Jupiter: new management counts lucky stars as results surprise

Jupiter is the biggest planet in the solar system. But the eponymous asset manager is shrunken and drifting. The London-listed company’s share price is down more than three-quarters from its 2018 peak. Better than expected full-year results on Friday hint at a return to relevancy.

Last year, new chief executive Matthew Beesley replaced Andrew Formica. Formica promised big things for Jupiter, but left its orbit after just three years. Beesley had the good fortune to take charge at the beginning of October, just as world stock markets rebounded and bond prices settled. His short-term goals are to shrink bloated costs and decrease complexity by focusing on fewer, more profitable products.

After a bad year for markets, Jupiter’s assets under management have declined. With those go revenues and profits. Even excluding exceptional costs relating to the 2020 purchase of fund managers Merian Global, profits before tax dropped nearly two-thirds to £77.6mn. It is a measure of the market’s pessimism on Jupiter that analysts had anticipated about a fifth less and the shares bounced, rocketing up 9 per cent.

A sizeable increase in long promised inflows from institutional clients adds a dash of cheer. These climbed £2bn last year when the rest fell. Jupiter could finally show a shift away from its dependency on retail clients who are responsible for most of the outflows in its important UK and European Growth funds.

After the shares climbed 43 per cent in six months, Jupiter trades on a lowly forward price to earnings multiple of 11 times. If all was well, one would expect a mid-teens multiple, thinks Panmure Gordon. Yet thinly traded shares mean there is no reason to get overly excited about the market reaction to a spark of good news.

Yes, there are signs of progress. But Jupiter’s new team must prove conclusively that its poor run of form has reversed for good.