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Why it makes 'financial sense' for Jupiter to sell its wealth arm
by Dylan Lobo on Jan 13, 2014 at 10:00
In the March of the following year, Bonham Carter told Wealth Manager: ‘Our private client operation has been growing well recently. Late last year, we more than doubled the number of private client fund managers in our team as we expect this to be a key area of growth.’
In September 2012, Jupiter recruited Schroders’ Andrew Clark to lead the private client business and steer it through its next growth phase.
However, the division continues to very much play second fiddle to the funds arm.
In Jupiter's last trading update covering the three months to 30 September the private client division held £2.2 billion in assets under management and registered a net inflow of £15 million.
This compared to an inflow of £278 million in the funds business, which held £23.3 billion in assets.
McCann, who repeated his add recommendation and 436p price target on the stock, said it is important Jupiter's asset management business keeps a portion of the private client mandates following a disposal.
'We estimate the private client fund's under management (FuM) is as much as on third invested in Jupiter funds,' he said.
'The terms of any deal will need to make it clear as to the likelihood of Jupiter therefore maintaining some of the FuM (and thus some revenue) within the other parts of the group (i.e. mutual funds and investment trusts) and any potential unwind period of this.'
At 10am shares in Jupiter were trading at 388.5p, a gain of 0.91%.
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