Jupiter Fund Management Plc · LSE:JUP
Jupiter Fund Management — FY2019 Earnings Presentation
34 slides from Jupiter Fund Management's earnings presentation, 2020
Slide 1: Full Year Results 2019
FULL YEAR RESULTS 2019 JUPITER
Slide 2: Results highlights
Results highlights Delivering growth through investment excellence Investment 72% 3 year mutual fund outperformance1 performance £42.8bn (Dec 2018: 77%) Net Outflows of £4.5bn AUM sales (2018: outflows of £4.6bn) (Dec 18: £42.7bn) 17.1p Net management Down 6% to £370.0m (2018: £395.7m) fees Ordinary
Slide 3: Competitive advantage
Competitive advantage Our purpose is to deliver performance after fees for our clients Three-year mutual fund performance Long-term performance record maintained over three years 11% ● 72% of AUM1 (Dec 2018: 77%) in mutual funds above median ● 88% of total AUM is Mutual Funds (Dec 2018: 86%) 38% 17%
Slide 4: Largest funds performing well
Largest funds performing well 10 funds over £1bn representing over 64% of invested assets1 AUM at AUM at AUM at 4th 3rd 2nd 1st Dec 2019 Jun 2019 Dec 2018 Quartile Quartile Quartile Quartile Dynamic Bond2 £7,019m £6,475m £5,391m European £4,887m £5,832m £5,076m Strategic Bond £4,158m £3,956m £3,635m
Slide 5: Wayne Mepham
Wayne Mepham F U L L Y E A R R E S U LT S 2019
Slide 6: Financial highlights
Financial highlights 2019 2018 Change Net management fees £370.0m £395.7m -6% Net revenue £379.1m £412.7m -8% Underlying profit before tax1 £162.7m £183.0m3 -11% Underlying EPS 28.8p 32.4p3 -11% Statutory profit before tax £151.0m £179.2m -16% Statutory EPS 27.5p 31.8p -14% Ordinary dividend 17.1p 1
Slide 7: 2019 AUM progression
2019 AUM progression AUM maintained at £42.8bn Movement in AUM (£bn) (3.0) 4.6 (0.5) 42.7 (1.0) 42.8 Dec-18 Mutual Funds Segregated Mandates Investment Trusts Investment Dec-19 Returns ● Mutual fund net outflows of £3.0bn, this includes a one-off transfer of assets to a segregated mandate of £0.5bn
Slide 8: Net flows by asset class for all products
Net flows by asset class for all products Fixed Income flows turned positive offset by outflows mainly from Equities (£bn) 8 ● Fixed Income flows have returned to a positive position in 2019 following the prior year outflows 6 ● Equity outflows have increased in the period primarily as a reaction to
Slide 9: Earnings
Earnings Progression in earnings (£m) (1) (26) 10 (12) (7) 4 183 163 151 2018 Box profits Net management Performance Non-compensation Other 2 2019 Exceptional 2019 1 Underlying PBT fees fees costs Underlying PBT items Statutory PBT ● Our continual focus on an efficient operating model allows us to u
Slide 10: Revenues
Revenues Lower average assets drove reduced revenues Net revenue £44.3bn (£m) 2019 2018 % +/- Net management fees 370.0 395.7 -6% Performance fees 7.9 14.9 Average AUM1 377.9 410.6 -8% Net initial charges2 1.2 2.1 83.6bps Net revenue 379.1 412.7 -8% Net management fee margin ● Decrease in net manage
Slide 11: Expenses
Expenses Operating expenses1 Operating expenses (£m) and % of net management fees (£m) 2019 2018 % +/- 190 45% 39% 39% Fixed staff costs 59.4 61.5 40% 170 34% 35% Other expenses 86.7 91.0 150 23 23 30% Operating expenses 146.1 152.5 -4% 130 23 25% Operating margin (%)2 43% 44% 110 20% 68 90 64 55 15
Slide 12: Non-compensation costs
Non-compensation costs Focus on cost discipline against headwinds Non-compensation costs development from 2018 to 2019 (£m) (3.0) (1.8) 0.5 91.0 86.7 2018 Refocused Reduced legal & Other 2019 marketing spend professional fee spend 11
Slide 13: Variable staff costs
Variable staff costs Variable staff costs Variable staff costs (£m) and variable compensation ratio (%) (£m) 2019 20183 % +/- 30% Cash bonus 24.3 27.1 130% 30% 30.0 26% Other variable compensation1 46.4 41.7 110% £83m £69m £71m 25.0 Variable staff costs 70.7 68.8 +3% 90% 20.0 Underlying variable 30%
Slide 14: Expenses
Expenses Expenses Expenses (£m) and total compensation ratio (%) (£m) 2019 20183 % +/- 34% 34% 35% Fixed staff costs 59.4 61.5 250 32% Variable staff costs 70.7 68.8 30% Compensation costs 130.1 130.3 25% 200 Non-compensation costs 86.7 91.0 20% 130 130 Total costs 216.8 221.3 -2% 137 150 15% Total
Slide 15: Capital allocation framework
Capital allocation framework Supporting the future growth of the business alongside returns to shareholders CAPITAL ALLOCATION FRAMEWORK Additional Opportunities returns to Organic Ordinary for accelerated shareholders growth dividends growth through a special dividend ● Prioritise allocation of ● T
Slide 16: Proactive seeding portfolio
Proactive seeding portfolio Focused use of our balance sheet to support organic growth Seed size and length of investment GEM short duration bond (£112m external holding) 120% 100% 75% Global High Yield SD Bond 50% 100% Eurozone Equity 25% Jupiter Flexible 0% Macro 80% Sep-17 Dec-17 Jun-18 Dec-18 Ju
Slide 17: Robust capital position
Robust capital position Our overall capital management policy remains unchanged Regulatory capital Ordinary dividend maintained (pence per share) (£m) 2019 2018 Ordinary shareholder funds 612 624 Less: Goodwill and intangible assets (347) (347) Tangible capital 265 277 15.5 11.4 Less: Dividends decl
Slide 18: Andrew Formica
Andrew Formica F U L L Y E A R R E S U LT S 2019
Slide 19: Jupiter – an independent, active fund manager
Jupiter – an independent, active fund manager Clear and consistent investment identity for 35 years Active funds management is in our DNA Provide an optimum environment for talented, high conviction managers Client centred approach embedded in all we do Our long standing success in UK retail channel
Slide 20: Jupiter investment identity
Jupiter investment identity Reasons for an active high-conviction approach Client demand for Active Specialties remains healthy ● Client demand trends remain encouraging $102tn AUM ● Long-term performance potential Solutions: 16% ● Passive guarantee 100% of the downside $74tn AUM Alternatives: 18% ●
Slide 21: Strategic priorities
Strategic priorities ● Consistently deliver strong investment performance and outcomes for clients ● Continue diversifying the business by client type, investment strategy and geography ● Attract, develop and retain high-quality talent aligned with our culture ● Expand the range of active investment
Slide 22: Merian: high-conviction active asset manager
Merian: high-conviction active asset manager Client reaction has been positive showing understanding and support for the rationale Richard Philbin, CIO, Wellian Investment Solutions: Ryan Hughes, head of active portfolios, AJ Bell: “There is a lot of quality in the investment management “This potent
Slide 23: Increases Jupiter's capacity to invest in additional future growth initiatives
Increases Jupiter’s capacity to invest in additional future growth initiatives 1 2 INVESTMENT MANAGEMENT CLIENT OFFERING AND ● Enhances Jupiter’s position as an 3 attractive home for leading SERVICE investment talent - both individuals OPERATING and teams ● Strengthened UK retail base allows PLATFOR
Slide 24: Data Science at Jupiter
Data Science at Jupiter Building our capability; talent, technology & data Talent Technology Data ● Data science ● Limited application of ● Investment desks Then conceptual cloud technologies for empowered to use the data science and data they need analytics ● Team of six comprising ● Cloud solution
Slide 25: Delivering growth through investment excellence: Goals for 2024
Delivering growth through investment excellence GOALS FOR 2024 To be consistently To be achieving top Our client reach, our Together these will achieving superior quartile net new investment capabilities lead to a significant investment money growth and our client channels increase in both our perfo
Slide 26: Q&A
Q&A JUPITER
Slide 27: Forward looking statements
Forward looking statements This presentation may contain certain “forward-looking timing, impact and other uncertainties of future acquisitions or statements” with respect to certain plans of Jupiter Fund combinations within relevant industries; and the impact of Management plc (Jupiter) and its cur
Slide 28: Appendix
Appendix
Slide 29: Overview of Jupiter
Overview of Jupiter A leading, high conviction, active asset management business Assets under management Employees Product and performance UK brand £43bn 527 12 #7 AUM as at Dec-19, with FTEs as at 31-Dec, of which investment strategies, with Position against UK peers2 88% 75 72% Top 10 in mutual fu
Slide 30: Merian: high-conviction active asset manager
Merian: high-conviction active asset manager Largely UK retail client base with strength in UK and global systematic equities Assets under management Employees Key financials £22bn 233 £140m £66m AUM as at Dec-19, with FTEs as at Dec-19, of which Dec-19 run-rate net FY19 EBITDA3 management fee reven
Slide 31: AUM by distribution partner
AUM by distribution partner Our assets reach us through a number of different channels AUM (£bn) ● The majority of our assets come through our distribution partners and their associated intermediary channels rather than directly from our clients 42.7 42.8 ● The line between advisory and discretionar
Slide 32: Successful diversification
Successful diversification Changing asset base over the last five years Split of AUM by asset class (£bn) Split of AUM by client geography (£bn) 42.8 42.8 31.9 31.9 2014 2019 2014 2019 Equities Fixed Income Multi Asset Alternatives UK Europe Asia RoW 31
Slide 33: Net flows by region
Net flows by region Outflows centred around a single product Net flows (£bn) 8 ● 2019 has seen Dynamic Bond return to positive flows in all regions following outflows in 2018 ● Gross sales continue to be strong with inflows of £13.4bn 6 across all products ● In the UK, outflows for 2019 are concentr
Slide 34: Jupiter Asset Management Limited
Jupiter Asset Management Limited The Zig Zag Building, 70 Victoria Street London, SW1E 6SQ, United Kingdom T: +44 (0)20 3817 1000 F: +44 (0)20 3817 1820 @jupiterAM_UK Jupiter Asset Management Jupiteram.com
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