Merian acquisition helps Jupiter cope with pandemic disruption

The acquisition of smaller rival Merian helped asset management group Jupiter to cope with the turbulence created by the coronavirus pandemic in 2020, but it still suffered outflows as investors pulled money from its funds.

The company said on Friday that underlying pre-tax profits rose by a tenth to £179m in 2020 on revenues that increased 18 per cent to £448m, helped by a significant contribution from Merian.

Andrew Formica, chief executive, said Jupiter had “laid strong foundations” for future growth. 

Jupiter also announced that it would pay a special dividend of 3p per share on top of an unchanged full-year ordinary dividend of 17.1p.

Formica said the acquisition of Merian was a “transformational deal” for Jupiter. “Financially it has exceeded our expectations, delivering greater than expected synergies and already making a significant contribution to group profits,” he said.

The company’s assets under management increased 37 per cent in 2020 to £58.7bn at the end of December, helped by a £17bn contribution from Merian.

But investors pulled £4bn from Jupiter’s funds last year, compared with withdrawals of £4.5bn in 2019.

Formica pointed out that Jupiter’s strategies returned to net inflows in the nine months from the end of March following the disruption that affected financial markets globally in the first quarter of 2020.

“Against a backdrop of strengthening investor sentiment and improved momentum as we turn the corner in the battle against Covid-19, I am confident that Jupiter is strongly positioned for future growth,” he said.

Statutory pre-tax profits dropped 12 per cent from £151m in 2019 to £132.6m last year, due to exceptional costs mainly relating to the Merian deal. Earnings per share fell 23 per cent to 21.3p.

David McCann, an analyst at Numis, said: “Longer term, we regard Jupiter as a strong asset management franchise with plenty of potential.”