Jupiter assets dip on private clients sale, net inflows slow

2014-10-11

(Reuters) - Jupiter Fund Management's assets under management fell in the third quarter after the sale of its private client business, while the pace of new money entering its funds also slowed, sending its shares down to the lowest level in more than a year on Friday.

Assets under management dropped to 31.7 billion pounds ($51.1 billion) in the September quarter from 33.1 billion at the end of June, it said in a statement on Friday, after 2.2 billion pounds of funds left the company with the sale of its private client and charity investment business to wealth manager Rathbone Brothers.

Jupiter completed the sale to Rathbones in September and said it intends to distribute estimated net proceeds of about 22 million pounds as a special dividend after the 2014 results, equivalent to about 4.8 pence a share, according to Thomson Reuters data.

Jupiter's chief executive Maarten Slendebroek said that the completion of the sale was an important strategic step which allows the firm to focus on its mutual fund operations.

"This part of the business continues to be the main driver of growth," he said in a statement.

About 83 percent of Jupiter's assets under management were in its mutual fund products at the end of September, up from 78 percent during the same period last year.

But net inflows into its mutual funds fell to 231 million pounds in the quarter from 410 million pounds three months earlier, and 278 million pounds in the same quarter last year. Year-to-date inflows stood at 1.1 billion pounds.

Top sellers during the quarter included its Dynamic Bond, Strategic Bond and Income Trust funds.

"Certainly the first two are lower margin fixed income funds and so this continuing product mix bias could add to concerns over revenue margin pressures," Barclays analysts Toni Dang and Daniel Garrod said in a research note on Friday.

At 1013 GMT shares in Jupiter were down 1.8 percent at 330 pence, in line with a similar fall in the FTSE Mid-250 index. But Jupiter's shares have fallen by 14.3 percent so far this year, while the Mid-250 index is down 8.7 percent.

CHANGING FOCUS

Jupiter is seeking to diversify away from its traditional equity business by attracting more money into less volatile fixed-income products.

But a change in the product mix dragged its margin on fees down to 0.87 percent in the six months to end-June, from 0.92 percent at the end of the same period in 2013 and weighed on its broader profitability.

In the latest quarter clients also pulled out 50 million pounds after the money manager said it planned to shut its cash and global energy unit trusts in the fourth quarter.

($1 = 0.6202 British pounds)