Jupiter’s Funds Under Management Beat Estimates on Retail Flows

Jupiter Fund Management Plc (JUP) said funds under management climbed 2.6 percent in the first half, more than analysts predicted, as customers added more money to higher-margin mutual funds. The shares climbed.

Jupiter’s assets increased to 23.4 billion pounds ($37 billion) at the end of June from 22.8 billion pounds at Dec. 31, the firm said in a statement today. That beat the 23.3 billion- pound estimate of four analysts compiled by the company.

“People are nervous for good reason but investing environments tend to be better when people are nervous and valuations are lower,” Edward Bonham Carter, Jupiter’s chief executive officer, said in a telephone interview today. “You have to project forward three to five years.”

Record low interest rates and quantitative easing have reduced savings rates in the U.K. so retail customers are looking to take more risk as they seek to boost their assets. The 265 million pounds of inflows from individual customers in the first half helped to mitigate the effect of 502 million pounds of withdrawals by institutional clients, including wealth manager St. James’s Place Plc. Jupiter charges higher fees for retail investors.

Client flows and assets under management were “materially better,” Rae Maile, a London-based analyst at JPMorgan Chase & Co. with an overweight rating on the stock, wrote in a report to clients today. That will “in combination with the recent market rally, lead to higher profit estimates.”

Jupiter rose 3.8 percent to 225.4 pence at 11:21 a.m. in London trading, valuing the company at about 1 billion pounds.

Separately, F&C Asset Management Plc (FCAM), the U.K. money manager cutting costs and changing products under Executive Chairman Edward Bramson, had 2.8 billion pounds of net outflows from insurers including Friends Life and Achmea BV in the first half. Assets under management dropped 1.9 percent to 98.2 billion pounds over the first six months of the year.

F&C declined 1.3 percent to 86.85 pence in London.

To contact the reporter on this story: Kevin Crowley in London at kcrowley1@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net

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