Mixed returns and heavy redemptions from clients at Man Group underscored plans to acquire rival GLG Partners, the listed hedge fund said in its full-year results released yesterday.

Pre-tax profits at Man, one of the world's largest hedge fund managers, were down 27 per cent to $541m on revenue that dropped 46 per cent to $1.35bn for the year to March 31.

Man hopes the $1.6bn takeover of GLG will diversify its business and end its reliance on the company's successful, but volatile, flagship fund AHL, its principal source of revenue.

Current funds under management stand at $39bn, down from $46.8bn in March 2009 and a peak of $68bn in September 2007.

Institutional investors have redeemed $8.6bn from Man funds over the past year. This was offset by just $1.6bn in sales. Net inflows from private investors of $2bn were offset by currency movements and losses as a result of fund underperformance.

In the 12-month period to the end of March, Man's AHL fund lost 7.7 per cent.