Jupiter Asset Management plans aggressive expansion

Jupiter Asset Management is preparing for acquisitions to expand its investment offerings. The fund industry is currently battling outflows, declining revenues, and cost pressures. Matthew Beesley, CEO of Jupiter, announced that the company has built a financial reserve to fund a "supplementary acquisition" that will expand the product portfolio and client base. Beesley emphasized to the Financial Times the firm's willingness to attract new talent, whether through team poaching or smaller boutique acquisitions. His statements come at a time when mid-sized companies like Jupiter, Abrdn, Artemis, and Liontrust are contending with outflows from actively managed funds as investors increasingly shift to cheaper passive products. According to the Investment Association, retail investors pulled £136 million from active funds in May while passive funds attracted £2.1 billion. Vincent Bounie of Fenchurch Advisory sees industry challenges as continued key drivers for M&A activities. He expects the next phase of mergers and acquisitions to increasingly encompass the maturing market for private investments. In recent years, several asset managers have merged or been acquired by competitors. Jupiter acquired Merian Global Investors for £370 million in 2020, while Abrdn emerged from a merger of Standard Life and Aberdeen in 2017. Earlier this year, Liontrust approached its smaller London-based rival Artemis for a potential acquisition, which ultimately did not materialize. Jupiter's surplus capital has grown to £198.5 million—nearly four times the amount required by regulators. The company currently manages just over £50 billion, of which roughly £42 billion belongs to private individuals. However, Beesley plans to increase the proportion of institutional investments. Beesley rules out a larger acquisition with a rival, as many investors in the industry are skeptical of large defensive mergers. Instead, he wants to invest the accumulated capital in acquisitions that bring in new investment talent without burdening the company's cost base. Beesley has simultaneously reduced costs by downsizing staff and consolidating funds. The half-year results released on Friday showed that costs had decreased by 2 percent to £129 million compared to the previous year. Analysts praised these cost-cutting measures, but the departures of key figures like longtime UK equities fund manager Ben Whitmore have impacted outflows, which amounted to a net £3.4 billion in the first half of the year. Wayne Mepham, CFO and COO of Jupiter, warned that the funds managed by Whitmore might see further outflows in the coming months leading up to his departure at the end of the year.