Man Group forecasts era of uncertainty for Q2

London – Man Group PLC, a global investment firm, has issued a cautious outlook for the second quarter of 2026, citing persistent global uncertainty. The firm expects continued volatility across asset classes and individual securities, driven by geopolitical tensions, evolving monetary policies, and rapid technological advancements, particularly in artificial intelligence (AI).

In response to these conditions, Man Group has adjusted its strategic view on several of its strategies. The firm has downgraded its recommendation for Long-Biased Equity Long/Short strategies to neutral. Merger Arbitrage strategies have also been moved to neutral due to tightening credit spreads. Furthermore, Structured Credit has been downgraded to negative, reflecting concerns over weakness in private credit markets and the potential for contagion.

The firm highlights that the current geopolitical landscape, including events in the Middle East, coupled with the disruptive potential and pricing challenges of AI, increases the risk of market shocks and shifts in leadership. Man Group believes that active investment strategies are better positioned to navigate this complex environment than passive approaches, which may be slower to adapt to new market paradigms.

Despite the cautionary outlook, Man Group suggests that themes related to AI and geopolitical developments may also present opportunities. The firm will be closely monitoring the long-term implications of technological advancements on employment and corporate productivity, as well as potential governmental responses through regulation and policy.

While Man Group's strategies generally performed positively in the previous quarter, the firm acknowledges challenges arising from geopolitical events and the repricing of AI-related assets. The current environment is expected to remain broadly supportive for alpha generation heading into the second quarter, notwithstanding the anticipated volatility.