Jupiter Asset Management shed £2bn in assets and saw profit halved over the first half of the year, ahead of its merger with Merian Global Investors, as the Covid-19 crisis brought about challenging market conditions and outflows.
Outflows were most acute in the first three months of the year when investors pulled £2.3bn, predominantly from fixed income and alternatives strategies. A slight reversal in Q2 saw a £300m inflow driven by fixed income flows and a bounce back in markets of £3.9bn.
At the end of June, Jupiter’s assets under management stood at £39.2bn, down from £42.8bn at the end of 2019.
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Statutory profit before tax decreased by 50% in the period to £40.8m, from £81.4m at 30 June 2019. The drop was largely down to a £21.5m fall in net management fees due to the lower levels of AUM.
The firm booked zero performance fees during the period, down £7.3m compared to the first half of 2019. But Jupiter noted that at 30 June, 80% of its mutual fund AUM had delivered above-median performance against peer group funds over three years. This was up from 72% at the end of December.
Administrative expenses increased £3.4m to £114.4m, due to an increase in exceptional items of £8.4m to £15.8m relating to transaction costs for the Merian acquisition.
Overall, net revenue was £161.9m, down 15% compared with H1 2019.
Jupiter said the acquisition of Merian Global Investors, which completed on 1 July, outside the reporting period, is “running to plan”. “The integration and delivery of the longer-term benefits for the wider business will be a focus for the remainder of 2020,” it added.
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The two groups’ combined AUM for H1 2020 was £56bn, £39bn from Jupiter and £17bn from Merian.
Jupiter chief executive Andrew Formica (pictured) said: “For the first half of the year, in common with the wider asset management industry, Jupiter has faced challenging market conditions, largely brought about by the global coronavirus pandemic.
“Although we suffered a significant fall in AUM due to both outflows and markets in the first quarter of the year, the second quarter has seen a return to moderate inflows and a partial recovery in asset prices.”
“Despite market volatility, our investment teams have delivered strong investment outperformance reinforcing our commitment to high-conviction active management.”
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