TIDMJUP
RNS Number : 2951Q
Jupiter Fund Management PLC
17 October 2023
Jupiter Fund Management plc
Trading Update and Notice of Results
======================================
17 October 2023
Jupiter Fund Management plc ("Jupiter", the "Group") today
issues its trading update in respect of the three months to 30
September 2023.
Key points
-- Despite the ongoing macro-economic uncertainty weighing on retail demand, overall flows year to date remain
within expectations
-- Assets under management (AUM) finished the period at GBP50.8bn
-- We are continuing to deliver against our strategic objectives, with investments in our clients, our people and
our technology infrastructure
Trading update
Macro-economic uncertainty continued to weigh on investor demand
for risk assets through the third quarter, particularly with retail
clients.
Overall, we saw net outflows since the start of the year of
GBP1.0bn, all of which came through in the third quarter. Flows
from Institutional clients were marginally positive in the third
quarter, bringing the total year to date net flows to GBP1.7bn. The
retail, wholesale and investment trust channel saw net outflows of
GBP1.0bn over the three months. AUM finished the period at
GBP50.8bn.
Assets from Institutional clients grew to GBP9.8bn. Net flows
were positive for the fifth consecutive quarter, albeit marginally.
We have previously stated that the profile of fundings from
Institutional clients would not be linear and that we would not
expect to see significant mandates funding through each discrete
reporting period. However, our late-stage institutional pipeline
remains strong and we are confident that we will see further
mandates funding over subsequent reporting periods.
There were outflows from Retail and Wholesale clients in the
third quarter of GBP1.0bn, broadly consistent with both the first
half of 2023 and wider market trends. The areas of client demand
remained relatively unchanged from the first half, with inflows
into Asian Income and Japanese Equities not enough to offset
outflows from unconstrained fixed income and UK and European
equities.
Despite the challenging macro-economic backdrop and ongoing
market uncertainty, we remain confident in our previously stated
expectations of 'modest outflows' for the full year.
GBPbn AUM at Q3 2023 Q3 2023 AUM at
30 June 2023 net flows market returns 30 September 2023
====================================== =============== ============ ================= ====================
Retail, wholesale & investment trusts 42.1 (1.0) (0.1) 41.0
======================================= =============== ============ ================= ====================
Institutional 9.3 - 0.5 9.8
======================================= =============== ============ ================= ====================
Total 51.4 (1.0) 0.4 50.8
======================================= =============== ============ ================= ====================
of which is invested in mutual funds 38.1 (1.1) 0.1 37.1
Matthew Beesley, Chief Executive Officer, commented:
"Despite the challenging market environment, we expect our
financial performance for the current year to be in line with
expectations. During my first year as CEO, we have continued to
make progress against our previously stated strategic objectives
and I believe the continued investment in our clients, our
technology and our people will deliver long-term value.
The future of the asset management industry will not be through
the traditional model of simply 'distributing' products, but in
forming deeper relationships with our clients. We have rationalised
our fund range and right-sized the business and are investing to
ensure the company is aligned with clients' requirements which are
fundamentally changing. Whilst progress will not be linear, the
growth of our institutional and international businesses are
encouraging indications of our ability to increase scale and grow
our appeal to a broader range of clients".
Continued strategic progress
At our full year 2022 results in February, we announced our
strategy for delivering growth, focused on the four key strategic
objectives of increasing scale, decreasing undue complexity,
broadening our appeal to clients and deepening relationships with
all our stakeholders. We continue to make good progress against
each of these, including growing our institutional business,
rationalising the fund range, developing new products and
restructuring the operating model. Today we are announcing further
actions consistent with these objectives which will help us to
position the business for future growth through investments in our
clients, in our technology, and in our people.
We have restructured our client-facing teams to better align
with evolving client needs and to increase scale in key growth
areas, such as institutional and international. Through engaging
with an increasingly sophisticated client base, this newly-formed
client group will move beyond a 'product-focused' mindset and
consider alternative methods for clients to access our investment
capabilities. Technology and increased automation will play a
crucial role in this, reducing the undue complexity of manual
processes, and we are investing in our content and data
capabilities to improve both our client delivery and
experience.
In order to reduce complexity and to broaden our appeal to
clients, we have focused through the last year on carefully and
strategically curating our product offering through the fund
rationalisation programme, which is now almost complete, and the
range of thematic funds, which will be launched shortly. Consistent
with this strategic approach, we have also been reviewing our
pricing structures to ensure that we are competitively positioned.
In line with our commitment in this year's Assessment of Value
report, we are implementing a tiered fee structure for clients
investing in our UK Unit Trust and OEIC ranges. This will create
better alignment between Jupiter and our clients and allow them to
benefit from economies of scale as a fund's assets grow.
The new model will be implemented from early 2024 with basis
point discounts taking effect as a fund reaches various levels of
assets under management. The first threshold will be when a fund
reaches GBP500m of assets, at which point a 2 basis point discount
will be applied. Although we cannot forecast client flows and
business mix, at our current AUM this would result in an additional
decline in the overall net revenue margin through 2024 of between
1.5 bps and 2 bps.
In addition to investing in our clients and in our technology
infrastructure, we are also investing in our people. In today's
competitive market environment, we have worked hard to ensure our
talented investment professionals are remunerated appropriately,
based around performance criteria that ensures interests are
aligned between Jupiter, our people and our clients. Our thoughtful
and competitive retention policies are designed to support the
growth of the firm in key strategic areas.
If the performance criteria are reached, and assuming that there
is no material market recovery, this will have an impact on our
total compensation ratio. Depending on market conditions, we can
reasonably expect the compensation ratio to be within a range of
mid to high '40%'s through 2024, which we believe is in line with
observable trends across the peer group.
Positioned for growth
As we manage the business in line with our four strategic
objectives, key management actions have provided us with the space
to invest across the business, in our clients, our people and our
technology infrastructure. Our business is evolving to become a
more attractive place for clients to form deep, long-term
relationships and to share in economies of scale.
We are seeing momentum in key areas of strategic importance and
we will seek to build on that, controlling those factors we can
control and investing in the growth of the business to deliver
long-term shareholder value.
Analyst presentation
There will be a short virtual analyst presentation at 09:00 BST
on 17 October 2023. The presentation will be accessible via a live
webcast, which will be available at:
https://secure.emincote.com/client/jupiter/jfm036.
Please note that questions can be asked via the webcast.
Notice of results
Jupiter will be issuing full year results for the year to 31
December 2023 on 23 February 2024 and will host an analyst
presentation to discuss the results.
For further information please contact:
Investors Media
Jupiter Alex James Olivia O'Connor
+44 (0)20 3817 1636 +44 (0)20 3817 1436
Edelman Smithfield Latika Shah Andrew Wilde
+44 (0)7950 671 948 +44 (0)7786 022 022
LEI Number: 5493003DJ1G01IMQ7S28
Forward-looking statements
This announcement contains forward-looking statements with
respect to the financial condition, results of operations and
businesses of the Group. Such statements and forecasts involve risk
and uncertainty because they relate to events and depend upon
circumstances in the future. There are a number of factors that
could cause actual results or developments to differ materially
from those expressed or implied by forward-looking statements and
forecasts. Forward-looking statements and forecasts are based on
the Directors' current view and information known to them at the
date of this announcement. The Directors do not make any
undertaking to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
Nothing in this announcement should be construed as a profit
forecast.
Historic quarterly net flows and AUM
======================================
Flows and AUM
by quarter
================ ======= ================= ================= ======== ======== ======== ======== ========
Q1 Q2 2022 Q3 2022 Q4 Q1 Q2 Q3 Q4
2022 GBPbn GBPbn 2022 2023 2023 2023 2023
GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
================ ======= ================= ================= ======== ======== ======== ======== ========
Total
================ ======= ================= ================= ======== ======== ======== ======== ========
Opening AUM 60.5 55.3 48.8 47.4 50.2 50.8 51.4
Gross inflows 3.8 3.1 3.8 4.4 3.2 4.5 2.4
Gross outflows (5.4) (5.1) (4.4) (3.7) (4.1) (3.6) (3.4)
================ ======= ================= ================= ======== ======== ======== ======== ========
Net flows (1.6) (2.0) (0.6) 0.7 (0.9) 0.9 (1.0)
Market returns (3.6) (4.5) (0.8) 2.1 1.5 (0.3) 0.4
Closing AUM 55.3 48.8 47.4 50.2 50.8 51.4 50.8
Retail,
wholesale
& Investment
trusts
================ ======= ================= ================= ======== ======== ======== ======== ========
Opening AUM 55.4 50.2 44.0 42.3 43.4 43.5 42.1
Gross inflows 3.4 2.8 2.8 2.9 2.8 2.7 2.1
Gross outflows (5.2) (4.8) (3.9) (3.5) (3.8) (3.4) (3.1)
================ ======= ================= ================= ======== ======== ======== ======== ========
Net flows (1.8) (2.0) (1.1) (0.6) (1.0) (0.7) (1.0)
Market returns (3.4) (4.2) (0.6) 1.7 1.1 (0.7) (0.1)
Closing AUM 50.2 44.0 42.3 43.4 43.5 42.1 41.0
Institutional
================ ======= ================= ================= ======== ======== ======== ======== ========
Opening AUM 5.1 5.1 4.8 5.1 6.8 7.3 9.3
Gross inflows 0.4 0.3 1.0 1.6 0.4 1.8 0.3
Gross outflows (0.2) (0.3) (0.5) (0.3) (0.3) (0.2) (0.3)
================ ======= ================= ================= ======== ======== ======== ======== ========
Net flows 0.2 - 0.5 1.3 0.1 1.6 -
Market returns (0.2) (0.3) (0.2) 0.4 0.4 0.4 0.5
Closing AUM 5.1 4.8 5.1 6.8 7.3 9.3 9.8
-END-
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END
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October 17, 2023 02:00 ET (06:00 GMT)
Jupiter Fund Management (LSE:JUP)
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