The sharp variation of performance fee income at UK-listed hedge fund manager Man Group, which this morning reported a 92% drop in gross performance fees this year compared with 2009, illustrates why its directors have taken the step of halving the company's dividend.

Man Group's financial statements show that its gross performance fee income fell from $627m in the financial year ended March 2009 to $52m in the financial year to March 2010. Most of its performance fees, more than 90%, come from its computer-driven hedge fund AHL, which was down 7.7% over the last financial year.