Fund manager Jupiter hires bankers to develop £ 1.5bn bid defense plan | Economic news

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Jupiter, one of Britain’s best-known fund managers, is on alert for a takeover approach amid a frenzy of trading activity in the global asset management industry.

Sky News has learned that Jupiter’s board, which is chaired by Nichola Pease, has hired consultancy firm Robey Warshaw to beef up its defenses against a potential bid.

City sources said over the weekend that the company had yet to receive an approach, but admitted it was “on the radar” of a number of financial and strategic bidders.

Jupiter, which is led by Andrew Formica, one of the industry’s top-rated bosses, has seen its shares drop more than 10% in the past year.

While assets under management hit a record high of £ 60.7bn at the end of September, it recorded net outflows in the previous quarter of more than £ 500m.

The company has been affected by a growing shift in the industry towards passive index investing, with Jupiter’s once-huge global equity absolute return fund and the Merlin line of multi-manager funds being particularly affected.

On a brighter note, it posted record gross inflows of £ 9.6 billion in the first half of the year, particularly in key growth areas such as sustainable global equities and income securities. fixed.

At Friday’s closing price of 233.8 pence, Jupiter had a market cap of almost £ 1.3 billion.

A leading shareholder said over the weekend that any bid approach would need to come with a “very substantial premium” to the current share price to secure their engagement.

“The company is on the right track and has one of the best management teams in the industry,” said the investor.

Jupiter was founded in 1985 by John Duffield, one of the industry’s most prominent figures.

It is Britain’s second largest retail fund manager and has been listed on the London Stock Exchange since 2010.

Previously owned by Commerzbank, the German lender, it was later bought by TA Associates, the private equity firm.

The company has gone through a recent turbulent period characterized by significant capital outflows, which was particularly affected in 2019 with the resignation of Alexander Darwall, a star fund manager.

Picture:
Jupiter CEO Andrew Formica was formerly CEO of Henderson, as pictured here in 2009

She hired Mr. Formica, the former deputy managing director of Janus Henderson, also in 2019, and he oversaw significant improvements in operational efficiency and company culture, according to insiders.

A seasoned trader, Mr. Formica arranged for the acquisition of Merian Global Investors last year, as well as a stake in NZS Capital in the United States.

The Merian deal made Jupiter “a stronger and more diverse company,” according to an insider, bringing the number of funds with more than £ 1 billion under management to 14.

He has also overseen a sustained push in environmental, social and governance investments – the hottest trend in investment management globally.

A takeover bid on Jupiter would come at a time of significant activity for companies in the sector.

Abrdn this month confirmed the acquisition of Interactive Investor, the consumer funds platform, for £ 1.5 billion, while River and Mercantile are at the center of a bidding war led by Martin Gilbert, the founder of Aberdeen Asset Management.

Artemis, another fund manager partially owned by the New York-listed Affiliated Managers Group, recently hired advisors to explore strategic opportunities.

Much of the consolidation activity is driven by a desire for scale and opportunities to derive cost savings from business combinations.

Robey Warshaw’s involvement is intriguing as Jupiter is smaller in terms of market value than most of the listed companies it works with.

The company, which former Chancellor George Osborne now works for, is working with BT Group on its takeover defense strategy as the telecoms giant braces for a possible approach from Altice tycoon Patrick Drahi.

Jupiter declined to comment.

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