Jupiter suffers continued outflows in 'disappointing' H1

Jupiter suffers continued outflows in 'disappointing' H1

The outgoing chief executive of beleaguered fund house Jupiter has called the first six months of the year “disappointing”, as the group lost 19 per cent of its assets under management and investors continued to withdraw cash from the company’s funds.

In its half year results released today (July 29), the group posted £3.6bn in net fund outflows, while assets under management dropped from £60.5bn to £48.8bn.

AUM was mainly hampered by declining markets, Jupiter said, which reduced assets by £8.1bn overall, £3bn of which happened in June.

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Underlying pre-tax profits also dropped, from £78.2mn in the same period in 2021 to £29.7mn, though the company maintained its dividend at 7.9p per share.

Andrew Formica, who announced last month he will step down as chief executive of the fund house after receiving criticism about his performance, said the market conditions in the period have heavily impacted investor sentiment.

"Our overall AUM and net outflow position is disappointing, and it remains the board's highest priority to improve the performance of the group, with a particular focus on improving the client flow position,” he said.

Formica highlighted the main source of outflows, in both the unconstrained fixed income strategies and several growth-focused funds, including the European and UK mid cap funds.

Gross flows were £6.9bn for the half year, similar to the same period last year.

“There continue to be signs of positive momentum in areas that have been a strategic focus for the business - with both the institutional channel and our sustainable strategies in positive net flows for the period,” Formica said.

Under half of the group’s funds (43 per cent) have outperformed their median over the past three years, according to Jupiter, down from 58 per cent in December last year.

Succession planning

Formica will step down from Jupiter in October this year, after announcing last month that the “initial phase” of the “business transformation” has taken place.

Commentators have professed expectations of an upcoming takeover for the company, which has consistently posted outflows from its funds since 2017.

This is despite Formica stressing earlier this year that he does not see Jupiter as being part of the current wave of consolidation in the sector.

In May, former board member Jon Little criticised the fund house, saying it has "lost its way" and needs to change its management and strategy.

Little took aim at Formica, saying his appointment was a “mistake”, and the selection process was undertaken with “undue haste and without proper consideration of the risks involved”.

He also suggested the company's drop in share price seen over the past few years was “self inflicted”.

At the time Jupiter said: “We listen to and respect the views of our shareholders and will respond to Little directly. 

“We have a clear, consistent strategy which we are focused on executing.

“We are confident that we have the right foundations in place to deliver on this, underpinned by our strong capital position.”