By Sinead Cruise
LONDON (Reuters) -Jupiter Fund Management’s shares slid 12% on Tuesday after it flagged net outflows of 2.2 billion pounds ($2.8 billion) for 2023, more than previously anticipated, and the departure of star manager Ben Whitmore this summer.
The British fund firm blamed “a delay” in some institutional mandates and weaker retail sentiment in October and November for the increased full year net outflows, after forecasting at the start of last year that they would be “modest”.
Jupiter also said veteran portfolio manager Ben Whitmore, who joined in 2006 and manages around 10 billion pounds in assets, around one-fifth of its total under management, would leave the group in July to launch an independent boutique.
Whitmore is the latest high profile manager to part ways with Jupiter, after former UK equities stock-picker Richard Buxton stepped away from its UK Alpha Fund in August.
So-called active asset managers like Jupiter can occasionally lose significant volumes of assets when star managers move on, as many clients grow accustomed to that individual’s investment style and follow them to new firms.
“…Jupiter also saw significant AUM loss post a manager departure in the second half of 2019,” Citi analysts said, referring to its earlier loss of Alexander Darwell.
However, Jupiter said it expects to report performance fees of more than 10 million pounds for the year ended Dec.
31, higher than previous guidance, while 2023 assets under management (AUM) would also likely come in higher than in 2022, at 52.2 billion pounds.
Jupiter estimated 1.1 billion pounds in outflows in the fourth quarter, compared with consensus expectations of 500 million pounds, Citi analysts said in a note.
Jupiter shares have fallen 16% so far this year, and shed more than 28% in 2023.
NEW ERA
Whitmore and Jupiter have agreed his new firm, once established, will not compete with his former employer for two years from his leaving date.
Alex Savvides is expected to arrive at Jupiter by autumn and will assume management of the 2.1 billion pounds Jupiter UK Special Situations Fund.
He will team up with other Jupiter new-joiners Adrian Gosden and Chris Morrison, who will assume management of the 1.6 billion pounds Jupiter Income Trust.
Jupiter said in a statement that Whitmore will remain with Jupiter until at least end-July, to complete an “orderly and collaborative transition process”.
“Alex’s recruitment means that we have an excellent succession plan in place for the UK Special Situations strategy and our clients,” Chief Executive Matthew Beesley said.
Jupiter also said it was likely it would need to mark down some goodwill on its balance sheet, amid lower asset valuations, muted demand for risk assets and a higher cost of capital.
($1 = 0.7847 pounds)
(Reporting by Sinead Cruise; Editing by Elizabeth Howcroft and Alexander Smith)
