Coronavirus-induced market crashes, £2.7bn of outflows and the cost of its Merian takeover saw giant fund house Jupiter’s profits tumble 50 per cent in the first half of 2020.
Jupiter’s interim report, published today (July 29), showed its statutory profit before tax was £41m for the six months to June — half the £81.4m the asset manager reported for the same period last year.
The biggest thorn in Jupiter’s side was a £21.5m drop in net management fees, due to lower levels of assets under management, while it also failed to bag any of the £7.3m in performance fees it did last year.
Jupiter’s funds suffered some £1.6bn of negative market movements in the first half of the year as the coronavirus crisis saw markets experience some of their biggest daily drops on record.
The market drops, coupled with £2.7bn pulled from its mutual fund range in the six months, chipped away at its assets total, which was down 15 per cent year-on-year from £46bn to £39bn as at June 2020.
Investors seemed more positive in the second quarter of the year, however, with net inflows picking up and Jupiter seeing £220m placed into its mutual funds.
Chief executive Andrew Formica said he had “strong hopes” for the rest of the year given Jupiter’s “strong performance”.
“We have a really strong track record which bodes well for future flows, which is being recognised by clients. When markets are falling, that’s when active management like Jupiter’s really pays off.”
In today’s results Jupiter said 80 per cent of its mutual fund Aum had outperformed over three years, with 76 per cent of assets featuring in the first quartile.
Mr Formica added: “For the first half of the year, in common with the wider asset management industry, Jupiter has faced challenging market conditions, largely brought about by the global coronavirus pandemic.
“Although we suffered a significant fall in AUM due to both outflows and markets in the first quarter of the year, the second quarter has seen a return to moderate inflows and a partial recovery in asset prices.
“Despite market volatility, our investment teams have delivered strong investment outperformance reinforcing our commitment to high-conviction active management.”
imogen.tew@ft.com
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