Jupiter CEO Dodges M&A Bankers to Keep Fund Firm IndependentBy
Slendebroek says he’s avoiding wave of asset-management deals
Unlike peers, he doesn’t see U.S. as the ‘holy grail’
In an industry rife with deal-making, Maarten Slendebroek takes a simple approach to keeping Jupiter Fund Management Plc independent: he avoids having meetings with investment bankers.
The Jupiter boss has repeatedly slapped down speculation that his firm, which oversees $56 billion, could be the next to succumb to the wave of asset-manager mergers and acquisitions. The company doesn’t need to cut costs, it’s not losing money to cheaper passive funds and plans are in place to cope with expensive upcoming regulation, he said in an interview at his firm’s London headquarters.
“One of the ways to stay out of trouble is not to say yes to everybody” when they ask for meetings, Slendebroek said. “There is no shortage of opportunities to interact. I understand why some firms might be interested in Jupiter. I get that. But why would it be interesting from our perspective?”
Europe’s asset-management industry has seen a flurry of consolidation in recent months as firms seek solutions to the revenue pressures caused by record-low interest rates, costly new rules and competition from cheaper index funds. Henderson Group Plc is merging with Janus Capital Group Inc., Amundi SA is buying Pioneer Global Asset Management and Standard Life Group Plc is combining with Aberdeen Asset Management Plc to create a Scottish firm with the scale to compete with the world’s biggest.
Speculation that Jupiter might be next is all the more intense given that the list of available U.K. targets is shrinking all the time.
Yet Slendebroek said the only reason he’d do a deal would be to move the 32-year-old firm into new growth areas. He said he wouldn’t pursue a merger to save money (“our cost-to-income ratio is significantly lower than most”), seek scale (“I’m not a buyer of that argument”) or add distribution capacity (“If we can sell 1.3 billion pounds in a quarter, will it make a huge difference?”)
Neither is the former BlackRock Inc. veteran interested in expanding into the U.S., home of the world’s largest asset-management industry and a lure for competitors including Schroders Plc, Henderson and Aberdeen. Slendebroek is instead focused on continental Europe and Asia -- two regions where he said Jupiter’s business can still expand rapidly.
“I don’t see America as the holy grail at all,” said Slendebroek, who has been CEO of Jupiter for just over three years. “Hiring a few guys in New York is doomed to fail. The world is a big place, we’re growing like Topsy, and instead of trying to do everything at the same time, we try to do a limited number of things well.”
Concerned about Jupiter’s exposure to developed equity markets, Slendebroek has sought to re-balance the company’s asset base since taking the helm in early 2014. He said he wants to grow the emerging-market business and build out the firm’s fixed-income and absolute-return strategies -- two asset classes that tend to be less volatile than stocks.
Slendebroek is also looking to increase Jupiter’s institutional client base, which currently accounts for just 10 percent of total assets, to offset redemptions from flightier retail investors during times of market stress.
As for Jupiter’s shareholders, Slendebroek said they’re happy to stick with the current strategy, which brought record inflows in the first quarter.
Jupiter’s shares hit a record high of 498.80 pence on Friday, and the company trades at almost 15 times earnings. That’s up from a low of about 12 times in January, though it’s still slightly below the average of five U.K. fund managers including Aberdeen and Schroders, data compiled by Bloomberg show.
“If we start underperforming, we have outflows, the shares go down or we have to cut the dividend -- those are the kind of reasons that will make shareholders less happy,” he said. “For now, we deliver the goods.”