Within its latest set of annual results, which saw the fund group quintuple its net inflows for the year from £1bn to £5.5bn, diversifying the business by adding to its multi-asset and global equity strategies was top of Jupiter’s agenda.
However, Slenderbroek told Portfolio Adviser its growth strategy still doesn’t include being acquired or merging with another asset manager.
“As you would expect, we have done a detailed strategic review and perhaps boringly concluded our strategy worked over the last five years, and we’re going to stick to it over the foreseeable future,” he said.
“We believe that we are well capitalised as demonstrated in 2017, we generate growth, our margins are above the industry average, so I don’t see any reason why we should aspire to being acquired or indeed merging with somebody.”
Over the last year in particular, Jupiter has been at the centre of numerous takeover rumours, with analysts suggesting it is the ideal size to be absorbed by a bigger player.
Despite the M&A chatter, Slenderbroek’s stance on Jupiter as potential takeover target has not changed. At the firm’s annual investment dinner last year, he shot down suggestions that the business was actively seeking potential partners or was a sitting duck, waiting to be snapped up by other managers.
As to whether the asset manager might go out and acquire some businesses of its own, Slenderbroek is not predicting anything will happen but added “it may at some point”.
“What I have said though is we continuously remain on the lookout for talent. If we find talented people in the areas that we’re looking who sit in a legal entity rather than at the back-end of a desk of a competitor, we may well make an acquisition at some point. Not predicting that that will happen. It hasn’t happened in the last two years, but it may at some point.”
Plan A
What is clear is that the firm is serious about continuing to diversify its business both in terms of products, geographical reach and client base.
By hiring JP Morgan Asset Management’s Talib Sheikh to head up its multi-asset offering, Slenderbroek said the group is plugging an “important gap” in the UK market.
“It puts us in a position to do more institutional business, which is a client diversification for us but it also offers product for the intermediated wholesale channels.”
Rather than expanding its footprint through opening multiple new offices this year, Slenderbroek said the group is “currently focused on doing more with the offices we have”, particularly in areas like Italy and Spain where it has rapidly increased its market share.
The firm is also continuing to manage potential Brexit-related risks by transferring the London-based management company of its Sicav range to Luxembourg. To counter a “tail risk with a lower likelihood”, the loss of its delegation rights, Jupiter is setting up the Luxembourg entity in such a way that it could accommodate the asset management business if need be. However, migrating the management firm is “plan A”, Slenderbroek stressed.
Charlotte Jones, chief financial officer, added that the project to get the management company through the regulatory approval process “is well on track”.
“We are managing the Brexit issue as well as you can with the uncertainty that is there,” she said.
“It’s important that the people in Luxembourg are real people who live there, work there because there is substantive activity in that management company that is going there. But that doesn’t mean hordes of people. We think it’s a range of somewhere between five and 10 people. And the roles that will be undertaken there are a combination of brand new things that we don’t have today and transfer of responsibilities.”
