28th Feb 2020 10:34
(Alliance News) - Jupiter Fund Management PLC on Friday reported flat assets under management in 2019 and decided to forego its special dividend due to its proposed Merian Global Investors acquisition.
Shares in the FTSE 250-listed fund manager were down 7.0% in London on Friday morning at 303.60 pence each.
At the end of 2019, Jupiter's assets under management stood at GBP42.8 billion, marginally higher than GBP42.7 billion at the end of 2018.
By product, Jupiter's Mutual funds added 1.9% over 2019 to GBP37.6 billion, with Segregated Mandates growing 4.3% to GBP4.8 billion, but this was offset by Investment funds falling by two thirds to GBP400 million from GBP1.2 billion the year before.
Chief Executive Andrew Formica said Jupiter's performance was "resilient" in 2019 against a "challenging" backdrop.
The fund manager recorded GBP4.5 billion in net outflows in 2019, with Mutual funds recording GBP3.0 billion in net outflows, Investment funds losing GBP1.0 billion, and Segregates Mandates seeing GBP500 million in net outflows.
"Gross mutual fund sales in 2019 were strong, with inflows of GBP11.4 billion. While we continued to see net outflows overall, these were notably slower than in 2018," Jupiter said.
The asset manager continued: "We benefited from a return to net inflows of GBP1.6 billion for the Dynamic Bond fund, against net outflows of GBP4.1 billion in 2018. However, we saw outflows totalling GBP4.3 billion from our European Growth strategy where there was a fund manager succession. This also led to the majority of outflows from investment trusts. Segregated mandates benefited from a client transferring GBP500 million from mutual funds into a segregated mandate with us. Significant net outflows were also seen in Merlin Income, European Special Situations and Absolute Return."
Jupiter's investment performance added GBP4.6 billion to total assets.
Formica added: "It was another year of strong investment performance, with 72% of mutual fund assets under management outperforming over three years. It was pleasing to see a strong return to net inflows for our Fixed Income strategy, with the overall net outflows in 2019 being almost entirely the result of the planned departure of a key manager in our European Growth strategy.
"Our assets under management and net management fee margin remained stable year on year, although a lower average assets under management resulted in a drop in net management fees and also our profitability."
The fund manager reported a 6.5% decrease in net management fees to GBP370.0 million from GBP395.7 million in 2018.
Pretax profit slipped 16% year on year to GBP151.0 million from GBP179.2 million. Revenue was down 8.9% to GBP419.3 million, with net revenue falling 8.1% to GBP379.1 million.
Jupiter cut its total dividend by 40% to 17.1 pence in 2019 from the 28.5p distributed in 2018, but the fund manager had issued an 11.4p special dividend in 2018. Without the special dividend, Jupiter's ordinary dividend was flat year on year. Jupiter paid a special dividend of 15.5p in 2017.
Formica said: "In light of the proposed acquisition of Merian, and in line with our policy of balancing investment for long-term growth with distribution to shareholders, we have decided not to pay a special dividend in 2019. We remain committed to returning surplus capital in excess of needs to shareholders, aligned to our capital allocation framework."
In mid-February, Jupiter announced it is proposing to buy Merian Global Investors in an GBP370 million all-share deal.
By Paul McGowan; [email protected]
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