Alexander Darwall’s departure has left a nasty mark on Jupiter as over £4bn flies out the door of the FTSE 250 manager.
Jupiter recorded another year of outflows with clients pulling a total of £4.5bn from the fund group in 2019. This was down slightly from the £4.6bn that poured out in 2018.
Total assets grew by a modest £100m to £42.8bn after factoring in positive market movements.
But the lower average assets under management resulted in net management fees sliding 6% to £370m and caused profits to slump 16% to £151m.
Bulk of outflows from Darwall’s strategy
Jupiter said the bulk of the redemptions (£4.3bn) came from the European Growth strategy, previously run by Darwall.
Darwall announced he would be leaving the firm last April to set up his own venture Devon Equity Management. News of his departure triggered a wave of redemptions over the first half of the year and caused Jupiter to lose the European Opportunities trust mandate as the board followed Darwall.
Chief executive Andrew Formica took comfort in the fact that outflows for the year were “almost entirely the result of the planned departure” of Darwall.
“Jupiter delivered a resilient performance in 2019 despite a challenging backdrop,” he said. “It was another year of strong investment performance, with 72% of mutual fund assets under management outperforming over three years.”
Turnaround for Bezalel’s fund
Formica was also heartened by the turnaround in appetite for Jupiter’s fixed income funds. Ariel Bezalel’s Jupiter Strategic Bond fund had been the main culprit behind redemptions in 2018.
He struck a hopeful tone for the year ahead, highlighting Jupiter’s acquisition of Merian for £370m as an important step in the fund group’s journey of growth.
“We believe this acquisition will both strengthen our existing business and support our future growth, which in turn will improve client outcomes and ultimately deliver stronger returns to shareholders.”
