Assets under management rose by 11.9% during 2015 as Jupiter saw £2.1bn of net inflows into its mutual funds, offset by a £0.2bn outflow from segregated mandates, to leave the group managing a total of £35.7bn of assets. The share price responded to news of higher future costs with a decline of 5% in early trading.
Profits rose to £164.6m (2014: £160.0m) and total dividends rose by 29% to 25.5p per share (excluding the return of disposal proceeds in 2014). Underlying profit margins remained constant at 51% and net cash balances were £259m at year end (£2014: £251m). The group saw improving investment performance, with 68% of assets outperforming their benchmarks, after fees, over a three year period, up from 51% at Dec 2014.
The group is changing the management structure of its Luxembourg-based fund umbrella, known as a SICAV to bring it closer into line with the industry norm, and closer to the structures used to manage UK unit trusts. This will lead to an increase in costs, estimated at around £7m p.a. going forwards. The group is also moving its head office, from Hyde Park Corner to Victoria, which will lead to £5m p.a. of additional occupancy costs.
Mutual Funds now account for 87% of group AUM, a slight increase on last year. International clients provided half of mutual fund gross inflows and the majority of net flow growth, with flexible fixed income and European equities strategies proving particularly popular.
The group plans to open new offices in Italy and Spain in 2016 as it continues to target international growth. New fund launches are expected to include; an Asian Income fund in March, a global version of the existing Absolute Return Fund and a global environmental/ecology fund.
Jupiter believe that their robust investment performance, strong balance sheet and margins, plus planned new fund launches and organic diversification into new markets will deliver another year of progress, despite the headwinds from market volatility early in the New Year.
This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research for more information.