Jupiter Fund Management's AUM fell by 19% over the first half of 2022 to £48.8bn amid net outflows of £3.6bn and declining markets, a result CEO Andrew Formica (pictured) described as "disappointing".
According to its half-yearly results, the group experienced gross inflows of £6.9bn but this was not enough to overturn the aforementioned flood of outflows.
Alongside net outflows, a general market decline brought the firm's AUM down from £60.5bn at 31 December 2021 to £48.8bn at the end of June. Much of this decrease came late in the period, with market declines totalling £3bn June alone.
"The first half of 2022 has been particularly challenging for both the industry and Jupiter, as the continued impact of the coronavirus pandemic, the war in Ukraine and rising inflation have created turbulent markets and heavily impacted investor sentiment," said Formica.
Jupiter has come under fire recently for its lacklustre returns and its performance fee payout. Just two weeks ago (17 July), its £1.2bn Chrysalis investment trust was likened to the Woodford drama, though experts told Investment Week that this comparison was somewhat limited. However, there are growing concerns of a 'contagion' effect.
The AUM drop also led profits to take a hit. Excluding net performance fee charges, underlying profit before tax fell to £53.9m, down from £79.8m in the same period last year. Underlying earnings per share before performance fees dropped to 7.8 pence from 11.7 pence in 2021.
Taking into account deferred awards from prior year net performance fees, underlying profit before tax was £29.7m, down from £78.2m in H1 2021, and underlying earnings per share was 4.2 pence down from 11.5p in the first half of 2021.
Retail investor sentiment turned sour across both equity and fixed income over the period, with the firm's retail and wholesale channel saw net outflows of £3.8bn. This was driven by redemptions from European and Asian-based clients out of Dynamic Bond, as well as UK clients from growth-focused strategies such as European Growth and UK Mid Cap.
These outflows were partly offset by positive inflows into value-focused products, such as Asian Income, Japan Income and Global Value Equity.
Jupiter's institutional channel brought in £200m of new capital in the first half. This was driven by a new mandate into its Global Sustainable Equities strategy and inflows into NZS Capital's Global Equity strategy, partially offset by a client redemption from a European Growth strategy.
Sustainability-labelled products attracted net inflows of £300m across both retail and institutional channels. The firm's sustainability range now has over £1.4bn in assets.
Formica will leave his position as CEO at the start of October following three years at the firm. He will be succeeded by Matthew Beesley, the company's CIO, who will take up the role of CEO at that time.
The departing CEO said: "We see opportunities for growth across our business. I am confident that we will see these come through under Matt Beesley's leadership, as he builds, evolves and adapts the group's strategy. He will update the market on his plans to do so later in the year."
Given the market environment, the firm has been particularly cautious on new hires. Over the next year, Jupiter will aim to reduce fixed staff and non-compensations costs.