A month ago, Man Group, the world’s second largest hedge fund manager by assets, gave some indication of just how bad the third quarter would be for asset managers.

Market turmoil in September had precipitated a hefty bout of redemptions at the firm from panicked investors. It was a trend that was to be repeated across the sector.

In fact, although the warning caused a 24 per cent drop in Man’s share price, the group’s 8.6 per cent fall in assets under management to $64bn, confirmed on Thursday , would turn out to be moderate compared to losses suffered by peers.

This week, Henderson reported a 12 per cent drop in assets under management to £65.4bn in the three months to the end of September.

Andrew Formica, Henderson’s chief executive, said: “Markets were extremely challenging over the period...equity prices fell sharply as investors lowered their risk appetite and switched into cash...We therefore anticipate uncertain and volatile market conditions for at least the remainder of this year”.

Last month, F&C said total funds under management had dipped 4.6 per cent to £103.2bn in the three months to September 30 on the back of net outflows of £900m.

Emerging market specialists have not been immune to the drop in investor confidence. Funds managed by Ashmore, the emerging markets specialist, dropped a tenth in the three months to the end of September to $58.9bn.

Ashmore put the declines down to volatility and sliding emerging currency and equity markets as investors turned to haven assets.

As Peter Clarke, chief executive of Man, said on Thursday: “it is not just is an industry phenomena.”

The focus, says Mr Clarke, has been on declines in funds under management.

By that metric, September’s child has indeed been full of woe for the asset management industry.

According to the European Fund and Asset Management Association, in August alone European funds experienced the highest level of net outflows since October 2008, with net withdrawals from equity funds hitting a record of €26bn, compared to net outflows of €1bn the month before. September’s numbers are likely to be even worse.

In the UK, net retail sales in the third quarter were at their worst levels since 2008, according to Dick Saunders of the Investment Management Association.

UK Institutional investors took a total of £175m out of equity funds in September, according to Mr Saunders: it is only the second time since February 2009 that the industry has suffered a net outflow.

Fund managers say the turmoil in equity markets has been exacerbated as investors have used the market to extract cash to tide themselves over while other less liquid markets - such as property and emerging market credit - have seized up.

And while some stocks have rallied a little since the low of the market in September, the outlook remains bleak.

For most asset managers, falls in funds under management have been having an all-too-apparent impact on valuations. Man Group’s share price has fallen nearly 40 per cent in the space of a month: from 239p at the end of September - when most analysts thought it undervalued - to 145p on Thursday.

Even BlackRock, the world’s biggest listed asset manager by assets under management has been hit.

This week Barclays told the market it had made a £1.8bn impairment charge to reflect the fall in the value of its 20 per cent stake in BlackRock.

Through September BlackRock’s shares had fallen back to $140, a level not seen since Barclays agreed to sell its asset management arm to BlackRock in June 2009. The shares were in Barclays’ books at $227, the level at which they traded in December 2009 when the deal completed, but the bank made clear this week that it didn’t think BlackRock’s shares would get back to that level. They are now trading at $159.

Few bosses of asset managers admit to feeling anything but trepidation in the light of the eurozone crisis, knowing how geared their businesses are to markets. Any fall in assets under management feeds straight through to profits.

When last month Aberdeen Asset Management announced its funds had dipped £9bn to £177bn in the previous 10 months, Martin Gilbert, chief executive, said that a 0.5 per cent drop in assets under management would cut £4m off the group’s bottom line.

Some, of course, are better placed to weather the turmoil.

While asset managers like F&C and Aberdeen have been working hard to pay off debts, others are better placed.

In spite of its dire share price performance, Man, for example, is all but debt free. So much so that the company’s board could think of no better bargain than buying back its own shares.

The $150m repurchase programme, announced on Thursday morning, has already started and will be completed by the end of the year. Even when finished, Man will still be sitting on a $600m cash pile above the safety buffer demanded by the UK regulator.

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