MADL Swings to Profit on Strong Trading Gains in Q3

TL;DR

**MADL's Q3 comeback is a relief, but the year-to-date loss and capital outflows mean it's still a risky bet for aggressive traders.**

AI Summary

MAN AHL DIVERSIFIED I LP (MADL) reported a significant turnaround in net income, reaching $6,616,104 for the three months ended September 30, 2025, compared to a net loss of $8,906,015 in the same period of 2024. This improvement was primarily driven by a substantial increase in net realized trading gains, which surged to $4,905,796 from a loss of $9,864,357 year-over-year. However, for the nine-month period, the partnership still recorded a net loss of $4,121,983, albeit an improvement from the $2,830,547 net income in the prior year, indicating a strong third quarter recovery. Total assets decreased to $62,949,614 as of September 30, 2025, from $77,729,211 at December 31, 2024, largely due to a reduction in the investment in Man-AHL Diversified Trading Company L.P. from $76,835,265 to $60,362,505. Partners' capital also declined to $59,759,232 from $76,261,491 over the same period, influenced by redemptions totaling $12,442,397 for the nine months ended September 30, 2025. Management fees and servicing fees also saw decreases, reflecting the lower Net Asset Value.

Why It Matters

This filing reveals a critical shift in MADL's performance, with a substantial net income in Q3 2025 reversing a significant loss from the prior year. For investors, this indicates potential volatility in the fund's speculative trading strategy but also a capacity for strong recovery. The decline in total assets and partners' capital, driven by redemptions, suggests some investors are pulling out, potentially due to earlier underperformance or broader market sentiment. This could impact the fund's scale and competitive positioning against larger, more stable investment vehicles, affecting its ability to generate future returns and attract new capital. Employees and customers of Man Group plc, the parent company, will be watching to see if this Q3 rebound signals a sustained positive trend.

Risk Assessment

Risk Level: high — The partnership's net income swung from a loss of $8,906,015 in Q3 2024 to a gain of $6,616,104 in Q3 2025, primarily due to volatile 'Net realized trading gains/(losses) on closed contracts/agreements and foreign currency transactions' which went from a loss of $9,864,357 to a gain of $4,905,796. This extreme fluctuation, coupled with a nine-month net loss of $4,121,983, indicates a highly speculative and inherently risky trading strategy.

Analyst Insight

Investors should exercise extreme caution and thoroughly review the underlying trading company's performance and risk management strategies. Given the high volatility and significant capital redemptions, a 'wait and see' approach is advisable to confirm sustained profitability before considering new investments.

Financial Highlights

debt To Equity

N/A

revenue

$1,876,284

operating Margin

N/A

total Assets

$62,949,614

total Debt

N/A

net Income

$6,616,104

eps

N/A

gross Margin

N/A

cash Position

N/A

revenue Growth

-43.5%

Revenue Breakdown

Key Numbers

• $6,616,104 — Net Income (For the three months ended September 30, 2025, a significant turnaround from a loss of $8,906,015 in Q3 2024.)
• $4,905,796 — Net realized trading gains (For the three months ended September 30, 2025, a substantial increase from a loss of $9,864,357 in Q3 2024.)
• $62,949,614 — Total assets (As of September 30, 2025, a decrease from $77,729,211 at December 31, 2024.)
• $59,759,232 — Total partners' capital (As of September 30, 2025, a decrease from $76,261,491 at December 31, 2024.)
• $12,442,397 — Redemptions (For the nine months ended September 30, 2025, indicating significant capital outflows.)
• $4,121,983 — Net loss (For the nine months ended September 30, 2025, compared to a net income of $2,830,547 for the same period in 2024.)
• 43.23% — Ownership percentage of Trading Company (As of September 30, 2025, a decrease from 44.95% at December 31, 2024.)
• $1,415,966 — Management fees (For the nine months ended September 30, 2025, a decrease from $1,969,812 in the prior year.)

Key Players & Entities

• MAN AHL DIVERSIFIED I LP (company) — Registrant
• Man-AHL Diversified Trading Company L.P. (company) — Feeder fund's primary investment
• Man Investments (USA) Corp. (company) — General Partner of the Partnership
• Man Group plc (company) — Parent company of the General Partner and Advisor
• AHL Partners LLP (company) — Trading advisor to the Partnership
• The Bank of New York Mellon (company) — Administrator to the Partnership
• Securities and Exchange Commission (regulator) — Regulatory body for the filing
• Commodity Futures Trading Commission (regulator) — Regulator for the Advisor
• National Futures Association (regulator) — Member organization for the Advisor
• Financial Industry Regulatory Authority, Inc. (regulator) — Member organization for MII

FAQ

Risk Factors

• Trading Performance Volatility [high — market]: The partnership experienced a significant turnaround in net income for Q3 2025, driven by a surge in net realized trading gains to $4,905,796 from a loss of $9,864,357 in Q3 2024. However, the nine-month period still shows a net loss of $4,121,983, highlighting the inherent volatility in trading strategies.
• Asset and Capital Reductions [medium — financial]: Total assets decreased by 19.0% to $62,949,614 as of September 30, 2025, from $77,729,211 at December 31, 2024. This was primarily due to a reduction in the investment in Man-AHL Diversified Trading Company L.P. Partners' capital also declined by 21.6% to $59,759,232, influenced by redemptions totaling $12,442,397 for the nine months ended September 30, 2025.
• Dependence on Trading Company [high — operational]: The partnership's primary asset is its investment in Man-AHL Diversified Trading Company L.P., which decreased from $76,835,265 to $60,362,505. The performance and operational stability of this underlying trading entity are critical to MADL's overall results.
• Decreasing Fees [low — financial]: Management fees decreased to $1,415,966 for the nine months ended September 30, 2025, from $1,969,812 in the prior year. Servicing fees also saw a reduction. This is a direct consequence of the declining Net Asset Value and capital outflows.

Industry Context

The alternative investment fund industry, particularly those employing systematic trading strategies like MAN AHL, is characterized by its reliance on sophisticated quantitative models and its sensitivity to market volatility. Performance can be highly cyclical, with periods of strong gains often followed by drawdowns. Competition is intense, with many funds vying for investor capital, and success hinges on consistent alpha generation and effective risk management.

Regulatory Implications

As a limited partnership, MADL is subject to regulatory oversight concerning its disclosures and operations. Changes in trading volumes and asset values can trigger reporting requirements. The significant shift in trading gains and losses may attract scrutiny regarding the effectiveness of risk controls and the transparency of performance reporting.

What Investors Should Do

1. Monitor trading performance closely.
2. Evaluate the impact of redemptions.
3. Assess the underlying trading company's strategy.
4. Compare NAV trends with peers.

Key Dates

• 2025-09-30: End of Third Quarter 2025 — Reported significant net income turnaround of $6,616,104, driven by trading gains, contrasting with a Q3 2024 loss.
• 2024-09-30: End of Third Quarter 2024 — Reported a net loss of $8,906,015 for the quarter, with net realized trading losses of $9,864,357.
• 2025-12-31: End of Fiscal Year 2024 — Total assets stood at $77,729,211 and total partners' capital at $76,261,491.

Glossary

Net realized trading gains

Profits or losses resulting from the sale of trading positions during a specific period. (A key driver of the partnership's quarterly performance, showing a dramatic swing from loss to significant gain in Q3 2025.)

Investment in Man-AHL Diversified Trading Company L.P.

The value of the partnership's stake in its underlying trading entity. (Represents the largest asset and a primary source of returns, its reduction impacts total assets and potential future income.)

Partners' capital

The total equity investment made by all partners in the limited partnership. (Declined due to redemptions, indicating capital outflows from the fund.)

Redemptions

The process by which partners withdraw their capital from the fund. (Significant redemptions of $12,442,397 in the first nine months of 2025 contributed to the decrease in partners' capital and total assets.)

Net Asset Value (NAV)

The per-unit market value of a partner's interest in the fund. (NAV per unit decreased for all classes, reflecting the overall decline in the partnership's value.)

Year-Over-Year Comparison

MAN AHL DIVERSIFIED I LP has shown a significant Q3 recovery, with net income turning positive at $6,616,104 compared to a $8,906,015 loss in the prior year's quarter, largely due to a $14.7 million swing in net realized trading gains. However, for the nine-month period, the partnership still reports a net loss of $4,121,983, a slight improvement from the prior year's net income of $2,830,547. Total assets and partners' capital have decreased substantially, by 19.0% and 21.6% respectively, driven by a reduced investment in the trading company and significant partner redemptions totaling $12,442,397.

Filing Documents

• ck0001052354-20250930.htm (10-Q) — 4192KB
• ck0001052354-ex31_1.htm (EX-31.1) — 13KB
• ck0001052354-ex31_2.htm (EX-31.2) — 13KB
• ck0001052354-ex32_1.htm (EX-32.1) — 8KB
• ck0001052354-ex32_2.htm (EX-32.2) — 8KB
• 0001193125-25-283300.txt ( ) — 15851KB
• ck0001052354-20250930.xsd (EX-101.SCH) — 1336KB
• ck0001052354-20250930_htm.xml (XML) — 4376KB

Financial Statements

Financial Statements 2 3 4 5

Notes to Financial Statements (unaudited)

Notes to Financial Statements (unaudited) 6 (a) At September 30, 2025 (unaudited) and December 31, 2024 (b) For the three month periods ended September 30, 2025 and 2024 (unaudited) and for the nine month periods ended September 30, 2025 and 2024 (unaudited) (c) For the nine month periods ended September 30, 2025 and 2024 (unaudited) 1 MAN-AHL DIVERSIFIED I L.P. (A Delaware Limited Partnership) September 30, 2025 (Unaudited) December 31, 2024 ASSETS Investment in Man-AHL Diversified Trading Company L.P. $ 60,362,505 $ 76,835,265 Due from Man-AHL Diversified Trading Company L.P. 2,587,109 893,946 Total assets $ 62,949,614 $ 77,729,211 LIABILITIES AND PARTNERS' CAPITAL LIABILITIES: Redemptions payable $ 2,587,109 $ 893,946 Management fees payable 154,517 191,647 Servicing fees payable 51,661 64,041 Accrued expenses and other liabilities 397,095 318,086 Total liabilities 3,190,382 1,467,720 PARTNERS' CAPITAL: General Partner - Class A Series 1 ( 186.37 units outstanding as at September 30, 2025 and December 31, 2024) 866,642 907,432 Limited Partners - Class A Series 1 ( 8,570.37 and 10,513.79 units outstanding as at September 30, 2025 and December 31, 2024, respectively) 39,852,435 51,190,365 Limited Partners - Class A Series 2 ( 357.31 and 378.07 units outstanding as at September 30, 2025 and December 31, 2024, respectively) 2,043,265 2,242,615 Limited Partners - Class B Series 1 ( 3,655.37 and 4,502.48 units outstanding as at September 30, 2025 and December 31, 2024, respectively) 16,996,890 21,921,079 Total partners' capital 59,759,232 76,261,491 Total liabilities and partners' capital $ 62,949,614 $ 77,729,211 NET ASSET VALUE PER OUTSTANDING UNIT OF PARTNERSHIP INTEREST - CLASS A Series 1 $ 4,650.03 * $ 4,868.88 * NET ASSET VALUE PER OUTSTANDING UNIT OF PARTNERSHIP INTEREST - CLASS A Ser

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