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Jupiter 'exploring' opportunities for wealth business

Jupiter 'exploring' opportunities for wealth business

Jupiter chief executive Edward Bonham Carter said the firm is 'exploring' options for its wealth business.

Speaking to Wealth Manager after the group announced a 55% jump in profit, Bonham Carter (pictured) remained tight-lipped on plans for the unit, which has been linked with bids companies including Rathbones and Brown Shipley.

'We are exploring options for the business and will make a comment when appropriate,' Bonham Carter told Wealth Manager.

'The industry is going through a period of consolidation and barriers for entry are going up. The winners in wealth management need to have the ability to scale their administrative platforms and gain advantage from business efficiencies.'  

The results showed that assets under management in Jupiter's private client division rose from £1.9 billion to £2.3 billion on the back of a £135 net inflow.

Fund fees

Bonham Carter will be replaced by Maarten Slendebroek next month and the new chief quelled the perception of Jupiter as a firm unwilling to offer discounts on its fund range.  

Slendebroek told analysts: ‘That’s not what we mean. In some cases, we are very keen to and do that. In other cases, we are less willing to compromise. We look at every situation as being unique.'

In particular, Slendebroek argued that fee discounts intended to boost inflows were inappropriate for capacity-constrained funds. ‘Straight-line discounts can be ill-advised for constrained strategies,’ he stated. However, he noted that none of Jupiter’s strategies were currently capacity-constrained.

Strategic growth opportunities

The results also revealed Jupiter had cleared its debt and is sitting on £160 million of cash, although once the 43% dividend increase is accounted for this will fall to around £80 million.

Jupiter is not ruling out using some of this cash for an acquisition, although the emphasis very much remains on organic growth.

Chief financial officer Philip Johnson told Wealth Manager: 'We have two options - investing in growth via a bolt-on acquisition or returning excess cash to shareholders.'

Bonham Carter added: 'Our longer term goal continues to be on building a business with a strong culture. Never say never though and if a business is available which is the right cultural fit we would consider our options.'  

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