Jupiter net outflows higher than expected, Ben Whitmore to leave firm

Jupiter Fund Management experienced higher-than-expected net outflows in 2023, it said in an update on Tuesday, totalling £2.2bn.

The outcome was attributed to delays in funding institutional mandates and weaker retail sentiment in the final months of the year.

It had initially forecasted "modest net outflows" for the year, a prediction it reaffirmed as recently as October.

Despite the challenging market conditions, Jupiter said it expected to report performance fees of more than £10m for the year ended 31 December, mainly due to the strong performance of a specific fund mandate throughout the year.

In light of the current economic environment, marked by lower asset valuations and reduced demand for risk assets among retail clients, Jupiter said it was assessing the potential impact on the valuation of its intangible assets as of 31 December.

The board said it was likely that the assessment would result in some impairment of goodwill on the company's balance sheet.

However, the impairment would not affect regulatory capital or Jupiter's ability to distribute capital to shareholders.

Jupiter said it had recognised goodwill from the acquisition of Knightsbridge Asset Management in 2007 of £341.2m, and Merian Global Investors in 2020 of £229.4m, which together formed part of its single cash-generating unit.

Economic conditions, coupled with higher capital costs and lower market valuations, had led to a short-term reduction in the overall business valuation.

At the same time, Jupiter announced that Ben Whitmore, the current manager of several funds including the £2.1bn Jupiter UK Special Situations Fund, was leaving the company to launch his own equities boutique, subject to regulatory approvals.

He would remain with Jupiter until at least the end of July.

The firm said it had recruited Alex Savvides, who would join from JO Hambro Capital Management, where he manages the £1.3bn UK Dynamic Fund.

Savvides would take over management of the Jupiter UK Special Situations Fund on his arrival, expected in the autumn.

Jupiter said it had also appointed Adrian Gosden and Chris Morrison, who would assume management responsibilities for the £1.6bn Jupiter Income Trust as part of the company's strategic moves to address these developments.

“Jupiter has always been a good home for outstanding talent and, since I joined Jupiter in January 2022, we have been working very hard to ensure that we have a pipeline of new hires which can both broaden our range of truly differentiated strategies and ensure orderly succession,” said chief executive officer Matthew Beesley.

“I am thrilled that Alex is joining us. His performance, delivery of excellent client outcomes and asset growth track record over a long period of time mark him out as one of the truly exceptional UK equity investors.”

At 1155 GMT, shares in Jupiter Fund Management were down 13.91% at 76.19p.

Reporting by Josh White for Sharecast.com.