Treasury shares (11) – 11 – – –
Dividends paid (147) – – – – (147)
A
t 31 December 2020 3,292 (60) (148) 44 4 3,132
A
t 1 January 2021 3,292 (60) (148) 44 4 3,132
Statutory profit 487 – – – – 487
Other comprehensive income/(expense) 19 – – (3) 1 17
Total comprehensive income attributable to owners of
the Company 506 – – (3) 1 504
Share-based payment charge 39 – – – – 39
Current tax credited on share-based payments 1 – – – – 1
Deferred tax credited on share-based payments 10 – – – – 10
Purchase of own shares by the Employee Trust – (18) – – – (18)
Disposal of own shares by the Employee Trust (17) 17 – – – –
Share repurchases (225) – – – – (225)
Transfer to Treasury shares 180 – (180) – – –
Transfer from Treasury shares (6) – 5 – – (1)
Disposal of Treasury shares for Sharesave – – 2 – – 2
Cancellation of Treasury shares (143) – 143 – – –
Dividends paid (160) – – – – (160)
A
t 31 December 2021 3,477 (61) (178) 41 5 3,284
The proposed 2021 final dividend would reduce shareholders’ equity by $115 million (2020: $81 million) subsequent to the balance sheet date
(Note 28). Further details of Man Group’s share capital and reserves are included in Note 27.
Financial statements
Man Group plc | Annual Report 2021
150
Notes to the Group financial statements
1. Basis of preparation
Accounting
The audited consolidated financial information has been prepared in accordance with International Financial Reporting Standards (IFRSs) and
interpretations (IFRICs) as adopted by the United Kingdom. The consolidated financial statements are prepared on a going concern basis using the
historical cost convention, except for certain financial instruments that are measured at fair value. Our significant accounting policies, which have
been consistently applied in the current and prior years, are included in the relevant notes, except for those below which relate to the consolidated
financial statements as a whole.
Man Group plc (the Company) has taken advantage of the exemption provided in Article 105 (11) of the Companies (Jersey) Law 1991 and therefore
does not present its individual financial statements and related notes.
Consolidation
The consolidated group is the Company and its subsidiaries (together Man Group). The consolidated financial statements are presented in United
States dollars (USD), the Company’s functional currency, as the majority of our revenues, assets, liabilities and financing are denominated in USD.
For consolidated entities with a USD functional currency, monetary assets and liabilities denominated in foreign currencies are translated at each
balance sheet date rate. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing
at the date when the fair value was determined. Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.
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.
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.
The consolidated financial information contained within these financial statements incorporates our results, cash flows and financial position for
the year to 31 December 2021 and includes our share of the results of any associates and joint ventures using the equity method of accounting.
Subsidiaries are entities we control (including certain structured entities, as defined by IFRS 12 ‘Disclosure of Interests in Other Entities’) and are
consolidated from the date on which control is transferred to us until the date that control ceases. Control exists when we have 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
and balances between our entities are eliminated on consolidation. Although the Employee Trust has independent trustees and its assets are held
separately, it is consolidated into the Group financial statements given its nature as a structured entity which has the obligation to deliver deferred
compensation awards to our employees (Note 25).
Business combinations are accounted for using the acquisition method from the date on which we effectively obtain control of the acquiree. 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
Man 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, and costs relating to acquisitions are recognised in the Group income statement as incurred. Any contingent consideration
is recognised at fair value at the acquisition date, with any subsequent changes to the fair value recognised in the Group income statement.
Impact of new accounting standards
A number of new or amendments to existing accounting standards and interpretations have been issued by the International Accoun
ting Standards
Board (IASB).
The following accounting standards relevant to our operations were effective for the first time in the year to 31 December 2021. Their adoption has
not had a significant impact on these financial statements:
• Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16).
The following standards are relevant to our operations and have been issued by the IASB but are not yet mandatory and have not been early adopted:
• Amendments to IAS 1 ‘Presentation of Financial Statements’: classification of liabilities as current or non-current;
• Amendments to IAS 1 and IFRS Practice Statement 2: disclosure of accounting policies;
• Amendments to IAS 8 ‘Accounting Policies, Changes in Accounting Estimates and Errors’: definition of accounting estimates;
• Amendments to IAS 12 ‘Income Taxes’: deferred tax related to assets and liabilities arising from a single transaction;
• Amendments to IAS 16 ‘Property, Plant and Equipment’: property, plant and equipment – proceeds before intended use; and
• Annual Improvements to IFRS Standards 2018-2021 Cycle: amendments to IFRS 1 ‘First-time Adoption of International Financial Reporting
Standards’, IFRS 9 ‘Financial Instruments’, IFRS 16 ‘Leases’ and IAS 41 ‘Agriculture’.
No other standards or interpretations issued and not yet effective are expected to have an impact on the Group financial statements.
2. Going concern
Despite the ongoing volatility seen across financial markets as a result of the COVID-19 pandemic, including inflationary pressures and monetary and
fiscal policies, we have continued to operate substantially as normal. Management fee profitability has continued to grow and performance fee earnings
for the year are strong. Although COVID-19 has not had a significant or ongoing adverse impact on us to date, its impact on our operating
arrangements, including access to capital and liquidity, is subject to ongoing review by the directors and senior management. This includes assessment
of our medium-term financial plan and capital and liquidity plan, which are built by aggregating expected business performance, including rigorous
downside scenario testing. We continue to have a strong cash (Note 11) and capital position, and our business typically has good conversion of profits
into cash flows, which helps protect the business in stressed scenarios. Further discussion in relation to COVID-19 is included in the Chief Executive
Officer’s review and the Risk management and People and culture sections of the Strategic report on pages 16, 31 and 38 respectively.
The directors consider that we are well placed to manage business and financial risks in the current economic environment and have concluded that
there is a reasonable expectation that we have adequate resources to continue in operational existence for the foreseeable future. Accordingly, the
Group financial statements have been prepared on a going concern basis.
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151
3. Judgemental areas and accounting estimates
The preparation of financial statements in conformity with IFRS requires the use of accounting estimates and assumptions. We continually
evaluate our estimates and judgements based on historical experience and expectations of future events that are considered reasonable in
the circumstances. These judgements and estimates are an area of focus for the Board and, in particular, the Audit and Risk Committee.
Critical judgements
Man Group acts as the investment manager/adviser to fund entities. The most significant area of judgement is whether we control certain of those
fund entities to which we are exposed via either direct investment holdings, total return swaps, or sale and repurchase arrangements. We assess
such relationships on an ongoing basis to determine whether we control each fund entity and therefore consolidate them into our results (Note 14).
Critical accounting estimates
The directors have considered the estimates and assumptions used in the preparation of the Group financial statements, which include estimates
and assumptions used in the assessment for impairment of goodwill, right-of-use lease assets, pension and deferred tax assets, and in the valuation
of certain tax liabilities and provisions. The directors have also considered the possible impact of climate change on such estimates and
assumptions, as detailed in the TCFD sub-section of the Our policies and practices section and the Responsible business section of the Strategic
report. Other than the valuation of the net pension asset (Note 24), the directors have concluded there are no key assumptions concerning the future
or other key sources of estimation uncertainty at the reporting date that may have a significant risk of causing a material adjustment to the carrying
amounts of our assets and liabilities within the next financial year.
4. Revenue
Accounting policy
Fee income is our primary source of revenue, which is derived from the investment management agreements that we have in place with the fund
entities or the accounts that we manage.
Management and other fees (net of rebates), which include all non-performance related fees, are recognised in the period in which contractual
investment management services are provided and do not include any other performance obligations. Fees are generally based on an agreed
percentage of NAV or AUM and are typically charged in arrears and receivable within one month.
Performance fees (net of rebates) relate to the performance of the funds or managed accounts managed during the year and are recognised
when the performance obligation has been met, whereby the fee has crystallised and can be reliably estimated. This is generally at the end of
the performance period or upon early redemption by an investor. Until the performance period ends, market movements could significantly
move the NAV of the fund products. For alternative strategies, we will typically only earn performance fees on any positive investment returns in
excess of the high-water mark, meaning we will not be able to earn performance fees with respect to positive investment performance in any
year following negative performance until that loss is recouped, at which point an investor’s investment surpasses the high-water mark. For
long-only strategies, performance fees are earned only when performance is in excess of a predetermined strategy benchmark (positive alpha).
Once crystallised, performance fees typically cannot be clawed back. There are no other performance obligations or services provided which
suggest these have been earned either before or after the crystallisation date.
Rebates, which relate to repayments of management and performance fees charged, typically to institutional investors, are recognised in the
period in which the associated fees for services are provided. Rebates are presented net within management and other fees and performance
fees in the Group income statement.
Management and other fees for the period increased to $914 million from $762 million in 2020, driven by strong performance and positive net
AUM flows.
Performance fee revenue was $567 million compared to $177 million in 2020, driven by strong performance in the year across a range of strategies.
5. Distribution costs
Accounting policy
Distribution costs, which are paid to external intermediaries for marketing and investor servicing, largely in relation to retail investors, are variable
with AUM and the associated management fee revenue. Distribution costs are expensed over the period in which the service is provided.
6. Asset servicing costs
Accounting policy
Asset servicing includes custodial, valuation, fund accounting, registrar, research and administration functions performed by third parties under
contract to Man Group, on behalf of the funds or managed accounts, as well as market data required to perform those services. Asset servicing
costs are recognised in the period in which the services are provided. The costs of these services vary based on transaction volumes, the
number of funds or managed accounts and their NAVs, and the mix of client strategies.
Financial statements
Man Group plc | Annual Report 2021
152
Notes to the Group financial statements continued
7. Compensation costs
Accounting policy
Compensation is our largest cost and an important component of our ability to retain and attract talent. In the short term, the variable
component of compensation adjusts with revenues and profitability.
Salaries, variable cash compensation and social security costs are charged to the Group income statement in the period in which the service is
provided, and include partner drawings.
Compensation can be deferred by way of both equity-settled share-based payment schemes as well as fund product-based compensation
arrangements. Details of share-based deferred compensation are set out in Note 26. Where deferred compensation is invested in fund products
managed by us, the fair value of the employee services received in exchange for the fund investments is recognised as a straight-line expense
of the mark to market value of the awards over the relevant grant to vest period, with a corresponding liability. We generally elect to separately
purchase the equivalent fund investments at grant date to offset any associated change in the deferred compensation due (Note 14), and at
vesting the value of the fund investment is delivered to the employee (subject to the terms of the plan rules, which include malus provisions).
If an award is forfeited, the cumulative charge recognised in the Group income statement is reversed in full. Details of our hedge accounting
arrangements relating to deferred fund product awards are provided in Note 16.
Pension costs relate to our defined contribution and defined benefit plans (Note 24).
2021
$m
2020
$m
Salaries 169 163
V
ariable cash compensation 266 167
Deferred compensation: share-based payment charge (Note 26)
39 20
Deferred compensation: fund product-based payment charge
54 54
Social security costs
54 34
Pension costs (Note 24)
14 13
Total compensation costs
596 451
Made up of:
Fixed compensation: salaries and associated social security costs, and pension costs
208 194
Variable compensation: variable cash compensation, deferred compensation and associated social security costs
388 257
Total compensation costs have increased by 32% compared to 2020 due to the higher levels of management and performance fee revenues year
on year, which drove increased variable cash compensation.
The increase in salaries was driven by the less favourable sterling (GBP) to USD achieved exchange rates, which averaged 1.38 compared with
1.29 in 2020 and increased these by around $9 million.
The share-based payment charge increased by $19 million in the year, predominantly due to accelerated vesting charges for certain performance-
linked share awards.
The unamortised deferred compensation at year end is $52 million (2020: $66 million) and has a weighted average remaining vesting period of
1.4 years (2020: 1.8 years).
Average headcount
The table below provides average headcount by function, including directors, employees, partners and contractors.
2021 2020
Investment management 388 379
Sales and marketing
1
218 196
Technology and infrastructure
1,2
847 881
A
verage headcount 1,453 1,456
Headcount at 31 December 1,498 1,444
Notes:
1 Staff performing client service and portfolio analysis functions have been included within sales and marketing in the year ended 31 December 2021. Previously these staff were included within
technology and infrastructure headcount.
2 Includes all staff performing technology-based roles, including those supporting the investment management side of our business.
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8. Other costs
2021
$m
2020
$m
Technology and communications 22 25
A
udit, tax, legal and other professional fees 21 20
Occupancy
18 14
Staff benefits
14 14
Temporary staff, recruitment, consultancy and managed services
13 9
Insurance
7 5
Marketing and sponsorship
4 2
Travel and entertainment
2 2
Other cash costs, including irrecoverable VAT
18 11
Total other costs before depreciation and amortisation
119 102
Depreciation of leasehold improvements and equipment, and amortisation of other intangibles
29 26
Depreciation of right-of-use lease assets (Note 18) 17 22
Total other costs
165 150
Other costs, before depreciation and amortisation, increased by $17 million in 2021. Higher levels of hiring, partly due to growth in the business, saw
an increase in recruitment and temporary staff costs, and occupancy costs rose due to the additional costs incurred in relation to the vacant sub-let
space in our London office (see further details in Note 18.2). Costs were further impacted by the less favourable GBP to USD achieved exchange
rates (see Note 7), which increased 2021 other costs comparatively by around $5 million.
Auditor’s remuneration, including professional services, is disclosed in the Audit and Risk Committee report on page 95.
9. Finance expense and finance income
2021
$m
2020
$m
Finance expense:
Unwind of lease liability discount (Note 18) (12) (12)
Unwind of contingent consideration discount (non-core item per page 183)
– (2)
Other finance expense
(2) (2)
Total finance expense
(14) (16)
Finance income:
Interest on cash deposits 1 2
Total finance income
1 2
Net finance expense (13) (14)
Financial statements
Man Group plc | Annual Report 2021
154
Notes to the Group financial statements continued
10. Tax expense
Accounting policy
Current tax is based on our taxable profit for the year. Taxable profit differs from net profit as reported in the Group income statement because
it excludes items of income or expense that are taxable or deductible in other years, in addition to items that are never taxable or deductible.
Accounting for tax involves a level of estimation uncertainty given the application of tax law requires a degree of judgement, which tax authorities
may dispute. Tax liabilities are recognised based on the best estimates of probable outcomes, with regard to external advice where appropriate.
We are a global business and therefore operate across many different tax jurisdictions. Income and expenses are allocated to these different
jurisdictions based on transfer pricing methodologies set in accordance with the laws of the jurisdictions in which we operate and international
guidelines as laid out by the Organisation for Economic Co-operation and Development (OECD). The effective tax rate results from the
combination of taxes paid on earnings attributable to the tax jurisdictions in which they arise. Further details of our deferred tax expense, assets
and liabilities are included in Note 21.
2021
$m
2020
$m
Current tax
UK corporation tax on profits 86 39
Foreign tax
14 2
A
djustments to tax charge in respect of previous years (1) 1
Current tax expense
99 42
Deferred tax
Origination and reversal of temporary differences
5 (1)
A
djustments to tax charge in respect of previous years (1) –
Deferred tax expense (Note 21)
4 (1)
Total tax expense 103 41
What factors affect the tax expense for the year?
The majority of our profits in the period were earned in the UK, Switzerland and the US. Our tax expense is lower (2020: higher) than the amount that
would arise using the theoretical tax rate applicable to our profits as follows:
2021
$m
2020
$m
Profit before tax 590 179
Theoretical tax expense at UK rate: 19% (2020: 19%) 112 34
Effect of:
Overseas tax rates compared to UK 1 (1)
A
djustments to tax charge in respect of previous years (2) 1
(Recognition)/derecognition of US deferred tax assets (Note 21) (2) 8
Impact of change in UK tax rate (4) –
Other (2) (1)
Tax expense 103 41
Except for the above items, our current effective tax rate of 17% (2020: 23%) is broadly consistent with our earnings profile.
What factors affect our future tax charges?
The principal factors which may influence our future tax rate are changes in tax regulation in the territories in which we operate, the mix of income
and expenses earned and incurred by jurisdiction, and the consumption of available deferred tax assets.
The OECD has published a draft Inclusive Framework to support the introduction of global minimum tax rates. Governments are consulting on how
to implement the Framework with the expectation that legislation and regulations will take effect in 2023. Pending further guidance on the potential
outcomes of the consultation, it is not currently practicable to assess the impact of the Framework on our future tax charges.
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11. Cash and liquidity
Accounting policy
Cash and cash equivalents comprise cash and short-term investments in money market funds or bank deposits with an original maturity of three
months or less. Cash and cash equivalents are measured at amortised cost, which is approximately equal to fair value. 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 on-demand and short-term bank deposits and money market funds, and at times invested in short-term US Treasury bills (which
meet the definition of cash). Cash and cash equivalents include restricted balances held by consolidated fund entities to which we do not have
access and which are subject to legal or contractual restrictions as to their use.
2021
$m
2020
$m
Less than
1 year
Greater than
1 year
Total
Less than
1 year
Greater than
1 year
Total
Cash and cash equivalents 387 – 387 351 – 351
Cash held by consolidated fund entities (Note 14.2) (64) – (64) (62) – (62)
A
vailable cash and cash equivalents 323 – 323 289 – 289
Undrawn committed revolving credit facility – 500 500 – 500 500
Total liquidity
323 500 823 289 500 789
Liquidity risk management
Liquidity resources support ongoing operations and potential liquidity requirements under scenarios that assume stressed market and economic
conditions. Our funding requirements relating to the investment management process are discretionary. Our liquidity profile is monitored on a daily
basis and the stressed scenarios are updated regularly. The Board reviews our funding resources at each Board meeting and on an annual basis,
as part of the strategic planning process. Our available liquidity is considered sufficient to cover current requirements and potential requirements
under stressed scenarios.
Cash and cash equivalents
Available cash and cash equivalents of $323 million (2020: $289 million) at 31 December 2021 comprise cash at bank of $189 million (2020:
$161 million), short-term deposits of $24 million (2020: $128 million) and investments in money market funds of $110 million (2020: nil), and
include $29 million (2020: $32 million) of cash ring-fenced for regulated entities. At 31 December 2021, the $323 million available cash and cash
equivalents balance is held with 14 banks (2020: $289 million with 15 banks). The single largest counterparty bank exposure of $85 million is held
with an AA- rated bank (2020: $103 million with an A rated bank). At 31 December 2021, balances with counterparties in the AAA, AA and A ratings
bands aggregate to $51 million (2020: nil), $154 million (2020: $7 million) and $118 million (2020: $282 million) respectively.
Committed revolving credit facility
Our $500 million committed revolving credit facility (RCF), which incorporates an ESG target-linked interest rate component and does not include
financial covenants in order to maintain maximum flexibility, was undrawn at 31 December 2021 (2020: undrawn), having been drawn for a period
of a month in May 2021. The RCF was put in place in December 2019 as a five-year facility but has since been extended and, due to the exercise
of the final one-year extension option in 2021, is now scheduled to mature in December 2026.
Intra-day and overnight credit facilities
We guarantee the obligations under the $100 million intra-day (2020: $100 million) and $25 million overnight credit facilities (2020: $25 million)
used to settle the majority of our banking arrangements. At 31 December 2021, the exposures under both the intra-day and overnight facilities are
nil (2020: nil). The fair value of these commitments has been determined to be nil (2020: nil).
Financial statements
Man Group plc | Annual Report 2021
156
Notes to the Group financial statements continued
12. Fee and other receivables
Accounting policy
Fee and other receivables are initially recorded at fair value and subsequently measured at amortised cost using the effective interest rate
method, except for derivatives (measured at fair value through profit and loss) and prepayments. Fee receivables and accrued income relate to
management and performance fees and are received in cash following finalisation of the NAVs of the underlying funds or managed accounts.
The majority of fees are deducted from the NAVs of the respective funds by the independent administrators and therefore the credit risk of fee
receivables is minimal.
2021
$m
2020
$m
Fee receivables 18 16
A
ccrued income 355 238
Collateral posted with derivative counterparties
29 27
Receivables from Open Ended Investment Collective (OEIC) funds
1
25 33
Prepayments
16 15
Other fund receivables
11 17
Derivative financial instruments (Note 16)
5 4
Sub-lease rental income receivable
2 5
Receivables relating to consolidated fund entities (Note 14.2)
5 4
Other receivables
19 27
485 386
Note:
1 For the OEIC funds businesses we act 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. The unsettled fund payable is recorded in trade and other payables (Note 13).
The increase in accrued income in 2021 largely relates to the year-on-year increase in performance fee revenues which crystallised at 31 December,
with the associated balance at year end of $241 million compared to $141 million in 2020.
No balances are overdue and, under the expected credit loss model of IFRS 9 ‘Financial Instruments’, no impairment has been recognised at
31 December 2021 (2020: nil). Included in fee and other receivables at 31 December 2021 are balances of $3 million (2020: $4 million) which are
expected to be settled after more than 12 months.
13. Trade and other payables
Accounting policy
Trade and other payables are initially recorded at fair value, which is usually the invoiced amount, and subsequently measured at amortised cost
using the effective interest rate method, except for derivatives which are measured at fair value through profit and loss.
2021
$m
2020
$m
Trade payables 5 7
A
ccruals 453 326
Share repurchase liability
109 64
Payables under repo arrangements
64 56
Payables to OEIC funds
1
25 33
Derivative financial instruments (Note 16)
5 18
Tax and social security
5 13
Other fund payables
– 5
Contingent consideration
– 2
Payables relating to consolidated fund entities (Note 14.2)
19 27
Other payables
17 23
702 574
Note:
1 For the OEIC funds businesses we act 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. The unsettled fund receivable is recorded in fee and other receivables (Note 12).
The increase in accruals in 2021 is driven by the higher levels of performance fee revenues which crystallised at 31 December, which drove an
increase in associated variable compensation cost accruals at year end of $373 million compared to $253 million in 2020.
Payables under repo arrangements relate to obligations to repurchase seed investments as detailed in Note 14.1. The share repurchase liability
is the remaining liability relating to the first tranche of the share repurchase announced in December 2021 (2020: announced in September 2020),
as detailed in Note 27.
Included in trade and other payables at 31 December 2021 are balances of nil (2020: $3 million) which are expected to be settled after more than
12 months.
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14. Investments in fund products and other investments
Accounting policy
Investments in fund products are classified at fair value through profit or loss, with net gains due to movements in fair value recognised through
income or gains on investments and other financial instruments. The fair values of investments in fund products are typically 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. 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 Group, we have established oversight
procedures and due diligence processes to ensure that the NAVs reported by the external valuation service providers are reliable and
appropriate. Purchases and sales of investments are recognised on trade date.
Our holdings in collateralised loan obligation (CLO) risk retention assets are priced using a bottom-up valuation method. We use third-party
valuations to price the securities within the underlying portfolios and then apply these valuations in proportion to the percentage of the CLO
notes we hold. Holdings in subordinated tranches of CLOs are valued using an average of third-party valuations.
The fair value hierarchy of financial assets is disclosed in Note 15.
Seed investments portfolio
We use capital to invest in fund products as part of our ongoing business, to build product breadth and to trial investment research
developments before marketing the products broadly to investors. Seed capital is invested via direct holdings in fund products or sale and
repurchase (repo) arrangements, which allow us to finance seed investments without consuming high levels of cash. Alternatively, we may
obtain exposure to seed investments via total return swap (TRS) arrangements. Under a repo arrangement we are committed to repurchase
the underlying seed investments at maturity and pay an interest charge over the period, with the obligation to repurchase the assets on maturity
recorded as a liability within trade and other payables (Note 13). Under a TRS arrangement we are under no form of repayment obligation and
have no ownership interest (or voting rights) in the underlying investment. In exchange for the returns on the underlying seed investments,
we pay a floating rate of interest.
Consolidation
The control considerations under IFRS 10 ‘Consolidated Financial Statements’ apply to fund product investments, including those underlying
our repo and TRS instruments, and therefore we may similarly be required to consolidate them.
Having considered all significant aspects of our relationships with fund entities, although we manage the assets of certain fund entities, we only
obtain more than limited exposure to the variable returns of those fund entities, and thus the characteristics of control are only met, where we
either hold an investment in the fund entity or receive the returns on the fund entity via a TRS or repo arrangement. For most fund entities: the
existence of independent boards of directors; rights which allow for the removal of the investment manager/adviser; the influence of investors;
limited exposure to variable returns; and the arm’s length nature of our contracts with the fund entities, indicate that we do not control them,
and their associated assets, liabilities and results should not be consolidated into the Group financial statements.
Fund entities deemed to be controlled (Note 14.2) are consolidated on a line-by-line from the date control commences until it ceases. Where
we are not deemed to control the fund, the investment in the fund is classified within investments in fund products (Note 14.1).
Fund investments held for deferred compensation arrangements
Fund product investments related to deferred compensation arrangements are held to offset any change in deferred compensation over the
vesting period, and at vesting the value of the fund investment is delivered to the employee. Fund product investments are recorded at fair value.
Any gains or losses during the vesting period are recognised as income or gains on investments and other financial instruments in the Group
income statement, or alternatively these are accounted for as cash flow hedges as outlined in Note 16. These include balances held by the
Employee Trust (Note 25).
Financial assets at fair value through profit or loss
Note
2021
$m
2020
$m
Investments in fund products 14.1 422 332
Investments in consolidated funds: transferrable securities 14.2 549 452
Other investments
3 3
Investments in fund products and other investments
974 787
Less:
Fund investments held for deferred compensation arrangements (119) (119)
Investments in consolidated funds: exclude consolidation gross-up of net investment 14.2
(204) (180)
Other investments
(3) (3)
Seeding investments portfolio
648 485
Financial statements
Man Group plc | Annual Report 2021
158
Notes to the Group financial statements continued
14. Investments in fund products and other investments continued
14.1. Investments in fund products
At 31 December 2021, exposure to fund products via repo arrangements (included within investments in fund products above, with an offsetting
repayment obligation included within trade and other payables in Note 13) was $64 million (2020: $56 million), and additional exposure via TRS was
$108 million (2020: $50 million). The largest single investment in fund products at 31 December 2021 was $45 million (2020: $48 million). The exposure
to market risk on these investments is outlined in Note 16.
Income or gains on investments and other financial instruments comprises the following:
Note
2021
$m
2020
$m
Net gains on seeding investments portfolio 24 21
Consolidated fund entities: gross-up of net gains on investments (see core reclassification per page 186) 14.2 12 26
Unrealised foreign exchange gain/(loss) on lease liabilities, pension and associated deferred tax (non-core item
per page 183)
3 (6)
Net gains/(losses) on fund investments held for deferred compensation and other investments
3 (1)
Income or gains on investments and other financial instruments
42 40
14.2. Consolidation of investments in funds
In 2021, 26 (2020: 19) funds in which we have an investment meet the control criteria and have therefore been consolidated on a line-by-line basis.
The investments relating to consolidated funds are included within the Group balance sheet and income statement as follows:
2021
$m
2020
$m
Balance sheet
Cash and cash equivalents 64 62
Transferable securities
1
549 452
Fees and other receivables
5 4
Trade and other payables
(19) (27)
Net assets of consolidated fund entities
599 491
Third-party interest in consolidated funds (254) (219)
Net investment held by Man Group
345 272
Income statement
Net gains on investments
2
32 53
Management fee expenses
3
(3) (2)
Performance fee expenses
3
(2) (2)
Other costs
(4) (5)
Net gains of consolidated fund entities
23 44
Third-party share of gains relating to interests in consolidated funds (3) (17)
Gains attributable to net investment held by Man Group
20 27
Notes:
1 Included within investments in fund products and other investments.
2 Included within income or gains on investments and other financial instruments.
3 Relate to management and performance fees paid by the funds to Man Group during the year, which are eliminated within management and other fees and performance fees respectively in the
Group income statement.
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15. Fair value of financial assets and liabilities
Accounting policy
We disclose 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).
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 fair value of our financial assets and liabilities which are held at fair value through profit and loss can be analysed as follows:
2021
$m
2020
$m
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Financial assets held at fair value:
Investments in fund products and other
investments (Note 14)
3 243 179 425 3 170 162 335
Investments in consolidated funds (Note 14)
– 538 11 549 – 435 17 452
Derivative financial instruments (Note 12)
– 5 – 5 – 4 – 4
3 786 190 979 3 609 179 791
Financial liabilities held at fair value:
Derivative financial instruments (Note 13) – 5 – 5 – 18 – 18
Contingent consideration (Note 13)
– – – – – – 2 2
– 5 – 5 – 18 2 20
During the year, there were no significant changes in the business or economic circumstances that affected the fair value of our 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
primarily comprise holdings in unlisted, open-ended, active and liquid funds, which are priced using daily or weekly observable market information
derived from third-party sources, as described in Note 14. The material holdings within the Level 3 category relate to CLO risk retention assets and
subordinated tranches of CLOs which are priced in accordance with the methodologies set out in Note 14 and rely, in part, on unobservable input
valuations. The effect of using reasonably possible alternative input assumptions would not result in a significant change to the carrying value.
The movements in Level 3 financial assets and financial liabilities measured at fair value are as follows:
2021
$m
2020
$m
Assets Liabilities Assets Liabilities
Level 3 financial assets/(liabilities) held at fair value through profit or loss
A
t beginning of the year 179 (2) 204 (24)
Transfers into Level 3
9 – – –
Purchases
17 – – –
(Charge)/credit to Group income statement
(7) 2 10 20
Sales or settlements
(2) – (17) 2
Change in consolidated fund entities held
(6) – (18) –
A
t year end 190 – 179 (2)
The revaluation of contingent consideration in the Group income statement is an adjustment to the fair value of acquisition earn-out payments.
Financial statements
Man Group plc | Annual Report 2021
160
Notes to the Group financial statements continued
16. Market risks and derivatives
Accounting policy
Derivatives
We use derivative financial instruments in certain circumstances to manage market risk. These are measured at fair value through profit and loss
and included in derivative financial instruments within fee and other receivables (Note 12) and trade and other payables (Note 13), including any
unrealised gains and losses on these derivatives. These consist primarily of market risk hedges on some of our seeding positions (Note 14) and
foreign exchange contracts.
Hedge accounting
We have elected to apply cash flow hedge accounting to fund investments held for deferred fund product awards (Note 14) granted from
1 January 2020, whereby the offsetting gains or losses on these fund products are matched against the corresponding fund product-based
payment compensation charge in the Group income statement pro rata over the vesting period (Note 7). Unmatched gains or losses are
recognised through other comprehensive income and held within the cash flow hedge reserve in equity until they are recycled over the vesting
period into the Group income statement.
We apply net investment hedge accounting to hedge the net assets of material subsidiaries that have a functional currency other than USD,
whereby gains or losses on derivative financial instruments are recycled from the Group income statement through other comprehensive income
to the foreign currency translation reserve in equity to offset any currency translation of the net assets of these subsidiaries.
As in 2020, all derivatives are held with counterparties with ratings of A or higher and mature within one year.
How do we manage market risk arising from investments in funds?
Investments in fund products (Note 14) expose us to market risk and therefore this process is subject to limits consistent with the Board’s risk
appetite. In certain circumstances, we use derivative financial instruments, specifically equity or credit default swaps, to hedge the risk associated
with mark to market movements.
The market risk from seeding investments, including those financed via repo and TRS arrangements, 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 $42 million at 31 December 2021 (2020: $24 million).
During the year, there were $9 million net realised and unrealised losses arising from market risk hedges (2020: $10 million), and the notional value
of market risk derivative financial assets and liabilities held at 31 December 2021 is $148 million (2020: $33 million) and $112 million (2020:
$131 million) respectively.
For deferred fund product-based compensation, we generally hold an investment in the associated fund product to hedge the market movement
from grant to vest.
How do we manage foreign exchange rate risk?
We are subject to risk from changes in foreign exchange rates on monetary assets and liabilities. In certain circumstances, we use derivative financial
instruments, specifically forward foreign exchange contracts, to hedge our risk associated with foreign exchange movements.
During the year, there were $3 million of net realised and unrealised foreign exchange gains (2020: $6 million net realised and unrealised losses)
recognised in the Group income statement through income or gains on investments and other financial instruments, which include the netting effects
of hedging outlined below. This primarily comprises a $2 million unrealised gain (2020: $7 million unrealised loss) relating to the revaluation of our
$238 million (2020: $255 million) unhedged GBP lease liability (Note 18), in addition to those unrealised foreign exchange movements in the pension
and associated deferred tax (a non-core item on page 183).
During the year there were $13 million net realised and unrealised gains arising from foreign exchange hedges (2020: $23 million losses) and the
notional value of foreign exchange derivative financial assets and liabilities held at 31 December 2021 is $123 million (2020: $417 million) and
$364 million (2020: $400 million) respectively.
In addition, in 2020 we recognised a non-cash gain of $17 million in relation to the liquidation of non-USD functional currency subsidiaries, whereby
the related movements in the cumulative translation adjustment reserve within equity are recycled to the Group income statement upon disposal.
The table below reflects the currency profile of our significant foreign currency (non-USD) monetary assets and liabilities after the impact of hedging:
2021
$m
2020
$m
Sterling (208) (257)
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 $21 million (2020: $23 million), with a corresponding impact on equity. This exposure is based on our USD balances held by
non-USD functional currency entities and non-USD balances held by USD functional currency entities at 31 December.
How do we manage interest rate risk?
We are subject to risk from changes in interest rates on monetary assets and liabilities. In respect of our monetary assets and liabilities which
earn/incur interest indexed to floating rates, as at 31 December 2021 a 50 basis point increase/decrease in these rates, with all other variables held
constant, would have resulted in a $1 million increase/decrease (2020: $1 million) in net interest income.
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17. Leasehold improvements and equipment
Accounting policy
All leasehold improvements and equipment are recorded 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 (up to 24 years) and for equipment is between three and ten years. Leasehold improvements relating to right-of-use lease assets
classified as investment property are presented within Note 18.
2021
$m
2020
$m
Leasehold
improvements Equipment Total
Leasehold
improvements Equipment Total
Cost at beginning of the year 58 59 117 41 100 141
A
dditions 14 12 26 4 8 12
Disposals
– (7) (7) – (49) (49)
Transfer from investment property to leasehold improvements
– – – 16 – 16
Transfer from leasehold improvements to investment property
(2) – (2) (3) – (3)
Cost at year end
70 64 134 58 59 117
A
ccumulated depreciation and impairment at beginning
of the year
(44) (43) (87) (29) (83) (112)
Disposals
– 7 7 – 48 48
Transfer from investment property to leasehold improvements
– – – (14) – (14)
Transfer from leasehold improvements to investment property
2 – 2 3 – 3
Depreciation
(3) (10) (13) (4) (8) (12)
A
ccumulated depreciation and impairment at year end (45) (46) (91) (44) (43) (87)
Net book value at beginning of the year 14 16 30 12 17 29
Net book value at year end
25 18 43 14 16 30
18. Leases
18.1. Man Group as lessee
Accounting policy
Our lease arrangements relate to business premises property leases.
We assess whether a contract is or contains a lease at the inception of the contract. For arrangements where we are the lessee, a right-of-use
(ROU) lease asset and a related lease liability are recognised on the Group balance sheet at the date from which we have the right to use the
asset, usually the lease commencement date. For short-term leases (defined as leases with a term of one year or less) and leases of low-value
assets, we recognise the lease payments on a straight-line basis over the lease term within other costs in the Group income statement. The
lease term is determined as the non-cancellable period of a lease, together with periods covered by an option to extend the lease if we consider
that exercise of the extension option is reasonably certain. Lease extension options and break clauses inherent in our leases do not have a
significant impact on our ROU lease assets and lease liabilities.
ROU lease assets relating to the portion of our leased business premises which we then sub-let under operating leases are classified as
investment property, with other ROU lease assets classified as leasehold property. Transfers from investment property to leasehold property
occur when we commence development of a previously sub-let portion of our leased business premises with a view to occupying that space.
Similarly, transfers from leasehold property to investment property occur when we cease to occupy a portion of the leased business premises
with the intention of sub-letting that space.
All of our ROU lease assets, including those classified as investment property, are measured at cost less depreciation and impairment. Cost
includes the amount of the initial measurement of the associated lease liability, lease payments made at or before the lease commencement
date, lease incentives received, associated leasehold improvements classified as investment property and estimated costs to be incurred in
restoring the property to the condition required under the terms of the lease. Depreciation is calculated on a straight-line basis over the asset’s
estimated useful life which, for leasehold improvements classified as investment property, is the shorter of the lease term and the life of the
improvement (up to 24 years) and for all other assets is the lease term, and is included within other costs (Note 8). We assess ROU lease assets
for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable.
All lease liabilities are measured at the present value of lease payments that are due over the lease term, discounted using our incremental cost
of borrowing at the lease commencement or modification date (being the rate we would have to pay to finance a similar asset). The lease liability
is adjusted for lease payments and unwind of lease liability discount as well as the impact of any subsequent lease modifications. The unwind of
lease liability discount is included within finance expense (Note 9).
Cash payments in relation to leases, which reduce the lease liability recognised on the Group balance sheet, are presented as unwind of lease
liability discount (within operating activities) and repayments of principal lease liability (within financing activities) in the Group cash flow
statement. Payments in relation to short-term leases and leases of low-value assets are included within cash flows from operating activities.
Financial statements
Man Group plc | Annual Report 2021
162
Notes to the Group financial statements continued
18. Leases continued
18.1. Man Group as lessee
Right-of-use lease assets
2021
$m
2020
$m
Leasehold
property
Investment
property Total
Leasehold
property
Investment
property Total
Cost at beginning of the year 168 240 408 137 305 442
A
dditions 4 5 9 3 – 3
Disposals
(15) – (15) (2) – (2)
Transfer from leasehold property to investment property
(9) 9 – (12) 12 –
Transfer from investment property to leasehold property
– – – 64 (64) –
Transfer from investment property to leasehold improvements
(Note 17)
– – – – (16) (16)
Transfer from leasehold improvements to investment property
(Note 17)
– 2 2 – 3 3
Early exercise of break clause
1
– – – (22) – (22)
Remeasurement of lease liability
(2) – (2) – – –
Cost at year end
146 256 402 168 240 408
A
ccumulated depreciation and impairment at beginning of the year (94) (162) (256) (58) (164) (222)
Disposals
14 – 14 2 – 2
Transfer from leasehold property to investment property
4 (4) – 5 (5) –
Transfer from investment property to leasehold property
– – – (31) 31 –
Transfer from investment property to leasehold improvements
(Note 17)
– – – – 14 14
Transfer from leasehold improvements to investment property
(Note 17)
– (2) (2) – (3) (3)
Impairment
– (3) (3) – (25) (25)
Depreciation (Note 8)
(9) (8) (17) (12) (10) (22)
A
ccumulated depreciation and impairment at year end (85) (179) (264) (94) (162) (256)
Net book value at beginning of the year 74 78 152 79 141 220
Net book value at year end
61 77 138 74 78 152
Note:
1 Due to the lease surrender and exit of our principal sub-tenant from our main London leased premises in 2020, we exercised a break clause on our secondary London premises in order to bring
all our London staff together in one location from 2021. This lease modification had the impact of reducing the right-of-use lease asset in 2020 in line with the associated reduction in lease liability,
as included in the lease liability movements below.
Lease liability
The maturity of our contractual undiscounted cash flows for the lease liability is as follows:
2021
$m
2020
$m
Within one year 25 32
Between one and five years 103 105
Between five and ten years
138 122
Between ten and 15 years
105 111
A
fter 15 years 5 –
Undiscounted lease liability at year end
376 370
Discounted lease liability at year end 250 272
At 31 December 2021 $236 million (2020: $253 million) of our total discounted lease liability relates to our main premises in London (expiring in
2035) and is denominated in GBP. The revaluation of this GBP lease liability (which is unhedged as outlined in Note 16) into USD, the lessee’s
functional and Man Group’s presentation currency, may result in large unrealised gains or losses in the Group income statement and therefore these
non-cash movements have been classified as a non-core item (see page 183).
Movements in our lease liability are as follows:
2021
$m
2020
$m
A
t beginning of the year 272 307
A
dditions 4 2
Disposals
(1) –
Cash payments
(33) (34)
Unwind of lease liability discount (Note 9)
12 12
Early exercise of break clause
– (22)
Remeasurement
(2) –
Unrealised foreign exchange (gain)/loss
(2) 7
A
t year end 250 272
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163
18. Leases continued
18.2. Man Group as lessor (investment property)
Accounting policy
Man Group acts as lessor in respect of certain ROU lease assets which are in turn sub-let (investment property ROU lease assets), which are
classified as operating leases under IFRS 16 ‘Leases’. Sub-lease rental income is recognised on a straight-line basis over the lease term in the
Group income statement.
An impairment expense is recognised for the amount by which the related ROU lease asset’s carrying value exceeds its recoverable amount,
being its value in use. For the purposes of assessing impairment, investment property ROU lease assets are grouped at the lowest levels for
which there are separately identifiable cash flows, being the individual sub-lease contract level.
Sub-lease rental income for 2021 was $6 million (2020: $7 million). In June 2020 the principal sub-tenant of our main London office paid us cash of
$26 million in order to terminate their lease early, which was offset by an associated non-cash deferred rent write-off of $8 million and resulted in a
net accounting gain on lease surrender of $18 million. The surrender gain represented payment for sub-lease rental risk and other costs taken on as
a result of this agreement. The portion of this gain relating to future lost sub-lease rental income was deferred from 2020 to 2021 through non-core
items (see page 183).
Operating expenses of $6 million (2020: $3 million) arising from investment property that did not generate rental income during the period are
included within other costs (Note 8).
At 31 December 2021, the contractual undiscounted operating lease payments receivable from the sub-leases of our investment property ROU
lease assets are as follows:
2021
$m
2020
$m
Total Total
Within one year 6 7
Between one and two years 6 6
Between two and three years
6 6
Between three and four years
5 6
Between four and five years
– 5
23 30
Fair value of investment property and impairment
Investment property ROU lease assets with a carrying value of $77 million at 31 December 2021 (2020: $78 million) have a fair value of $94 million
(2020: $86 million), which is equivalent to their value in use. The increase in fair value is largely due to the vacancy-related costs incurred in 2021
no longer being included in the forecast period.
At 31 December 2020, we assessed our investment property ROU lease asset for impairment as a result of the sub-let vacancy created by the lease
surrender of our principal sub-tenant coinciding with the London commercial property market uncertainty due to COVID-19. The value in use
calculations used cash flow projections out to the end of the head lease, based on current sub-lease agreements and estimates for future rentals.
The assumptions applied in the value in use calculations were derived from past experience and assessment of current market inputs, with the
market property yield discount rate then applied to the modelled cash flows. The assessment resulted in an impairment of our investment property
ROU lease assets of $25 million at 31 December 2020.
Due to our exit from occupying the remaining portion of the space available for sub-lease during 2021, the associated ROU lease asset and
leasehold improvements were reclassified as investment property. This also resulted in the recognition of a further $3 million impairment of our ROU
lease asset during the year. There are no other indicators of impairment which would change our previous recoverability assessment.
Financial statements
Man Group plc | Annual Report 2021
164
Notes to the Group financial statements continued
19. Goodwill and acquired intangibles
Accounting policy
Goodwill
Goodwill represents the excess of consideration transferred over the fair value of 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, has an indefinite useful life, is not subject
to amortisation and is tested for impairment annually, or whenever events or circumstances indicate that the carrying amount may not be
recoverable. An impairment expense is recognised for the amount by which the asset’s carrying value exceeds its recoverable amount.
The recoverable amounts of our cash-generating units (CGUs) or groups of CGUs are assessed each year using a value in use calculation.
Goodwill does not generate cash flows independently of other groups of assets and thus is assigned to a CGU or group of CGUs for the
purposes of impairment testing. The groups of CGUs are based upon how management monitors the business and represent the lowest level to
which goodwill can be allocated on a reasonable basis. For impairment review purposes, from 31 December 2021 we have identified one group
of CGUs, comprising the aggregate of the AHL, GLG, Numeric and FRM CGUs. The combination of these CGUs for the purpose of goodwill
impairment testing reflects the completed integration of legacy acquisitions and the cohesion of our liquid investment offerings, which aligns with
how management now consider the value and goodwill in the business. Our private markets CGU (GPM) no longer has any goodwill allocated to
it as a result of the full impairment of this balance in 2020.
The value in use calculation at 31 December 2021 uses cash flow projections based on the Board-approved financial plan for the year to
31 December 2022 and a further two years of projections (2023 and 2024), 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.
The assumptions applied in the value in use calculation are derived from past experience and assessment of current market inputs. We have
applied a bifurcated discount rate to the modelled cash flows to reflect the different risk profile of management fee profits and performance fee
profits. The discount rates are based on our weighted average cost of capital using a risk-free interest rate, together with an equity market risk
premium and an appropriate market beta derived from consideration of our own beta, similar alternative asset managers, and the asset
management sector as a whole. The terminal value is calculated based on the projected closing AUM at 31 December 2024 and applying the
mid-point of a range of historical multiples to the forecast cash flows associated with management and performance fee profits.
The value in use calculation is presented on a post-tax basis, consistent with the prior year, given most comparable market data is available
on a post-tax basis. This is not significantly different to its pre-tax equivalent.
Acquired intangibles
Following initial recognition, acquired intangibles are held at cost less accumulated amortisation and impairment. Acquired intangibles comprise
investment management agreements and related client relationships (IMAs), distribution channels and brand names acquired in a business
combination, and are initially recognised at fair value based on the present value of the expected future cash flows and are amortised on a
straight-line basis over their expected useful lives, which are between three and 13 years (IMAs and brands), and eight and 12 years (distribution
channels). Acquired intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. Disposals of acquired intangibles are recognised in the year the related cash inflows cease.
2021
$m
2020
$m
Goodwill IMAs
Distribution
channels
Brand
names
Total Goodwill IMAs
Distribution
channels
Brand
names
Total
Cost at beginning of the year 2,429 857 58 41 3,385
2,422
857 58 41 3,378
Disposals – (19) (2) (1) (22) – – – – –
Currency translation
(4) – – – (4) 7 – – – 7
Cost at year end
2,425 838 56 40 3,359 2,429 857 58 41 3,385
A
ccumulated amortisation
and impairment at beginning
of the year
(1,837) (721) (47) (38) (2,643) (1,781) (664) (43) (36) (2,524)
A
mortisation – (56) (4) (1) (61) – (57) (4) (2) (63)
Impairment
– – – – – (55) – – – (55)
Disposals
– 19 2 1 22 – – – – –
Currency translation
1 – – – 1 (1) – – – (1)
A
ccumulated amortisation and
impairment at year end
(1,836) (758) (49) (38) (2,681) (1,837) (721) (47) (38) (2,643)
Net book value at beginning
of the year
592 136 11 3 742 641 193 15 5 854
Net book value at year end 589 80 7 2 678 592 136 11 3 742
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Man Group plc | Annual Report 2021
165
19. Goodwill and acquired intangibles continued
Goodwill impairment: what assumptions have we used?
The recoverable amount of each CGU or group of CGUs (the value in use) to which goodwill has been allocated has been assessed at each year
end. The key assumptions applied to the value in use calculations are provided below.
There were no indicators of impairment of our liquid manager CGUs at 31 December 2021. The combination of these CGUs from 31 December
2021 for the purpose of impairment testing, as outlined on page 164, does not impact the level of impairment recognised in the year.
Key assumptions at 31 December 2021: Liquid managers
Compound average annualised growth in AUM (over three years) 6%
Discount rate
– Management fees
1
11%
– Performance fees
2
17%
Terminal value (mid-point of range of historical multiples)
3
– Management fees
13.0x
– Performance fees
5.5x
Notes:
1 The pre-tax equivalent of the net management fees discount rate is 14%.
2 The pre-tax equivalent of the net performance fees discount rate is 21%.
3 The implied terminal growth rate is 4%. The terminal value is added to cash flow projections based on the Board-approved financial plan for the year to 31 December 2022 and a further two years
of projections (2023 and 2024), and discounted.
Key assumptions at 31 December 2020: AHL GLG Numeric FRM GPM
Compound average annualised growth in AUM (over three years) 10% 4% 2% (3%) 13%
Discount rate
– Management fees
1
11% 11% 11% 11% 15%
– Performance fees
2
17% 17% 17% 17% 21%
Terminal value (mid-point of range of historical multiples)
3
– Management fees
13.0x 13.0x 13.0x 5.9x 16.8x
– Performance fees
5.5x 5.5x 5.5x 3.9x 5.5x
Notes:
1 The pre-tax equivalent of the net management fees discount rate is 14%, 13%, 14%, 14% and 18% for each of the AHL, GLG, Numeric, FRM and GPM CGUs, respectively.
2 The pre-tax equivalent of the net performance fees discount rate is 21%, 21%, 22%, 22% and 26% for each of the AHL, GLG, Numeric, FRM and GPM CGUs, respectively.
3 The implied terminal growth rates are 4%, 3%, 4%, -10%, and 9% for each of the AHL, GLG, Numeric, FRM and GPM CGUs, respectively. The terminal value is added to cash flow projections
based on the Board-approved financial plan for the year to 31 December 2021 and a further two years of projections (2022 and 2023), and discounted.
Goodwill impairment and sensitivity analyses
Details of the valuations are provided below, including sensitivity tables which show scenarios whereby the key assumptions are changed to
stressed assumptions, indicating the modelled headroom or impairment that would result. We have considered reasonably foreseeable changes
in the compound average annualised growth in AUM forecast assumption, stressing this by 2% and 10% or to the point at which impairment
would arise. 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.
Annual assessment
The value in use calculation of our liquid managers at 31 December 2021 indicates a value of $4.1 billion, with around $3.4 billion of headroom over
the carrying value of the business. Therefore, no impairment charge is deemed necessary at 31 December 2021.
Discount rates (post-tax) Multiples (post-tax)
Sensitivity analysis:
Compound average
annualised growth in AUM
Management fee/
performance fee
Management fee/
performance fee
Key assumption stressed to: 6% 4% (4)%
1
10%/16% 12%/18% 14.0x/6.5x 12.0x/4.5x
Modelled headroom/(impairment) ($m) 3,380 2,940 1,340 3,480
2
3,280
2
3,690
3
3,070
3
Notes:
1 Stressed by 10%, as opposed to the point of impairment, given an impairment scenario is not reasonably foreseeable.
2 An increase/decrease in the value in use calculation of $100 million.
3 An increase/decrease in the value in use calculation of $310 million.
Financial statements
Man Group plc | Annual Report 2021
166
Notes to the Group financial statements continued
19. Goodwill and acquired intangibles continued
Prior year assessment
An impairment expense of $55 million was recognised for the year to 31 December 2020, reflecting the 30 June 2020 impairment of the GPM CGU
goodwill balance in full.
AHL CGU
Discount rates (post-tax) Multiples (post-tax)
Sensitivity analysis:
Compound average
annualised growth in AUM
Management fee/
performance fee
Management fee/
performance fee
Key assumption stressed to: 10% 8% 0%
1
10%/16% 12%/18% 14.0x/6.5x 12.0x/4.5x
Modelled headroom/(impairment) ($m) 2,080 1,840 890 2,141
2
2,019
2
2,280
3
1,880
3
Notes:
1 Stressed by 10%, as opposed to the point of impairment, given an impairment scenario is not reasonably foreseeable.
2 An increase/decrease in the value in use calculation of $61 million.
3 An increase/decrease in the value in use calculation of $200 million.
GLG CGU
Discount rates (post-tax) Multiples (post-tax)
Sensitivity analysis:
Compound average
annualised growth in AUM
Management fee/
performance fee
Management fee/
performance fee
Key assumption stressed to: 4% 2%
1
10%/16% 12%/18% 14.0x/6.5x 12.0x/4.5x
Modelled headroom/(impairment) ($m) 21 – 23
2
19
2
30
3
12
3
Notes:
1 Stressed in a downside scenario to determine the point at which headroom would be reduced to nil, after which impairment would arise.
2 An increase/decrease in the value in use calculation of $2 million.
3 An increase/decrease in the value in use calculation of $9 million.
Numeric CGU
Discount rates (post-tax) Multiples (post-tax)
Sensitivity analysis:
Compound average
annualised growth in AUM
Management fee/
performance fee
Management fee/
performance fee
Key assumption stressed to: 2% 0% (8%)
1
10%/16% 12%/18% 14.0x/6.5x 12.0x/4.5x
Modelled headroom/(impairment) ($m) 332 306 204 346
2
318
2
369
3
295
3
Notes:
1 Stressed by 10%, as opposed to the point of impairment, given an impairment scenario is not reasonably foreseeable.
2 An increase/decrease in the value in use calculation of $14 million.
3 An increase/decrease in the value in use calculation of $37 million.
FRM CGU
Discount rates (post-tax) Multiples (post-tax)
Sensitivity analysis:
Compound average
annualised growth in AUM
Management fee/
performance fee
Management fee/
performance fee
Key assumption stressed to: (3%) (5%) (13%)
1
10%/16% 12%/18% 6.9x/4.9x 4.9x/2.9x
Modelled headroom/(impairment) ($m) 14 10 – 15
2
13
2
17
3
11
3
Notes:
1 Stressed to determine the point at which headroom would be reduced to nil, after which impairment would arise.
2 An increase/decrease in the value in use calculation of $1 million.
3 An increase/decrease in the value in use calculation of $3 million.
GPM CGU
Our value in use assessment at 30 June 2020 indicated an impairment of $55 million which impaired the goodwill balance in full, driven by slower
growth than planned and future fundraising delays due to COVID-19 which led to a reassessment of the forecast growth of the GPM business.
The GPM value in use calculation run at 31 December 2020 indicated a value of around $14 million, with $2 million of headroom over the remaining
carrying value.
Discount rates (post-tax) Multiples (post-tax)
Sensitivity analysis:
Compound average
annualised growth in AUM
Management fee/
performance fee
Management fee/
performance fee
Key assumption stressed to: 13% 11% 3%
1
14%/20% 16%/22% 17.8x/6.5x 15.8x/4.5x
Modelled headroom/(impairment) ($m) 2 (5) (12) 3
2
1
2
3
3
1
3
Notes:
1 Stressed by 10% to indicate a possible downside scenario.
2 An increase/decrease in the value in use calculation of $1 million.
3 An increase/decrease in the value in use calculation of $1 million.
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Man Group plc | Annual Report 2021
167
20. Other intangibles
Accounting policy
Other intangibles relate to capitalised computer software. Following initial recognition, other intangibles are held at cost, which includes 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, less accumulated amortisation and impairment. Capitalised computer software is amortised on a
straight-line basis over its estimated useful life (three years), with amortisation expense included within other costs in the Group income
statement. Capitalised computer software is reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. Additions relate to the continued investment in our operating platforms.
2021
$m
2020
$m
Cost at beginning of the year 112 98
A
dditions 22 22
Disposals
(4) (8)
Cost at year end
130 112
A
ccumulated amortisation at beginning of the year (73) (67)
A
mortisation (16) (14)
Disposals
4 8
A
ccumulated amortisation at year end (85) (73)
Net book value at beginning of the year 39 31
Net book value at year end
45 39
21. Deferred tax
Accounting policy
Deferred tax is recognised using the balance sheet liability method in respect of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for tax purposes.
Details of estimation and future tax rate uncertainty are included in Note 10.
2021
$m
2020
$m
Deferred tax asset
A
t beginning of the year 119 120
Charge to the Group income statement (Note 10)
– (2)
Credit to other comprehensive income and equity
7 1
Transfer to deferred tax liabilities
4 –
Other balance sheet movements
(2) –
A
t year end 128 119
Deferred tax liability
A
t beginning of the year (25) (28)
(Charge)/credit to the Group income statement (Note 10)
(4) 3
Charge to other comprehensive income and equity
(4) –
Transfer from deferred tax assets
(4) –
A
t year end (37) (25)
The deferred tax asset Group income statement charge of nil (2020: $2 million) is net of a $2 million credit relating to the incremental recognition
(2020: $14 million expense relating to derecognition) of US deferred tax assets held on the Group balance sheet, which is explained further on page
168. The net credit to other comprehensive income and equity of $3 million (2020: $1 million) relates to the defined benefit pension plan (Note 24)
and employee share-based payment schemes (Note 26).
The deferred tax liability of $37 million (2020: $25 million) largely relates to temporary differences in respect of partnership interests, unrealised gains
on investments and acquired intangible assets.
Financial statements
Man Group plc | Annual Report 2021
168
Notes to the Group financial statements continued
21. Deferred tax continued
The deferred tax asset comprises:
2021
$m
2020
$m
Deferred compensation 52 24
A
ccumulated operating losses 29 41
Tax allowances over depreciation
22 12
Future amortisation of goodwill and acquired intangible assets
14 26
Other
11 16
Deferred tax asset
128 119
Deferred tax assets arise on deferred compensation in relation to current year compensation charges which are not deductible for tax purposes until
future periods. Tax allowances over depreciation relate to deferred tax on depreciation charged on qualifying tangible assets and ROU lease assets.
The gross amount of UK non-trading losses for which a deferred tax asset has not been recognised is $25 million (2020: $25 million). These losses
are not subject to an expiration period. The gross amount of other future taxable income deductions for which a deferred tax asset has not been
recognised is $62 million (2020: $95 million), which expire in 2024.
As set out below, we have recognised accumulated deferred tax assets in the US of $74 million (2020: $81 million) that will be available to offset
future taxable profits. As the result of an increase in forecast future taxable profits in the US, we recognised an additional $2 million of the available
deferred tax assets in relation to state and city tax losses in 2021 (2020: derecognised $14 million). At 31 December 2021, the unrecognised
available US deferred tax assets relate to state and city tax losses for which we do not expect to realise sufficient future taxable profits to utilise
before they expire. We do not currently expect to pay federal tax on any profits we may earn in the US until 2024 and accordingly any movements
in the US deferred tax asset in the Group income statement are classified as a non-core item (see page 187).
US net deferred tax assets
2021
$m
2020
$m
Recognised
A
t beginning of the year 81 89
Credit/(charge) to Group income statement:
Recognition/(derecognition) of available tax assets
2 (14)
Other movements: (consumption)/generation
(12) 6
Credit to equity
5 –
Other balance sheet movements
(2) –
A
t year end 74 81
Unrecognised
A
t beginning of the year 14 –
(Credit)/charge to Group income statement (as above):
(Recognition)/derecognition of available tax assets
(2) 14
Other movements
(1) –
A
t year end 11 14
The gross amount of US non-trading losses for which a deferred tax asset has not been recognised is $158 million (2020: $197 million).
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Man Group plc | Annual Report 2021
169
22. Provisions
Accounting policy
Provisions are recognised when Man Group has a present obligation (legal or constructive) as a result of a past event, it is probable that we will
be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. All provisions are current given we do
not have the unconditional right to defer settlement.
2021
$m
2020
$m
A
t beginning of the year 9 8
Charged to the income statement 6 1
Utilised during the year
(1) –
Unused amounts reversed
– (1)
A
dditional provisions – 1
A
t year end 14 9
Provisions relate to ongoing claims as well as leasehold property dilapidations.
23. Investment in associate
Accounting policy
Associates are entities in which Man Group holds an interest and over which we have significant influence but not control and are accounted
for using the equity method. In assessing significant influence, we consider 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 our share of cumulative post-acquisition movements in undistributed profits/losses.
Gains and losses on transactions between Man Group and our associates are eliminated to the extent of our 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, with any impairment recognised in the Group income statement.
On 30 June 2021, we acquired a 23% interest in Hub Platform Technology Partners Ltd (HUB), a company incorporated and operating in England
and Wales. HUB will provide a cloud-based operating platform aimed at transforming the operations technology available to asset managers. In the
early years of operation HUB will be in the development phase and therefore is expected to be loss-making. Therefore the equity accounted losses
are not considered an indicator of impairment. Our $20 million investment in HUB was comprised of $19 million of cash and $1 million of non-cash
consideration. We have not provided any financial support to HUB during the year.
2021
$m
A
t beginning of the year –
A
cquisitions 20
Share of post-tax loss
(2)
A
t year end 18
Financial statements
Man Group plc | Annual Report 2021
170
Notes to the Group financial statements continued
24. Pension
Accounting policy
We operate 12 (2020: 12) defined contribution plans and two (2020: two) funded defined benefit plans.
Defined contribution plans
We pay contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. We have no
further payment obligation once the contributions have been paid.
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,
we ultimately underwrite the risks related to the defined benefit plans. The risks to which this exposes us include:
• Uncertainty in benefit payments: the value of our liabilities for post-retirement benefits will ultimately depend on the amount of benefits paid out.
This in turn will depend on the level of inflation (for those benefits that are subject to some form of inflation protection) and how long individuals
live.
• Volatility in asset values: we are exposed to future movements in the values of assets held in the plans to meet future benefit payments.
• Uncertainty in cash funding: movements in the values of the obligations or assets may result in us being required to provide higher levels
of cash.
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).
– The UK Plan
The UK Plan is operated separately from Man Group and managed by independent trustees. The trustees are responsible for payment of the
benefits and management of the UK Plan’s assets. Under UK regulations, Man Group and the trustees of the UK Plan are required to agree a
funding strategy and contribution schedule for the UK Plan. We have concluded that we have no requirement to adjust the balance sheet to
recognise either a current surplus or a minimum funding requirement on the basis that we have an unconditional right to a refund of a current or
projected future surplus at some point in the future.
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 Plan, with future benefits provided via a defined contribution plan.
– The Swiss Plan
In Switzerland, we operate a retirement foundation with assets which are held separately from Man 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
Man 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.
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, we will consider how to remove a deficit as quickly as possible. The Swiss
Plan surplus is restricted by the value of the employer contribution reserve, which provides the asset ceiling on amounts available to Man Group.
Defined contribution plans
Defined contribution costs totalled $12 million for the year to 31 December 2021 (2020: $12 million) and are recognised as pension costs within
compensation in the Group income statement when they are due (Note 7).
Defined benefit plans
At 31 December 2021, the UK Plan comprised 94% (31 December 2020: 94%) of our total defined benefit pension obligations.
2021
$m
2020
$m
Present value of funded obligations (444) (490)
Fair value of plan assets 473 492
Surplus
29 2
A
mount not recognised due to asset ceiling (Swiss Plan) (2) –
Net pension asset
27 2
The increase in the net pension asset in 2021 is driven primarily by the UK Plan. This is largely as a result of an increase in the liability discount rate
assumption, as well as plan funding contributions paid in 2021, which are partially offset by a rise in inflation expectations and assets performing
below the liability growth rate (discount rate) and an increase in life expectancy rates.
As a result of completion of the triennial valuation as at 31 December 2020 during the year, plan funding contributions of $3 million were made to
the UK Plan in the year to 31 December 2021 (2020: nil). The next actuarial valuation has an effective date of 31 December 2023, whereby a new
recovery plan may be agreed.
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Man Group plc | Annual Report 2021
171
24. Pension continued
Impact on the Group financial statements
Changes in the present value of the defined benefit obligations are as follows:
2021
$m
2020
$m
Present value of funded obligations at beginning of the year 490 422
Group income statement:
Current service cost to employer
2 1
Interest cost
6 8
Currency translation difference
(5) 18
A
mounts recognised in other comprehensive income:
Remeasurements due to:
– changes in financial assumptions
(36) 54
– changes in demographic assumptions
6 2
– experience adjustments
(2) (1)
Employee contributions
1 1
A
ctual benefit payments (18) (15)
Present value of funded obligations at year end
444 490
The allowance for the estimated cost of removing Guaranteed Minimum Pension inequalities in the UK Plan of $1 million at 31 December 2021 is
unchanged from 31 December 2020.
Changes in the fair value of plan assets are as follows:
2021
$m
2020
$m
Fair value of plan assets at beginning of the year 492 439
Group income statement:
Interest income on plan assets
6 8
Currency translation difference
(5) 19
A
mounts recognised in other comprehensive income:
Actual return on plan assets less interest on plan assets: other comprehensive income
(8) 39
Employer contributions (including plan funding)
5 1
Employee contributions
1 1
Benefits paid
(18) (15)
Fair value of plan assets at year end
473 492
Changes in the net pension asset are as follows:
2021
$m
2020
$m
Net pension asset at beginning of the year 2 16
Group income statement:
Pension costs (Note 7)
(2) (1)
Currency translation difference
– 1
Other comprehensive income (including asset ceiling adjustment on page 170)
22 (15)
Employer contributions (including plan funding)
5 1
Net pension asset at year end
27 2
Financial statements
Man Group plc | Annual Report 2021
172
Notes to the Group financial statements continued
24. Pension continued
What actuarial assumptions have we used?
The most significant actuarial assumptions used in the valuations of the two plans are as follows:
UK Plan Swiss Plan
2021
% p.a.
2020
% p.a.
2021
% p.a.
2020
% p.a.
Discount rate 1.9 1.3 0.4 0.2
Price inflation 3.4 3.0 1.0 1.1
Future salary increases
3.4 3.0 1.0 1.1
Pension payment increases
3.8 3.6 – –
Deferred pensions increases
5.0 5.0 – –
Interest crediting rate
– – 0.4 0.2
Social security increases
– – 1.0 1.0
At 31 December 2021, mortality rates in the UK Plan are assumed to be in line with 100% of the S3NA Very Light tables for high earners (all
members with pensions of more than £50,000 p.a. at 31 December 2020), and S3NA tables for all other members (2020: same but based on the
S2NA tables, and Light for high earners).
These mortality tables are assumed to be projected by year of birth with allowance for future improvements in longevity in line with the 2020 CMI
projections with a long-term rate of improvement of 1.25% p.a. for males and females, a smoothing parameter of 7, an initial improvements
parameter of 0.50% p.a. for high earners and 0.25% p.a. for all other members and a nil weighting to 2020 mortality data (2020: same as at
31 December 2021 but using the 2019 CMI projections).
At 31 December 2021, mortality rates in the Swiss Plan are assumed to be in line with the Swiss BVG 2020 generational tables (2020: BVG 2015
generational tables).
Illustrative life expectancies are set out in the table below.
UK Plan
Swiss Plan
Years 2021 2020
2021 2020
Life expectancy of male aged 60 at year end 27.1 26.8 27.6 27.6
Life expectancy of male aged 60 in 20 years 28.6 28.3 30.0 29.3
Life expectancy of female aged 60 at year end
29.5 29.0 29.4 29.8
Life expectancy of female aged 60 in 20 years
30.8 30.6 31.5 31.5
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 16 years, and the duration of the Swiss Plan is approximately 13 years.
Sensitivity analysis
The table below illustrates the impact on the assessed value of the benefit obligations from changing the most sensitive actuarial assumptions
in isolation. The calculations to produce the below figures have been carried out using the same method and data as our pension figures. Each
assumption has been varied individually and a combination of changes in assumptions could produce a different result.
At 31 December 2021:
Increase in obligation
$m
UK Plan Swiss Plan
Discount rate decreased by 0.1% p.a. 6 –
Inflation rate increased by 0.1% p.a. 2 –
One year increase in assumed life expectancy
20 –
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
173
24. Pension continued
Pension asset investments
The assets held by the two plans at 31 December 2021 are as follows:
UK Plan Swiss Plan
$m % $m %
A
bsolute return bonds 109 25 – –
Diversified growth funds 106 24 – –
Liability-driven investments (LDI)
104 23 – –
Man Alternative Risk Premia
56 13 – –
Index-linked government bonds
45 10 – –
Swiss bonds
– – 9 30
Non-Swiss equities
– – 8 27
Non-Swiss bonds
– – 4 14
Property
– – 3 10
Swiss equities
– – 3 10
Hedge funds
– – 1 3
Cash
23 5 1 3
Other
– – 1 3
Total assets
443 100 30 100
The UK Plan investment strategy is set by the trustees. The current strategy is broadly split into growth and matching portfolios. The growth portfolio
is invested in diversified growth funds and Man Alternative Risk Premia. The matching portfolio is invested primarily in government and corporate
bonds (the latter through the absolute return bonds holdings), and LDI funds. The UK Plan investment strategy hedges around 100% of the
movement in the ‘technical provisions’ funding measure (as opposed to the IAS 19 accounting measure) for both interest rate and inflation
expectation changes.
Part of the investment objective of the UK Plan is to minimise fluctuations in the UK Plan’s funding levels due to changes in the value of the liabilities.
This is primarily achieved using the LDI funds, which aim to hedge movements in the pension liability due to changes in interest rate and inflation
expectations. LDI primarily involves the use of government bonds (including repurchase agreements) and derivatives such as interest rate and
inflation swaps. There are no annuities or longevity swaps. These instruments are typically priced and collateralised daily by the UK Plan’s LDI
manager and/or central clearing houses. Given that the purpose of LDI is to hedge corresponding liability exposures, the main risk is that the
investments held move differently to the liability exposures. This risk is managed by the trustees, their advisers and the UK Plan’s LDI manager,
who regularly assess the position.
The government bond assets and diversified growth funds have prices quoted in active markets and the absolute return bonds, LDI and Man
Alternative Risk Premia fund are primarily unquoted. At 31 December 2021, around 35% of the UK Plan assets relate to those with quoted prices
and 65% with unquoted prices (2020: around 25% quoted and 75% unquoted). The UK Plan does not invest directly in property occupied by
Man Group or our shares.
Financial statements
Man Group plc | Annual Report 2021
174
Notes to the Group financial statements continued
25. Employee Trust
Accounting policy
The Employee Trust, which is consolidated into Man Group as outlined in Note 1, has the obligation to deliver deferred share-based and fund
product-based compensation which has been granted to employees (see Note 7 and Note 26), and accordingly holds shares and fund
investments to deliver against these future obligations. Shares held by the Employee Trust are accounted for as outlined in Note 27.
In 2021, we funded $33 million via contribution or loan (2020: $42 million) to enable the Employee Trust to meet its current period obligations.
At 31 December 2021, the net assets of the Employee Trust amounted to $103 million (2020: $105 million). These assets include 30,611,905
(2020: 31,529,719) ordinary shares in the Company (Note 27), and $41 million of fund product investments (2020: $43 million) which are included
within investments in fund products (Note 14).
During the year, the trustees of the Employee Trust waived all of the interim dividend for the year ended 31 December 2021 on each of the
30,699,189 ordinary shares registered in its name at the relevant eligible date (2020 interim dividend: waived on all 31,567,105 shares) and all
of the final dividend for the year ended 31 December 2020 on each of the 31,626,264 ordinary shares (2019 final dividend: waived on all
31,553,308 shares).
26. Share-based payment schemes
Accounting policy
Man Group operates equity-settled share-based payment schemes which are remuneration payments to selected employees that take the form
of an award of shares in the Company. These typically vest over three years, although conditions vary between different types of award. The fair
value of the employee services received in exchange for the share awards/options granted is recognised as an expense (Note 7), with the
corresponding credit recognised in equity, and is determined by reference to the fair value of the share awards/options at grant date.
We calculate the fair value of share options using the Black-Scholes valuation model, which takes into account the effect of both financial and
demographic assumptions. Forfeiture and early vesting assumptions are based on historical observable data. Changes to the original estimates,
if any, are included in the Group income statement, with a corresponding adjustment to equity.
Share awards
The fair values of share awards granted in the year and the assumptions used in the calculations are as follows:
Deferred share plan
Grant dates 12/03/2021 – 29/09/2021 13/03/2020 – 13/11/2020
Share awards granted in the year 11,648,047 19,829,902
Weighted average fair value per share award granted ($) 2.2 1.3
Executive directors’ long-term incentive plans
Grant dates 12/03/2021 13/03/2020
Share awards granted in the year 2,798,475 4,718,626
Weighted average fair value per share award granted ($) 2.2 1.3
Movements in the number of share awards outstanding are as follows:
2021 2020
Share awards outstanding at beginning of the year 40,284,892 35,600,270
Granted 14,446,522 24,548,528
Forfeited
(1,277,288) (1,437,310)
Exercised
(10,852,007) (18,426,596)
Share awards outstanding at year end
42,602,119 40,284,892
Share awards exercisable at year end 43,077 43,590
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Man Group plc | Annual Report 2021
175
26. Share-based payment schemes continued
Share options
The fair values of share options granted in the year under the Sharesave employee share option scheme, and the assumptions used in the
calculations, are as follows:
Grant date 07/09/2021 07/09/2020
Weighted average share price at grant date ($)
1
3.0 1.6
Weighted average exercise price at grant date ($)
2
2.4 1.4
Share options granted in the period 938,879 4,313,479
V
esting period (years) 3–5 3–5
Expected share price volatility (%) 30 30
Dividend yield (%) 6 6
Risk-free rate (%) 0.2 (0.1)
Expected option life (years) 3.4 3.4
Number of options assumed to vest 715,196 3,289,641
A
verage fair value per option granted ($) 0.5 0.2
Notes:
1 Sterling share price at grant date each year of £2.15 and £1.18, respectively.
2 Sterling exercise price each year of £1.71 and £1.07, respectively.
The expected share price volatility is based on historical volatility over the past five years. The expected option life is the average expected period
to exercise. The risk-free rate of return is the yield on zero-coupon UK government bonds of a term consistent with the assumed option life.
Movements in the number of share options outstanding are as follows:
2021 2020
Number
Weighted
average
exercise price
1
($ per share)
Number
Weighted
average
exercise price
1
($ per share)
Share options outstanding at beginning of the year 33,501,391 3.4 43,754,176 3.8
Granted 938,879 2.3 4,313,479 1.5
Forfeited
(1,031,477) 1.7 (1,859,636) 1.7
Expired
(25,776,840) – (12,523,057) –
Exercised
2
(1,410,897) 1.7 (183,571) 1.3
Share options outstanding at year end
6,221,056 1.6 33,501,391 3.4
Share options exercisable at year end 127,826 1.9 26,857,475 4.1
Notes:
1 Calculated at 31 December exchange rates each year.
2 The weighted average share price of options exercised was $2.18 (2020: $1.71).
The share options outstanding at year end have a weighted average exercise price and expected remaining life as follows:
Range of exercise prices ($ per share)
2021 2020
Number of
share options
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
0.00–3.00 6,221,056 1.6 2.3 7,724,551 1.6 2.5
3.01–5.00 – – – 25,776,840 4.2 0.2
6,221,056 33,501,391
Financial statements
Man Group plc | Annual Report 2021
176
Notes to the Group financial statements continued
27. Share capital, Treasury share reserve and earnings per share (EPS)
Accounting policy
Share capital and Treasury share reserve
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 from the proceeds, net of tax.
Share repurchases are accounted for at the point we are committed, recognising a liability for the full amount of the commitment including
directly attributable costs, with a corresponding debit to equity. Where repurchased shares are held in Treasury, a transfer from the profit and
loss reserve to the Treasury share reserve is recognised for the full amount of the consideration paid. Where shares are repurchased and
subsequently cancelled, the equivalent par value by which the Company’s share capital is reduced is transferred to the capital redemption
reserve.
Treasury shares and own shares held by the Employee Trust (Note 25) are recorded at cost, including any directly attributable incremental costs
(net of tax), and are deducted from equity (within the respective reserves) until the shares are sold, cancelled or transferred to employees. 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.
EPS
The calculation of basic EPS is based on statutory profit and the weighted average number of ordinary shares in issue during the period,
excluding Treasury shares and the shares owned by the Employee Trust (Note 25).
For diluted EPS, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potentially dilutive ordinary
shares in relation to our share-based payment schemes (Note 26).
Ordinary shares have a par value of 3
3
/
7
¢ per share (2020: 3
3
/
7
¢ per share) and represent 100% 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. Treasury
shares are ordinary shares previously repurchased by the Company but not cancelled (and therefore deducted from equity and included within
the Treasury share reserve) and, as they are no longer outstanding, they are excluded for earnings per share and voting rights purposes.
During the year ended 31 December 2021, the Company cancelled 68,686,957 ordinary shares of 3
3
/
7
¢ per share which were held in Treasury.
Shares cancelled during the year represent 5% of issued share capital (excluding Treasury shares) as at 31 December 2021.
During the year ended 31 December 2021, $180 million (2020: $107 million) of ordinary shares were repurchased at an average price of 199.9 pence
(2020: 122.8 pence), buying back 66 million shares (2020: 69 million shares), which had an accretive impact on earnings per share of 1.7% (2020:
2.6%). This relates to the completion of the remaining $64 million of the share repurchase programme announced in September 2020, the completion
of the $100 million share repurchase announced in July 2021 and $16 million of the initial committed $125 million tranche of the $250 million share
repurchase announced in December 2021.The share buyback is to be conducted in more than one tranche, providing flexibility over capital usage.
The purpose of the share repurchases was to deliver returns to shareholders and all repurchased shares were held in Treasury. Further detail on
Man Group’s approach to capital management and shareholder returns can be found on page 29. Shares repurchased during the year represent
4.7% of issued share capital (excluding Treasury shares) as at 31 December 2021. At 25 February 2022, we had an unexpired authority to repurchase
up to 64,868,693 of our ordinary shares. A special resolution will be proposed at the forthcoming Annual General Meeting (AGM), pursuant to which the
Company will seek authority to repurchase up to 136,949,799 ordinary shares, representing 10% of the issued share capital (excluding Treasury shares)
at 25 February 2022.
Details of movements in the number of ordinary shares and the shares used to calculate basic and diluted EPS are provided below.
2021 2020
Total
number
Weighted
average
Nominal
value
$m
Total
number
Weighted
average
Nominal
value
$m
Number of shares at beginning of year 1,541,794,770 1,541,794,770 53 1,541,794,770 1,541,794,770 53
Cancellation of own shares held in Treasury (68,686,957) (9,611,929) (2) – – –
Number of shares at period end
1,473,107,813 1,532,182,841 51 1,541,794,770 1,541,794,770 53
Shares held in Treasury reserve (79,040,317) (98,674,820) (86,156,381) (56,589,026)
Shares owned by Employee Trust (Note 25)
(30,611,905) (31,044,822) (31,529,719) (30,913,017)
Basic number of shares
1,363,455,591 1,402,463,199 1,424,108,670 1,454,292,727
Dilutive impact of employee share awards 35,415,800 23,875,394
Dilutive impact of employee share options
2,165,726 174,183
Dilutive number of shares
1,440,044,725 1,478,342,304
2021
2020
Statutory profit ($m) 487 138
Basic EPS 34.7¢ 9.5¢
Diluted EPS
33.8¢ 9.3¢
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Man Group plc | Annual Report 2021
177
28. Dividends
Accounting policy
Dividend distributions to the Company’s shareholders are recognised directly within equity in the period in which the dividend is paid or, if
required, approved by the Company’s shareholders. Details of our dividend policy are included in the Shareholder information section on page
188. The number of dividends waived in the period are included in Note 25.
2021
$m
2020
$m
Ordinary shares
Final dividend paid for the year to 31 December 2020: 5.7¢ (2019: 5.1¢) 81 75
Interim dividend paid for the six months to 30 June 2021: 5.6¢ (2020: 4.9¢)
79 72
Dividends paid
160 147
Proposed final dividend for the year to 31 December 2021: 8.4¢ (2020: 5.7¢) 115 81
29. Segmental analysis
Accounting policy
The criteria for identifying an operating segment is that it is a component of Man Group whose results are regularly reviewed by the Board and
the Senior Executive Committee to make decisions about resources to be allocated to the segment and to assess its performance.
Management information regarding revenues, net management fee margins and investment performance relevant to the operation of the investment
managers, products and the investor base are reviewed by the Board and Senior Executive Committee. A centralised shared infrastructure for
operations, product structuring, distribution and support functions for the investment management styles which Man Group incorporates means that
operating costs are not allocated to constituent parts of the investment management business. As a result, performance is assessed, resources are
allocated, and other strategic and financial management decisions are determined by the Board and Senior Executive Committee on the basis of our
investment management business as a whole. Accordingly, we operate and report as a single segment investment management business, together with
relevant information regarding AUM flows and net margins, to allow for analysis of the direct contribution of products and the respective investor base.
30. Geographical disclosure
Accounting policy
Disclosure of revenue by geographic location is based on the registered domicile of the fund entity or managed account paying our fees.
Non-current assets are allocated based on where the assets are located, and include goodwill and other acquired intangible assets, other
intangibles, leasehold improvements and equipment, and right-of-use lease assets. For goodwill and other acquired intangible assets, we
consider that the location of the intangibles is best reflected by the location of the individuals managing those assets.
2021
$m
2020
$m
Revenues by
fund location
Non-current
assets
Revenues by
fund location
Non-current
assets
Cayman Islands 701 – 384 –
Ireland 241 – 195 –
United Kingdom and the Channel Islands
189 693 158 727
United States of America
204 202 104 224
Other countries
146 9 98 12
1,481 904 939 963
Revenue from one fund marginally exceeded 10% of total annual revenue, driven by high levels of performance fees crystallising during the year.
Excluding performance fees, revenue from no single fund exceeded 10% of revenue for the year.
Financial statements
Man Group plc | Annual Report 2021
178
Notes to the Group financial statements continued
31. Related party transactions
Accounting policy
Related parties comprise key management personnel, associates and fund entities which we are deemed to control (see Note 14). All
transactions with related parties were carried out on an arm’s length basis.
Management fees earned from fund entities which we are deemed to control are detailed in Note 14.2. Details of transactions with associates are
included in Note 23.
The Executive Committee, together with the non-executive directors, are considered to be our key management, being those directors, partners and
employees having authority and responsibility for planning, directing and controlling our activities.
Key management compensation
2021
$m
2020
$m
Salaries and other short-term employee benefits
1
64 32
Share-based payment charge 25 10
Fund product-based payment charge
15 13
Pension costs (defined contribution)
1 1
Total
105 56
Note:
1 Includes salary, benefits and cash bonus.
We paid £35,000 to the Standards Board for Alternative Investments Limited during the year, which is considered a related party.
32. Other matters
In July 2019, the Public Institution for Social Security in Kuwait (PIFSS) served a claim against a number of parties, including certain Man Group
companies, a former employee of Man Group and a former third-party intermediary. The subject matter of these allegations dates back over a period
of 20 years. PIFSS is seeking compensation of $156 million (plus compound interest) and certain other remedies which are unquantified in the claim.
We dispute the allegations and consider there is no merit to the claim (in respect of liability and quantum), and will therefore vigorously and robustly
defend the proceedings.
We are subject to various other claims, assessments, regulatory enquiries and investigations in the normal course of business. The directors do not
expect such matters to have a material adverse effect on our financial position.
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
179
33. Structured entities
Accounting policy
We have evaluated all exposures and concluded that where we hold an investment, fee receivable, accrued income, or commitment with an
investment fund or a CLO, this represents an interest in a structured entity as defined by IFRS 12 ‘Disclosure of Interests in Other Entities’.
As with structured entities, investment funds are designed so that their activities are not governed by way of voting rights, and contractual
arrangements are the dominant factor in affecting an investor’s returns. The activities of these entities are governed by investment management
agreements or, in the case of CLOs, indentures.
The key considerations in assessing whether we control a structured entity, and therefore whether it should be consolidated into the Group
financial statements, are outlined in Note 14. Consolidated structured entities are included within Note 14.2.
Our maximum exposure to loss from unconsolidated structured entities is the sum total of any investment held, fee receivables and
accrued income.
Our interest in and exposure to unconsolidated structured entities is as follows:
2021
Total
AUM
($bn)
Less infrastructure
mandates and
consolidated
fund entities
1
($bn)
Total AUM
unconsolidated
structured
entities
($bn)
Number
of funds
Net
management
fee margin
2
(%)
Fair value of
investment
held
($m)
Fee
receivables
and accrued
income
($m)
Maximum
exposure
to loss
($m)
A
lternative
A
bsolute return 41.2 0.2 41.0 97 1.19 121 235 356
Total return 35.4 0.1 35.3 70 0.62 222 39 261
Multi-manager solutions 15.0 8.9 6.1 53 0.22 2 20 22
Long-only
Systematic 36.1 0.1 36.0 67 0.27 8 58 85
Discretionary 20.9 0.2 20.7 58 0.58 67 18 66
Total 148.6 9.5 139.1 345 420 370 790
2020
Total
AUM
($bn)
Less infrastructure
mandates and
consolidated
fund entities
1
($bn)
Total AUM
unconsolidated
structured
entities
($bn)
Number
of funds
Net
management
fee margin
2
(%)
Fair value of
investment
held
($m)
Fee
receivables
and accrued
income
($m)
Maximum
exposure
to loss
($m)
A
lternative
A
bsolute return 34.0 0.1 33.9 103 1.18 98 175 273
Total return 29.0 0.1 28.9 60 0.62 184 29 213
Multi-manager solutions 14.2 7.1 7.1 71 0.24 1 7 8
Long-only
Systematic 27.8 0.2 27.6 71 0.30 9 25 34
Discretionary 18.6 0.1 18.5 50 0.62 37 16 53
Total 123.6 7.6 116.0 355 329 252 581
Notes:
1 For infrastructure mandates where we do not act as investment manager or adviser, Man Group’s role in directing investment activities is diminished and therefore these are not considered
structured entities.
2 Net 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%.
On occasion, we agree to purchase illiquid investments from the funds at market rates in order to facilitate investor withdrawals. We have not
provided any other non-contractual support to unconsolidated structured entities. Further information about market risks on our investments
in fund products is included in Note 16. Risks relating to investment funds can be found in the Risk management section of the Strategic report
on pages 30 to 37.
Financial statements
Man Group plc | Annual Report 2021
180
Notes to the Group financial statements continued
34. Group investments
Details of the Company’s subsidiaries are provided below. The list excludes consolidated structured entities (Note 14.2) on the basis that, although
these are consolidated for the purposes of IFRS, they are not within the legal ownership of Man Group. The country of operation is the same as the
country of incorporation, the year end is 31 December, and the effective Group interest represents both the percentage held and voting rights of
ordinary shares or common stock (or the local equivalent thereof), unless otherwise stated.
Parent company
Company name Registered address
Country of
incorporation
Man Group plc 22 Grenville Street, St Helier, Jersey, JE4 8PX Jersey
Subsidiaries
Company name Registered address
Direct or
indirect
Country of
incorporation
Effective Group
interest %
Man Group Treasury Limited 22 Grenville Street, St Helier, Jersey, JE4 8PX Direct Jersey 100
A
alto Invest Cayman Limited PO Box MP10085, 3rd Floor Zephyr House, 122 Mary
Street, George Town, Grand Cayman, KY1-1001
Indirect Cayman 100
A
HL Partners LLP
1,2
Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
FA Sub 2 Limited Ritter House, Wickhams Cay II, Road Town,
Tortola, VG1110
Indirect BVI 100
FA Sub 3 Limited Ritter House, Wickhams Cay II, Road Town,
Tortola, VG1110
Indirect BVI 100
Financial Risk Management Limited Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
FRM Holdings Limited Gaspé House, 66-72 Esplanade, St Helier, JE2 3QT Indirect Jersey 100
FRM Investment Management GP (USA) LLC
5
4001 Kennett Pike, Suite 302, Wilmington DE 19807 Indirect US 100
FRM Investment Management Limited PO Box 186, Royal Chambers, St. Julian’s Avenue, St
Peter Port, GY1 4HP, Guernsey
Indirect Guernsey 100
FRM Investment Management (USA) LLC
5
4001 Kennett Pike, Suite 302, Wilmington DE 19807 Indirect US 100
GLG Holdings Limited Wickhams Cay, PO Box 662, Road Town, Tortola Indirect BVI 100
GLG LLC
5
4001 Kennett Pike, Suite 302, Wilmington DE 19807 Indirect US 100
GLG Partners Hong Kong Limited Unit 2206-2207, 22/F Man Yee Building, No. 68 Des
Voeux Road Central
Indirect Hong Kong 100
GLG Partners Limited Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
GLG Partners LP
2
Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
Man Asset Management (Cayman) Limited PO Box 309, Ugland House, South Church Street,
George Town, Grand Cayman, KY1-1104
Indirect Cayman 100
Man Asset Management (Ireland) Limited 70 Sir John Rogerson’s Quay, Dublin 2 Indirect Ireland 100
Man Australia GP Limited Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
Man Australia LP
2
Level 28, Chifley Tower, 2 Chifley Square, Sydney,
NSW 2000
Indirect Australia 100
Man (Europe) AG
A
ustrasse 56, 9490, Vaduz, Liechtenstein Indirect Liechtenstein 100
Man Fund Management (Guernsey) Limited PO Box 186, Royal Chambers, St. Julian’s Avenue,
St Peter Port, GY1 4HP, Guernsey
Indirect Guernsey 100
Man Fund Management Netherlands BV Beurs – World Trade Center, Beursplein 37,
3011 AA, Rotterdam
Indirect Netherlands 100
Man Fund Management UK Limited Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
Man GLG Partners LLP
1,2
Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
Man Global Private Markets (UK) Limited Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
Man Global Private Markets (USA) Inc. 4001 Kennett Pike, Suite 302, Wilmington DE 19807 Indirect US 100
Man Global Private Markets SLP LLC
5
4001 Kennett Pike, Suite 302, Wilmington DE 19807 Indirect US 100
Man Group Holdings Limited
3
Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
Man Group Investments Limited Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
Man Group Japan Limited PO Box 556, 1st Floor, Les Echelons Court, Les Echelons,
South Esplanade, St Peter Port, GY1 6JB, Guernsey
Indirect Guernsey 100
Man Group Limited Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
Man Group Operations Limited Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
Man Group Services Limited Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
Man Group UK Limited Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
Man Investments AG Huobstrasse 3, 8808 Pfäffikon SZ Indirect Switzerland 100
Man Investments Australia Limited Level 28, Chifley Tower, 2 Chifley Square, Sydney,
NSW 2000
Indirect Australia 100
Man Investments (CH) AG Huobstrasse 3, 8808 Pfäffikon SZ Indirect Switzerland 100
Man Investments Finance Limited Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
Man Investments Finance Inc.
4001 Kennett Pike, Suite 302, Wilmington DE 19807 Indirect US 100
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
181
34. Group investments continued
Subsidiaries continued
Company name Registered address
Direct or
indirect
Country of
incorporation
Effective Group
interest %
Man Investments Holdings Inc 4001 Kennett Pike, Suite 302, Wilmington DE 19807 Indirect US 100
Man Investments Holdings (Jersey) Limited
(formerly E D & F Man Investments Limited)
15 Esplanade, St Helier, JE1 1RB Indirect Jersey 100
Man Investments Holdings (Netherlands) B.V.
(formerly E.D.& F. Man Investments B.V.)
Beurs – World Trade Center, Beursplein 37,
3011 AA, Rotterdam
Indirect Netherlands 100
Man Investments Holdings Limited Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
Man Investments (Hong Kong) Limited Unit 2206-2207, 22/F Man Yee Building, No.68
Des Voeux Road Central
Indirect Hong Kong 100
Man Investments Inc. 15 North Mill Street, Nyack, NY 10960, United States Indirect US 100
Man Investments Limited Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
Man Investment Management (Shanghai)
6
Co., Ltd
Room 1817 Bund Centre, No. 222 Yan An East Road,
Shanghai, 200002
Indirect China 100
Man Investments (Shanghai) Limited
6
Room 1818, Bund Centre, No. 222 Yan An East Road,
Shanghai, 200002
Indirect China 100
Man Investments (USA) Corp. 4001 Kennett Pike, Suite 302, Wilmington DE 19807 Indirect US 100
Man Investments USA Holdings Inc. 4001 Kennett Pike, Suite 302, Wilmington DE 19807 Indirect US 100
Man Mash Limited Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
Man Principal Strategies Corp 4001 Kennett Pike, Suite 302, Wilmington DE 19807 Indirect US 100
Man Property Holdings Limited 22 Grenville Street, St Helier, Jersey, JE4 8PX Indirect Jersey 100
Man Solutions Limited Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
Man Solutions (USA) LLC
5
4001 Kennett Pike, Suite 302, Wilmington DE 19807 Indirect US 100
Man Strategic Holdings Limited Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
Man Valuation Services Limited Riverbank House, 2 Swan Lane, London, EC4R 3AD Indirect UK 100
Man Worldwide Operations
Management Limited
22 Grenville Street, St Helier, Jersey, JE4 8PX Indirect Jersey 100
Mount Granite Limited Wickhams Cay, PO Box 662, Road Town, Tortola Indirect BVI 100
Net Zero Energy GP Inc.
4001 Kennett Pike, Suite 302, Wilmington DE 19807 Indirect US 100
Numeric Holdings LLC
5
4001 Kennett Pike, Suite 302, Wilmington DE 19807 Indirect US 100
Numeric Investors LLC
5
4001 Kennett Pike, Suite 302, Wilmington DE 19807 Indirect US 100
Numeric Midco LLC
5
4001 Kennett Pike, Suite 302, Wilmington DE 19807 Indirect US 100
RBH Holdings (Jersey) Limited IFC 5, St Helier, JE1 1ST, Jersey Indirect Jersey 100
RMF Co-Investment Limited
4
PO Box 309, Ugland House, South Church Street,
George Town, Grand Cayman, KY1-1104
Indirect Cayman 100
Silvermine Capital Management LLC
5
4001 Kennett Pike, Suite 302, Wilmington DE 19807 Indirect US 100
GLG Partners UK Group Ltd (in liquidation) Kings Orchard, 1 Queen Street, Bristol, BS2 0HQ Indirect UK 100
GLG Partners UK Holdings Ltd (in liquidation) Kings Orchard, 1 Queen Street, Bristol, BS2 0HQ Indirect UK 100
Man Fund Management Limited
(in liquidation)
Cranford Centre, Stillorgan Road, Dublin 4 Indirect Ireland 100
Man UK Strategies Limited (in liquidation)
Kings Orchard, 1 Queen Street, Bristol, BS2 0HG Indirect UK 100
Notes:
1 The financial year end is 31 March.
2 Partnership interest.
3 Holdings comprise ordinary shares and deferred shares.
4 Holdings comprise ordinary shares and preference shares.
5 Member interest.
6 Equity interest.
Financial statements
Man Group plc | Annual Report 2021
182
Five-year record
Unaudited
2021
$m
2020
$m
2019
$m
2018
$m
2017
$m
Income statement
Core net management fee revenue
1
877 730 751 777 711
Core performance fees
1
569 179 325 127 289
Core profit before tax
1
658 284 384 237 359
Core management fee profit before tax
1
266 180 170 203 178
Core performance fee profit before tax
1
392 104 214 34 181
Core profit
1
557 240 325 204 315
Statutory profit before tax 590 179 307 278 272
Statutory profit 487 138 285 273 255
Statutory EPS (diluted) 33.8¢ 9.3¢ 18.4¢ 17.0¢ 15.3¢
Core EPS
1
38.7¢ 16.2¢ 21.0¢ 12.7¢ 18.9¢
Core management fee EPS
1
15.7¢ 10.3¢ 9.7¢ 11.0¢ 9.4¢
Balance sheet
Net cash 387 351 281 220 229
Net assets
1,651 1,497 1,624 1,593 1,716
Net financial assets
1
907 716 674 644 443
Other metrics
Cash flow from operating activities before working capital movements
1
700 341 385 311 431
Ordinary dividends per share
14.0¢ 10.6¢ 9.8¢ 11.8¢ 10.8¢
A
ssets under management ($bn) 148.6 123.6 117.7 108.5 109.1
A
verage headcount
2
1,453 1,456 1,413 1,376 1,313
USD/GBP exchange rates
Average
0.7267 0.7789 0.7830 0.7489 0.7759
Year-end
0.7390 0.7315 0.7544 0.7837 0.7396
Notes:
1 See pages 183 to 187 for details of our alternative performance measures.
2 The average headcount includes directors, employees, partners and contractors.
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
183
Alternative performance measures
We assess our performance using a variety of alternative performance measures (APMs). We discuss our results on a statutory as well as a ‘core’
basis. The rationale for using core measures is explained below. The APMs we use may not be directly comparable with similarly titled measures
used by other companies.
The directors consider that, in order to assess operating performance period on period, our statutory results are most meaningful when considered
together with an alternative ‘core’ basis which excludes profits or losses generated outside of our investment management business, acquisition
and disposal-related items (including non-cash items such as amortisation of acquired intangible assets), impairment of assets, costs relating to
substantial restructuring plans, unrealised foreign exchange movements on lease liabilities, pension and associated deferred tax and certain
significant event-driven gains or losses, or allocates them to the appropriate time period, which therefore reflects the revenues and costs that drive
our cash flows and inform the basis on which our variable compensation is assessed. All income and expenses relating to our consolidated fund
entities are also reclassified to core gains on investments in order to better reflect these as part of our seed book programme. Tax on non-core
items and movements in deferred tax relating to the consumption or recognition of tax assets in the US are similarly excluded from core profit in
order to best reflect cash taxes paid. The directors expect to apply their approach to the classification of non-core items consistently from period
to period, maintaining an appropriate symmetry between losses and gains and the reversal of any amounts previously classified as non-core.
In addition to core profit and related core measures, we previously reported adjusted profit and related adjusted measures. Adjusted profit was
defined as core profit plus revenue relating to legacy guaranteed products. Due to the roll-off of revenues from these products in 2019, core and
adjusted profit and their related measures became equivalent in 2020, and therefore we now report our APMs on a core basis only.
Core profit and non-core items
Core profit is the key measure of Man Group’s performance as driven by our core operations and cash flows. Core profit flows directly into core
EPS (see page 187), which is a KPI (page 22).
The reconciliation of statutory profit before tax to core profit is shown below.
Note to the
Group financial
statements
2021
$m
2020
$m
Statutory profit before tax 590 179
Non-core items:
A
cquisition and disposal related:
Unwind of contingent consideration discount 9
– 2
Revaluation of contingent consideration 15
(2) (22)
Amortisation of acquired intangible assets 19
61 63
Impairment of GPM goodwill 19
– 55
Share of post-tax loss of associate 23
2 –
Impairment of right-of-use lease assets – investment property 18
3 25
Lease surrender income relating to future periods 18
7 (7)
Unrealised foreign exchange (gain)/loss on lease liabilities, pension and associated deferred tax
(3) 6
Recycling of FX revaluation on liquidation of subsidiaries 16
– (17)
Non-core items
68 105
Reclassification of amounts relating to consolidated fund entities to within core gains on investments:
Net gains on investments 14.2
(32) (53)
Management fee expenses 14.2
3 2
Performance fee expenses 14.2
2 2
Other costs 14.2
4 5
Third-party share of gains relating to interest in consolidated funds 14.2
3 17
Reclassification to core gains on investments (gains attributable to net investment held by Man Group) 14.2
20 27
– –
Core profit before tax
658 284
Core tax expense (see page 187) (101) (44)
Core profit 557 240
Non-core items are included within various lines in the Group income statement. Further details on non-core items are included within the related
notes to the Group financial statements as outlined above, and the underlying core results measures within this are explained further on the
following pages.
Financial statements
Man Group plc | Annual Report 2021
184
Alternative performance measures continued
Core measures: reconciliation to statutory equivalents
The statutory line items within the Group income statement can be reconciled to their core equivalents as follows:
2021
$m
Per Group income
statement
Reclassification of
amounts relating to
consolidated fund
entities Non-core items
Core
equivalent
Management and other fees
[APM]
914 3 – 917
Distribution costs (40) – – (40)
Net management fee revenue
[APM]
874 3 – 877
Performance fees
[APM]
567 2 – 569
Income or gains on investments and other financial instruments
[APM]
42 (12) (3) 27
Third-party share of gains relating to interests in consolidated funds
(3) 3 – –
Sub-lease rental and lease surrender income
[APM]
6 – 7 13
Net revenue
[APM]
1,486 (4) 4 1,486
A
sset servicing costs (58) – – (58)
Compensation
(596) – – (596)
Other costs
[APM]
(165) 4 – (161)
Net finance expense
[APM]
(13) – – (13)
Revaluation of contingent consideration
2 – (2) –
Impairment of right-of-use lease asset – investment property
(3) – 3 –
A
mortisation of acquired intangible assets (61) – 61 –
Share of post-tax loss of associate
(2) – 2 –
Profit before tax
[APM]
590 – 68 658
Tax expense
[APM]
(103) – 2 (101)
Profit
[APM]
487 – 70 557
2020
$m
Per Group income
statement
Reclassification of
amounts relating to
consolidated fund
entities Non-core items
Core
equivalent
Management and other fees
[APM]
762 2 – 764
Distribution costs (34) – – (34)
Net management fee revenue
[APM]
728 2 – 730
Performance fees
[APM]
177 2 – 179
Income or gains on investments and other financial instruments
[APM]
40 (26) 6 20
Third-party share of gains relating to interests in consolidated funds (17) 17 – –
Sub-lease rental and lease surrender income
[APM]
25 – (7) 18
Net revenue
[APM]
953 (5) (1) 947
A
sset servicing costs (55) – – (55)
Compensation (451) – – (451)
Other costs
[APM]
(150) 5 – (145)
Net finance expense
[APM]
(14) – 2 (12)
Impairment of GPM goodwill (55) – 55 –
Revaluation of contingent consideration 22 – (22) –
Impairment of right-of-use lease asset – investment property (25) – 25 –
A
mortisation of acquired intangible assets (63) – 63 –
Recycling of FX revaluation on liquidation of subsidiaries 17 – (17) –
Profit before tax
[APM]
179 – 105 284
Tax expense
[APM]
(41) – (3) (44)
Profit
[APM]
138 – 102 240
Note:
[APM] The core equivalents of these statutory measures are defined as Alternative Performance Measures.
Core costs comprise asset servicing, compensation costs and core other costs.
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
185
Core measures: reconciliation to statutory equivalents continued
The statutory line items within the Group balance sheet can be reconciled to their core equivalents as follows:
2021
$m
Per Group
balance sheet
Reclassification of
amounts relating to
consolidated fund
entities (Note 14.2)
Core
equivalent
A
ssets
Cash and cash equivalents
[APM]
387 (64) 323
Fee and other receivables
[APM]
485 (5) 480
Investments in fund products and other investments
[APM]
974 (204) 770
Leasehold improvements and equipment
43 – 43
Leasehold property – right-of-use lease assets
61 – 61
Investment property – right-of-use lease assets
77 – 77
Goodwill and acquired intangibles
678 – 678
Other intangibles
45 – 45
Deferred tax assets
128 – 128
Investment in associate
18 – 18
Pension asset
27 – 27
Total assets
2,923 (273) 2,650
Liabilities
Trade and other payables
[APM]
702 (19) 683
Provisions
14 – 14
Current tax liabilities
15 – 15
Third-party interest in consolidated funds
254 (254) –
Lease liability
250 – 250
Deferred tax liabilities
37 – 37
Total liabilities
1,272 (273) 999
Net assets 1,651 – 1,651
2020
$m
Per Group
balance sheet
Reclassification of
amounts relating to
consolidated fund
entities (Note 14.2)
Core
equivalent
A
ssets
Cash and cash equivalents
[APM]
351 (62) 289
Fee and other receivables
[APM]
386 (4) 382
Investments in fund products and other investments
[APM]
787 (180) 607
Leasehold improvements and equipment 30 – 30
Leasehold property – right-of-use lease assets 74 – 74
Investment property – right-of-use lease assets 78 – 78
Goodwill and acquired intangibles 742 – 742
Other intangibles 39 – 39
Deferred tax assets 119 – 119
Investment in associate – – –
Pension asset 2 – 2
Total assets 2,608 (246) 2,362
Liabilities
Trade and other payables
[APM]
574 (27) 547
Provisions 9 – 9
Current tax liabilities 12 – 12
Third-party interest in consolidated funds 219 (219) –
Lease liability 272 – 272
Deferred tax liabilities 25 – 25
Total liabilities 1,111 (246) 865
Net assets 1,497 – 1,497
Note:
[APM] The core equivalents of these statutory measures are defined as Alternative Performance Measures.
Financial statements
Man Group plc | Annual Report 2021
186
Alternative performance measures continued
Core management fee and core performance fee profit
Core profit comprises both core management fee profit, a steadier earnings stream, and core performance fee profit, the more variable earnings
stream. This split therefore facilitates analysis of our profitability drivers.
2021
$m
Per Group
income statement
Reclassification of
amounts relating
to consolidated
fund entities
Non-core items
Core
equivalent
Net management fee revenue 874 3 – 877
Sub-lease rental and lease surrender income 6 – 7 13
A
sset servicing costs (58) – – (58)
Compensation (management fee)
(393) – – (393)
Other costs
(165) 4 – (161)
Net finance expense (management fee)
(12) – – (12)
Management fee profit before tax
252 7 7 266
Tax expense (39)
Management fee profit
227
Performance fees 567 2 – 569
Income or gains on investments and other financial instruments
42 (12) (3) 27
Compensation (performance fee)
(203) – – (203)
Net finance expense (performance fee)
(1) – – (1)
Performance fee profit before tax
405 (10) (3) 392
Tax expense (62)
Performance fee profit 330
2020
$m
Per Group
income statement
Reclassification of
amounts relating
to consolidated
fund entities
Non-core items
Core
equivalent
Net management fee revenue 728 2 – 730
Sub-lease rental and lease surrender income 25 – (7) 18
A
sset servicing costs (55) – – (55)
Compensation (management fee) (357) – – (357)
Other costs (150) 5 – (145)
Net finance expense (management fee) (13) – 2 (11)
Management fee profit before tax 178 7 (5) 180
Tax expense (27)
Management fee profit 153
Performance fees 177 2 – 179
Income or gains on investments and other financial instruments 40 (26) 6 20
Compensation (performance fee) (94) – – (94)
Net finance expense (performance fee) (1) – – (1)
Performance fee profit before tax 122 (24) 6 104
Tax expense (17)
Performance fee profit 87
Core gains on investments
We use the measure core gains on investments to better represent the net return we receive on our seed book portfolio. This is defined as income
or gains on investments and other financial instruments less unrealised foreign exchange movements on lease liabilities, pension and associated
deferred tax (a non-core item per page 183), and after reclassifying the grossed-up amounts relating to consolidated fund entities into this line.
Core gains on investments is made up as follows:
2021
$m
2020
$m
Net gains on seeding investments portfolio (see Note 14.1) 24 21
Net gains/(losses) on fund investments held for deferred compensation and other investments (Note 14.1) 3 (1)
Core gains on investments
27 20
Non-core items:
Consolidated fund entities: gross-up of net gains on investments (Note 14.2)
12 26
Unrealised foreign exchange gain/(loss) on lease liabilities, pension and associated deferred tax (Note 16)
3 (6)
Income or gains on investments and other financial instruments
42 40
Strategic report | Governance | Financial statements | Shareholder information
Man Group plc | Annual Report 2021
187
Core tax rate
The core tax rate is the effective tax rate on core profit before tax and is equal to the tax on core profit divided by core profit before tax. The tax
expense on core profit before tax is calculated by excluding the tax benefit/expense related to non-core items from the statutory tax expense,
together with amounts relating to the utilisation or recognition of available US deferred tax assets (Note 21). Therefore, tax on core profit best reflects
our cash taxes payable.
The impact of non-core items on our tax expense is outlined below:
Note to the
Group financial
statements
2021
$m
2020
$m
Statutory tax expense 103 41
Tax on non-core items:
Amortisation of acquired intangible assets
7 6
Impairment of right-of-use lease asset – investment property
1 4
Unrealised foreign exchange movements on lease liabilities, pension and associated deferred tax
– 1
Non-core tax item on US deferred tax assets 21
(10) (8)
Non-core tax items
(2) 3
Core tax expense 101 44
Which comprises:
Tax expense on core management fee profit before tax 39 27
Tax expense on performance fee profit before tax
62 17
The core tax rate is 15% for 2021 (2020: 16%), which has decreased largely due to a lower weighting of profits in the UK where the applicable
statutory tax rate is 19%. The non-core tax item on US deferred tax assets comprises the partial recognition of US deferred tax assets in the year
of $2 million (2020: derecognition of $14 million) offset by the consumption of $12 million (2020: generation of $6 million) as set out in Note 21.
Core EPS and core management fee EPS
Core earnings per share (EPS) is calculated as core profit divided by the weighted average diluted number of shares. Core management fee EPS
is calculated as core management fee profit divided by the weighted average diluted number of shares (page 176).
The reconciliation from statutory EPS measures (Note 27) to core EPS measures is provided below:
2021 2020
Profits
$m
Diluted
EPS
¢
Profits
$m
Diluted
EPS
¢
Statutory profit after tax 487 33.8 138 9.3
Non-core items (excluding tax) 68 4.7 105 7.1
Non-core tax items
2 0.2 (3) (0.2)
Core profit
557 38.7 240 16.2
Less core performance fee profit (330) (23.0) (87) (5.9)
Core management fee profit
227 15.7 153 10.3
Core cash flows from operations excluding working capital movements
Cash flows from operating activities excluding working capital movements can be reconciled to cash flows from operating activities as reported
in the Group cash flow statement as follows:
2021
$m
2020
$m
Cash flows from operating activities 484 392
A
dd back changes in working capital
Change in receivables
102 (50)
Change in other financial assets
163 (31)
Change in payables
(49) 30
Core cash flows from operations excluding working capital movements
700 341
Net financial assets
Net financial assets is considered a proxy for Group capital, and is equal to our cash and seed book less borrowings, contingent consideration
payable and payables under repo arrangements, as follows:
Note to the
Group financial
statements
2021
$m
2020
$m
Seeding investment portfolio 14 648 485
A
vailable cash and cash equivalents
1
11 323 289
Payables under repo arrangements 13
(64) (56)
Contingent consideration payable 15
– (2)
Net financial assets
907 716
Note:
1 Available cash and cash equivalents excludes $64 million (2020: $62 million) of cash relating to consolidated fund entities (see Note 14.2 to the Group financial statements).
188
Shareholder information
Man Group plc | Annual Report 2021
Shareholder information
In this section we have provided some key
information to assist you in managing your
shareholding in Man Group. If you have a
question that is not answered below, please
contact us at: shareholder@man.com
Man Group (www.man.com)
The Man Group 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 Group
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 contains information on dividends and shareholder
meeting details as well as useful Frequently Asked Questions.
EQ Shareview (www.shareview.co.uk/shareholders)
Man Group’s register of shareholders is maintained by EQ, 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 EQ Shareview website. To do this you will need
your Shareholder Reference, which can be found on your share
certificate or dividend confirmation.
Dividends
Final dividend for the year ended 31 December 2021
8.4¢ per share
The directors have recommended a final dividend of 8.4¢ per share
in respect of the year ended 31 December 2021. Payment of this
dividend is subject to approval at the 2022 Annual General Meeting
(AGM). Key dates relating to this dividend are given below:
Ex-dividend date 7 April 2022
Record date 8 April 2022
DRIP election date 28 April 2022
AGM (to approve final dividend) 6 May 2022
Sterling conversion date 6 May 2022
Payment date 20 May 2022
CREST accounts credited with DRIP shares 25 May 2022
DRIP share certificates received 31 May 2022
Dividend policy
Man Group’s ordinary dividend policy is progressive, taking into
account the growth in Man Group’s overall earnings. In addition,
theGroup expects to generate significant capital over time. Available
capital, after taking into account our required capital and potential
strategic opportunities, will be distributed to shareholders over time
through higher dividend payments and/or share repurchases.
The Company is currently undertaking a share repurchase
programme pursuant to which up to a maximum of $250 million
isbeing returned to shareholders. Details of the number of shares
repurchased during 2021 can be found in Note 27 of the financial
statements.
The Group will fix the dividend currency conversion rate on 6 May
2022. The achieved sterling rate will be announced at this time, in
advance of the payment date.
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 website. Alternatively, dividend mandate forms are available
from the EQ Shareview website. If you have any queries please
contact EQ on 0371 384 2112 (+44 121 415 7592 if calling from
outside the UK), who will be able to assist.
2. Overseas payment service
2
: If you live overseas, EQ offers an
overseas payment service which is available in certain countries.
This may make it possible to receive dividends directly into your
bank account in your local currency. Further information can
befound on the EQ Shareview website or via the EQ helpline
0371384 2112 (+44 121 415 7592 if calling from outside the UK).
3. Dividend Reinvestment Plan (DRIP): The Company is
pleasedto offer a DRIP, which gives shareholders the opportunity
to build their shareholding in the Company 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 Group website. Simply complete
theDRIP mandate form and return it to EQ. Should you have any
questions regarding the DRIP, or to request a paper mandate
form, please contact EQ on 0371 384 2112
1
(+44 121 415 7592
ifcalling from outside the UK). 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 2021, EQ must have received
your instruction by 5.00pm on 28 April 2022. Instructions received
after this date will be applied to the next dividend payment.
Dividend history
To help shareholders with their tax affairs, details of dividends paid
inthe 2021/22 tax year can be found adjacent. 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 website, which can be found under
Investor Relations.
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.
189
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Man Group plc | Annual Report 2021
Dividends paid in the 2021/22 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 2021 0/29 3/9/21 4.06 5/8/21 6/8/21 217. 8 57 3/9/21
Final dividend for the year ended 31 Dec 2020 0/28 21/5/21 4.1 8/4/21 9/4/21 175.0289 25/5/21
Shareholder communications
Annual Report and Half Year Results
Man Group publishes an Annual Report and Half Year Results every
year. TheAnnual Report is published on the website and is sent to
shareholders through the post if they have requested to receive a copy.
The Half Year Results are published on the website and printed copies
are available on request from the Company Secretary.
E-communications
You can help Man Group to reduce its carbon footprint as well as its
printing and postage costs 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 EQ Shareview website.
Youwill need your Shareholder Reference, which can be found on
your share certificate or dividend confirmation or proxy card, in order
toregister. 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 Group website.
Managing your shareholding
Online, by post, or by phone
Many aspects of your shareholding can be managed by registering on
the EQ Shareview website. For enquiries about your shareholding you
can also contact EQ in writing at EQ, Aspect House, Spencer Road,
Lancing, West Sussex BN99 6DA, or by telephone on 0371 384 2112
(+44 121 415 7592 if calling from outside the UK), quoting Ref No 874.
Please quote your Shareholder Reference when contacting EQ.
Share dealing service
EQ 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 EQ Shareview website (www.shareview.co.uk/dealing).
To use EQ’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.
Be a ScamSmart investor – avoid investment
andpension scams
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 unsolicited advice, offers to buy shares at a
discount, or offers of free reports about the Company. 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Group encourages its shareholders to read the information
onthe site which can be accessed at www.fca.org.uk/scamsmart.
You can also call the FCA Consumer Helpline on 0800 111 6768.
This Annual Report has been prepared for, and only for, the members of the Company, as a
body, and no other persons. The Company, its directors, employees, agents or advisers do not
accept or assume responsibility to any other person to whom this document is shown or into
whose hands it may come and any such responsibility or liability is expressly disclaimed. By their
nature, the statements concerning the risks and uncertainties facing the Group in this Annual
Report involve uncertainty since future events and circumstances can cause results and
developments to differ materially from those anticipated. The forward-looking statements reflect
knowledge and information available at the date of preparation of this Annual Report and the
Company undertakes no obligation to update these forward-looking statements. Nothing in
thisAnnual Report should be construed as a profit forecast.
How your details are protected from cybercrime
Man Group takes the protection of its shareholders’
personaldatafrom the ever-increasing threat of cybercrime very
seriously. Shareholder details are maintained by EQ, our Registrars,
who safeguard this information to the highest standards. EQ’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
22 Grenville Street
St Helier
Jersey JE4 8PX
Telephone: + 44 (0) 20 7144 1000
Website: www.man.com
Registered in Jersey with registered no: 127570
London office
Riverbank House
2 Swan Lane
London EC4R 3AD
United Kingdom
Telephone: +44 (0) 20 7144 1000
Investor relations
investor.relations@man.com
Director, Investor Relations – Karan Shirgaokar
Company secretariat
shareholder@man.com
Company Secretary – Elizabeth Woods
Communications
media@man.com
Head of Communications – Georgiana Brunner
Company advisers
Independent auditor
Deloitte LLP
Corporate brokers
Credit Suisse
J.P. Morgan Cazenove
Corporate communications
FTI Consulting
Registrars
EQ
Shareholder information continued
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Shareholder information
Man Group plc | Annual Report 2021
Glossary
Absolute investment performance
Percentage rise/fall in the value of the fund over
the stated period
Absolute return
Alternative strategies where clients expect the
strategy may have net long, short or neutral
exposure to asset classes, and that may make
use of leverage to achieve those exposures.
Thisincludes trend following and discretionary
long/short strategies
Actively managed
The management of assets based on active
decision-making as opposed to aiming to
replicate an index
AGM
Annual General Meeting
Alpha
Excess return over beta relative to a market
benchmark, or a measure of the ‘value add’
byan investment manager
Alternative
An alternative investment is an asset that is not
one of the conventional investment types, such
as stocks, bonds and cash
Assets under management (AUM)
AUM are the assets that Man Group manages
forinvestors in investment vehicles (including
fund entities and separately managed accounts)
and is a key indicator of our performance as an
investment management group and our ability
toremain competitive and build a sustainable
business. Average AUM multiplied by our net
management fee margin equates to our
management fee earning capacity. AUM is
shown by strategy groupings that have similar
characteristics. AUM includes advisory-only
assets where Man Group provides model
portfolios but does not have decision making
ortrading authority over the assets and
dedicated managed account platform services
for which Man Group provides platform and risk
management services but does not provide
investment management services
Movements in AUM are split between the
following categories:
Net inflows/outflows
Net inflows/outflows are a measure of Man
Group’s ability to attract and retain investor
capital. Net flows are calculated as sales less
redemptions
Investment performance
Investment performance is a measure of the
performance of the investment vehicles Man
Group manages for its investors
FX and other movements
Some of Man Group’s AUM is denominated
incurrencies other than USD. FX movements
represent the impact of translating non-USD
denominated AUM into USD. Other movements
principally relate to maturities and leverage
movements
ARCom
Audit and Risk Committee
Basis point (bps)
One one-hundredth of a percentage point
(0.01%)
Benchmark
A standard against which the performance of
asecurity, mutual fund or investment manager
can be measured; generally broad market and
market-segment stock and bond indexes are
used for this purpose
Beta
Market returns
Carbon dioxide equivalent (CO
2
e)
A standard unit for measuring carbon footprints.
Enabling the impact of different greenhouse gas
emissions to be expressed using an equivalent
amount of carbon dioxide (CO
2
) as reference.
Wecalculate total emissions using tonnes per
CO
2
e or tCO
2
e
Cash costs
Costs excluding depreciation and amortisation
CLO
Collateralised loan obligations are a security
backed by a pool of debt, often corporate loans
Compensation ratio
The compensation ratio is calculated as total
compensation costs divided by net revenue
CSR
Corporate Social Responsibility
DE&I
Diversity, Equity and Inclusion
Defined benefit (DB) pension scheme
A pension benefit where the employer has an
obligation to provide participating employees
withpension payments that represent a specified
percentage of their salary for each year of service
Defined contribution (DC) pension scheme
A pension benefit where the employer’s
contribution to an employee’s pension is
measured as, and limited to, a specified amount,
usually a percentage of salary
Discretionary
Discretionary investment management is a
formof investment management in which
buyand sell decisions are made by a portfolio
manager. The term ‘discretionary’ refers to the
fact that investment decisions are made at the
portfolio manager’s discretion
Drive
Drive is our global internal diversity and inclusion
network which is designed to inform, support
and inspire our people. The network’s mission is
to advance Man Group’s efforts in promoting and
valuing diversity and inclusion throughout the firm
Employee benefit trust
An employee benefit trust is a type of
discretionary trust established to hold cash
orother assets for the benefit of employees,
suchas satisfying share awards, with a view
tofacilitating the attraction, retention and
motivation of employees
Employee Trust
The Employee Trust is the employee benefit trust
operated by Man Group
ESG
Environmental, Social and Governance
Executive Committee
Committee of executives considered to be
thefirm’s key management, who have authority
and responsibility for planning, directing and
controlling activities at Man Group
External audit
An external auditor performs an audit, in
accordance with specific laws or rules, of the
financial statements of an organisation and
isindependent of the entity being audited
FCA
Financial Conduct Authority
FRC
Financial Reporting Council
GDPR
The General Data Protection Regulation
Global Sustainable
Investment Alliance (GSIA)
The Global Sustainable Investment Alliance
High water mark
The value above which performance-fee-eligible
AUM accrues performance fees
HMRC
Her Majesty’s Revenue and Customs
ICAAP
Internal Capital Adequacy and Assessment
Process
ICARA
Internal Capital and Risk Assessment
IFRS
International Financial Reporting Standards
Internal audit
Provide independent assurance that an
organisation’s risk management, governance
andinternal control processes are operating
effectively
Investment returns
The increase in AUM attributable to investment
performance, market movements and foreign
exchange
KPI
Key Performance Indicator
Long-only
Long-only refers to a policy of only holding ‘long’
positions in assets and securities
Machine learning
A process in which a range of applied algorithms
recognise repeatable patterns and relationships
within observed data
Man Group
Man Group plc, through its investment
management subsidiaries and partnerships
(collectively, ‘Man Group’), is a global investment
management business and provides a range
offund products and investment management
services for investors globally
MiFID II
The second iteration of the Markets in Financial
Instruments Directive
Multi-manager solutions
Multi-manager solutions includes traditional fund
of funds and managed accounts investing in
vehicles managed by asset managers other
thanMan Group
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Man Group plc | Annual Report 2021
Net Asset Value or NAV
Net Asset Value or NAV is the sum total of the
market value of all the investment instruments
held in the portfolio including cash, less any
liabilities held in the portfolio. NAV per share is
found by dividing the total number of units
outstanding from the NAV
Net management fee margin
Margins are an indication of the management fee
revenue margins negotiated with Man Groups
clients net of any distribution costs paid to
intermediaries. Net management fee margin is
calculated as core net management fee revenue
divided by AUM
Passive products
Products which are intended to replicate an index
QFII
Qualified Foreign Institutional Investor
Quantitative or quant
Quantitative strategies use computer models to
make trading decisions. A quant is a person who
specialises in the application of mathematical
andstatistical methods to financial and risk
management problems
Regulatory capital
Regulatory capital is the amount of risk capital
set by legislation or local regulators, which
companies must hold against any difficulties
such as market or credit risks
RI
Responsible Investment
Relative investment performance
Percentage rise/fall in the value of the fund over
the stated period relative to peers or benchmarks
Revolving credit facility (RCF)
A line of credit, to an agreed limit, that businesses
can access when needed
Run rate net management fee revenue
andmargin
Run rate net management fee margin is
calculated as core net management fee revenue
for the last quarter divided by the average AUM
for the last quarter on a fund-by-fund basis. Run
rate net management fee revenue is calculated
as the run rate net management fee margin
applied to the closing AUM as at the period end.
These measures give the most up-to-date
indication of our management fee revenue
atagiven date
Sale and repurchase agreement
A sale and repurchase agreement (repo) is a
short-term borrowing arrangement under which
Man Group sells certain of its fund product
investments to a third party, with a commitment
to repurchase them on a prearranged future date
for consideration of the sale proceeds received
plus interest
Scope 1, 2 and 3 emissions
The greenhouse gas (GHG) Protocol Corporate
Standard classifies a company’s greenhouse gas
emissions into three ‘scopes’. Scope 1 emissions
are direct emissions from owned or controlled
sources. Scope 2 emissions are indirect
emissions from the generation of purchased
energy including electricity, steam, heating and
cooling. Scope 3 emissions include all other
indirect emissions that occur within a company’s
value chain
Seed capital
Seed capital is an investment in a fund allowing
itto develop a performance track record or
allowing it to be marketed to potential clients.
Seed capital also include CLO risk retention
positions and fund products to which Man Group
obtains exposure via sale and repurchase
arrangements or TRSs
Senior Executive Committee (Senior ExCo)
Committee of executives within Man Group that
work together to advise the CEO and are in
charge of specific aspects of the Group
SFDR
Sustainable Finance Disclosure Regulation
SMCR
Senior Managers Certification Regime. New FCA
regulation which aims to strengthen market
integrity by making senior individuals more
accountable for their conduct and competence
Systematic
Systematic investment managers attempt to
remove the behavioural component of investing
by using computer algorithms to make
investment decisions
TCFD
Task Force on Climate-related Financial
Disclosures
Total return
Alternative strategies where clients expect the
strategy to have some positive exposure to
particular risk factors over the course of a market
cycle although the level of exposure may vary
over time. This includes GLG Global Emerging
Markets Debt Total Return, Man GPM, risk
premia, and CLO strategies
Total return swap or TRS
A total return swap is a swap agreement in which
Man Group receives the return on an underlying
fund investment in exchange for an interest
payment on the notional investment
Trade execution
The completion of a buy or sell order on
asecurity in the market
TSR
Total shareholder return
UN PRI
The United Nations-supported Principles for
Responsible Investment initiative is an
international network of investors working
together to implement the six Principles for
Responsible Investment. Its goal is to understand
the implications of sustainability for investors and
support signatories to incorporate these issues
or implications into their investment decision-
making and ownership practices
Weighted average carbon intensity (WACI)
The measurement of a portfolio’s exposure to
carbon-intensive companies, expressed in tons
of CO
2
e per million dollars of revenue
Glossary continued
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Man Group plc | Annual Report 2021
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Man Group plc Annual Report 2021
Man Group plc
Riverbank House
2 Swan Lane
London EC4R 3AD
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