British hedge fund Man Group assets rise 35 pct in 2017

* Adds $12.8 bln in assets during 2017

* Sees (Shanghai: 600481.SS - news) strong demand for EM debt, fund of funds

* Adjusted pretax profit $384 mln, up from $205 mln in 2016 (Adds share rise, further detail)

By Maiya Keidan

LONDON, Feb 28 (Reuters) - British hedge fund company Man (Swiss: MAN.SW - news) Group on Wednesday said funds under management rose 35 percent to $109.1 billion in 2017, buoyed by net inflows of client money as well as market and currency gains.

Man Group (LSE: EMG.L - news) said strong client demand for emerging market debt, managed accounts in its fund of funds business FRM, and computer-driven strategies, combined with FX movements and the January 2017 acquisition of Aaalto, helped add $12.8 billion to the funds under management.

"2017 was a strong year for our business," Luke Ellis, Man CEO said in a statement. "In common with others, the recent moves in markets have impacted our investment performance in some areas, particularly for our momentum strategies."

Man's shares were initially up more than 2.0 percent, but they retreated and were more than 2 percent lower by 0839 GMT.

The fall in the shares was likely to be due to traders taking into account more recent falls in Man's computer-driven AHL business, said one analyst speaking on background to Reuters

Hedge fund industry data compiled by HSBC showed that Man's AHL Dimension and AHL Diversified were down 7.91 percent and 7.1 percent respectively between the beginning of 2018 and Feb. 9.

For 2017, Man said AHL made returns ranging from 3.9 percent to 17.9 percent as its assets rose to $24 billion at Dec (Shanghai: 600875.SS - news) . 31, from $18.7 billion in the year-ago period.

"Man has a strong product shelf that continues to generate material new client demand... and indeed management commentary points towards an ongoing healthy pipeline," a note from analysts at Credit Suisse (IOB: 0QP5.IL - news) said.

Profits before tax, adjusted for restructuring costs and litigation provisions, were $384 million in 2017, up 87 percent from $205 million in the prior year.

Net (LSE: 0LN0.L - news) management fee revenue rose by 7 percent to $736 million for the year, from $691 million in 2016, partially offset by compressed margins.

Man Group said it expected ongoing costs associated with the European Union's MiFID II regulation to add around $10-$15 million in costs from 2018 onwards. (Reporting by Maiya Keidan; editing by Simon Jessop and Jane Merriman)