1st Mar 2019 08:52
LONDON (Alliance News) - Jupiter Fund Management PLC on Friday said large fund outflows and negative investment performance led to a fall in its assets under management.
Shares in Jupiter Fund Management were up 9.2% Friday morning at 370.00 pence each.
At the end of 2018, Jupiter's assets under management fell 15% to GBP42.7 billion compared to GBP50.2 billion at the end of 2017.
Chief Executive Maarten Slendebroek said it was a "tough year" for all asset managers, with market volatility and rising compliance and regulatory costs.
Jupiter blamed market and exchange rate movements for a negative GBP2.9 investment performance. It recorded net outflows of GBP4.6 billion in 2018 compared to GBP5.5 billion net inflows in 2017.
The fund manager recorded inflows of GBP11.9 billion in 2018 but this was offset by redemptions from the company's Dynamic Bond fund. The Dynamic Bond fund was the biggest contributor to Jupiter's net inflows in 2018.
Jupiter said the swing to outflows was the result of "short-term performance allied to an industry-wide withdrawal from global fixed income products".
Jupiter's 2018 dividend is 13% lower at 28.5 pence each from the 32.6p distributed in 2017. The company's dividend policy sees it pay out 50% of its underlying earnings - equal to 17.1p per share - but paid a 11.4p special dividend in 2018. Jupiter paid a special dividend of 15.5p in 2017.
The fund manager reported a slight rise in annual net management fees to GBP395.7 million from GBP392.4 million in 2017.
Jupiter reported a 7.1% decrease in pretax profit to GBP179.2 million from GBP192.9 million the year before. Revenue was flat at GBP460.5 million.
Jupiter's administrative expenses increased 4.8% to GBP225.1 million from GBP214.8 million in 2017. A 15% rise in fixed staff costs were attributed for the increase.
"With market volatility continuing during the year, it was encouraging to see that our strategy of diversification underpinned solid business performance for the period. Most pleasing is that we delivered strong fund performance for our clients during the year with 77% of our mutual fund assets under management outperforming the median over three years," said Chief Executive Maarten Slendebroek.
Jupiter's Mutual Funds decreased 16% in 2018 to GBP36.9 billion from GBP43.8 billion.
Slendebroek continued: "As reported throughout the year we saw net outflows, primarily in our fixed income strategy which impacted closing assets under management. Gross sales remained strong as we saw client demand for active asset management continue. Our robust capital position means that 90% of underlying earnings will be returned to shareholders through a total dividend of 28.5p."
Jupiter noted it has established a Luxembourg office to manage its European clients "without any disruption post-Brexit, despite the political and economic uncertainty that it may bring".
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