Merian Global Investors  

Investors pull £1bn from Merian funds after Jupiter deal

Investors pull £1bn from Merian funds after Jupiter deal
 Credit: Jason Alden/Bloomberg

Investors pulled more than £1bn from Merian Global Investors-branded funds in the months following its takeover by Jupiter Asset Management.

A trading update, published today (October 16), showed Merian funds saw £1bn net outflows in the three months to September after the £370m takeover deal completed on July 1.

Investors primarily withdrew cash from Merian’s global equity absolute return fund, the systematic strategy, and from a number of funds where there had been a change of fund manager relating to the acquisition.

The move away from Merian brought the combined entity’s net outflows to £953m for Q3, overshadowing the £56m of net inflows enjoyed by Jupiter-branded products.

Some £900m placed into Jupiter’s fixed income strategy made up the majority of its inflows.

It was the third consecutive quarter that Merian-branded products had seen net outflows, totalling £5.3bn for the nine months to September.

Jupiter’s own funds suffered in Q1 of this year, when investors fled the stock market during the coronavirus-induced March crash, but saw positive inflows of £305m and £56m in Q2 and Q3 respectively.

Jupiter announced in February this year it would buy rival fund house Merian for £370m.

Today’s results show the new fund house had combined assets under management of £55.7bn, with Merian’s assets making up £16.5bn of that total.

The deal was the first significant acquisition by Jupiter chief executive Andrew Formica after he took the helm in March 2019 and saw Jupiter take on and pay off Merian’s debts as part of the buyout.

Jupiter has since pledged to keep the majority of Merian’s flagship strategies intact once the acquisition completes.

It announced earlier this month around 40 Merian investment professionals, including 23 fund managers, would join its investment team in what it called an “important step in the development of Jupiter’s business”.

Through the move, the four major franchises from Merian — UK small- and mid-cap, UK larger companies, systematic, and gold and silver — will all transition to Jupiter.

The Merian Systematic Positive Skew fund will close and the Merian Global Dynamic Allocation fund is currently under review.

Meanwhile areas of overlap between the two fund houses resulted in six fund managers — Ian Ormiston, Lloyd Harris, Simon Prior, Delphine Arrighi, Rob James and Mark Greenwood — leaving Merian.

Merian Global Investors was known as Old Mutual Global investors until fund managers at the company, led by head of UK equities, Richard Buxton, took part in a management buy-out in 2018. 

Mr Buxton was chief executive until standing down in June 2019, though he continues as a fund manager and head of UK equities.

After the Jupiter buyout, Merian shareholders own a combined 17 per cent of the business while the five fund managers who were major shareholders in Merian own about 1 per cent of the combined company.

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