Jupiter Fund Management Plc · LSE:JUP
Jupiter Fund Management — FY2023 Earnings Presentation
44 slides from Jupiter Fund Management's earnings presentation, February 2024
Slide 1: Full Year Results 2023
JUPITER FUND MANAGEMENT PLC FULL YEAR RESULTS 2023 February 2024
Slide 2: Matthew Beesley, Chief Executive Officer
Jupiter fund management plc MATTHEW BEESLEY CHIEF EXECUTIVE OFFICER
Slide 3: A year of progress in a challenging environment
A year of progress in a challenging environment Robust set of financial results Risk-off client sentiment, but cause for optimism Investing for future growth Progress against strategic objectives 2
Slide 4: Management actions leading to robust performance
Management actions leading to robust performance £368.8m 7% Net revenue Net outflows (FY 2022: £(3.5)bn) £(2.2)bn Operating costs £264.6m 12% Underlying profit before tax £105.2m 36% Total ordinary dividends (FY 2022: 8.4p per share) 6.9p Underlying EPS 14.8p 31% Investment AUM £52.2bn 4%
Slide 5: Improved investment performance over all periods
Above median Improved investment performance over all periods Below median Potential lead indicator for flows One year Three years Five years 35% 34% 41% 36% 41% 41% 1st quartile 1st quartile 1st quartile 59% 65% 66% FY22 above median: 49% FY22 above median: 51% FY22 above median: 53% All figures sh
Slide 6: Weaker gross retail demand…
Weaker gross retail demand… Gross inflows (£bn) 20 £13.2bn 15 10 5 0 2020 2021 2022 2023 Retail, Wholesale & Inv. Trusts Institutional ● Consistent Institutional inflows ● Overall retail demand weaker in second half 5
Slide 7: Weaker gross retail demand… but improving overall net flows
Weaker gross retail demand… but improving overall net flows Gross inflows (£bn) Net flows (£bn) £(2.2)bn 20 2 £13.2bn 15 0 10 -2 5 -4 0 -6 2020 2021 2022 2023 2020 2021 2022 2023 Retail, Wholesale & Inv. Trusts Institutional Retail, Wholesale & Inv. Trusts Institutional Total ● Consistent Institutio
Slide 8: Moderating outflows but weaker in fourth quarter
Moderating outflows but weaker in fourth quarter Net flows (£bn) £(2.2)bn 2 ● Modest outflows for most of the year 0 ● Retail outflows increased through Q4 -2 ● Budgeting for broadly flat underlying flows in 2024 -4 -6 2020 2021 2022 2023 Retail, Wholesale & Inv. Trusts Institutional Total 7
Slide 9: Wayne Mepham, Chief Financial and Operating Officer
Jupiter fund management plc WAYNE MEPHAM CHIEF FINANCIAL AND OPERATING OFFICER
Slide 10: Financial performance in a challenging environment
Financial performance in a challenging environment Net revenue £368.8m (2022: £397.3m) 14.8p Underlying EPS (2022: 11.3p) Underlying profit before tax £105.2m (2022: £77.6m) Exceptional items £95.8m (2022: £19.6m) 6.9p Ordinary dividends (2022: Ordinary dividends of 8.4p) Statutory profit before tax
Slide 11: Increase in underlying profit before tax…
Increase in underlying profit before tax… 6.8 (31.4) 9.4 19.2 105.2 (95.8) 101.2 98.4 9.4 (23.6) 2 2022 Revenue Costs Other 1 2023 underlying 2023 2023 Exceptional costs 2023 statutory underlying PBT PBT performance underlying PBT PBT (ex pfees) fee impact 1Other includes gains/(losses) on seed inve
Slide 12: Movement in AUM
Movement in AUM… …December 2023 closing AUM up 4% over one year at £52.2bn 4.2 (3.5 ) (6.8) (2.2 ) 60.5 50.2 52.2 2022 Net flows Markets 2022 Net flows Markets 2023 opening AUM closing AUM closing AUM £52.4bn 2022 average AUM £50.9bn 2023 average AUM Average AUM is calculated using a 13-point basis.
Slide 13: Net revenues excluding performance fees of £356m
Net revenues excluding performance fees of £356m Total net revenue of £369m (26.8) (10.5) 13.2 5.9 387.0 355.6 368.8 2022 revenue Net flows 2022 markets 2023 markets 2023 revenue 2023 2023 revenue (ex-pfees) (ex-pfees) performance fees 70bps FY 2023 Net man. fee margin (2022: 74bps) £13m Performance
Slide 14: Maintaining rigorous cost discipline
Maintaining rigorous cost discipline….. …..combined with targeted investment for growth Expenses Compensation mix (excluding performance fees) Fixed staff costs Variable staff costs (£m) 2023 2022 Fixed staff costs 78.1 82.4 Variable staff costs1 79.2 104.5 – performance fee related 6.4 33.9 52% 46%
Slide 15: Maintaining rigorous cost discipline: compensation ratios
Maintaining rigorous cost discipline….. …..combined with targeted investment for growth Compensation ratios Fixed staff costs Variable staff costs (£m) 2023 2022 Fixed staff costs 78.1 82.4 Variable staff costs1 79.2 104.5 – performance fee related 6.4 33.9 52% 46% 48% Non-compensation costs 107.3 1
Slide 16: Maintaining rigorous cost discipline: fixed staff costs
Maintaining rigorous cost discipline….. …..combined with targeted investment for growth Fixed staff costs Fixed staff costs Variable staff costs (£m) 2023 2022 Fixed staff costs 78.1 82.4 Variable staff costs1 79.2 104.5 – performance fee related 6.4 33.9 52% 46% 48% Non-compensation costs 107.3 114
Slide 17: Maintaining rigorous cost discipline: compensation mix
Maintaining rigorous cost discipline….. …..combined with targeted investment for growth Compensation mix (excluding performance fees) Fixed staff costs Variable staff costs (£m) 2023 2022 Fixed staff costs 78.1 82.4 Variable staff costs1 79.2 104.5 – performance fee related 6.4 33.9 52% 46% 48% Non-
Slide 18: Maintaining rigorous cost discipline: supplier spend
Maintaining rigorous cost discipline….. …..combined with targeted investment for growth Supplier spend Fixed staff costs Variable staff costs (£m) 2023 2022 Fixed staff costs 78.1 82.4 Variable staff costs1 79.2 104.5 – performance fee related 6.4 33.9 52% 46% 48% Non-compensation costs 107.3 114.6
Slide 19: Delivering on growth opportunities
Delivering on growth opportunities Clear growth potential from established opportunities 2023 21% 42% 7% £99m Op. profit1 30% Employees Non-comp Tax Shareholders 1Operating profit stated before performance fee related and exceptional items. Tax at statutory rate of 25%. 18
Slide 20: Delivering on growth opportunities
Delivering on growth opportunities Clear growth potential from established opportunities Without ‘investment for growth’ 2023 19% 21% 6% 43% 42% 34% 7% £99m Op. profit Op. profit1 32% 30% Employees Non-comp Tax Shareholders Employees Non-comp Tax Shareholders 1Operating profit stated before perform
Slide 21: Delivering on growth opportunities
Delivering on growth opportunities Clear growth potential from established opportunities 2023 Illustrative example of 50% increase in AUM 21% 31% 35% 42% 7% £99m >200% Op. profit1 Op. profit2 10% 30% 24% Employees Non-comp Tax Shareholders Employees Non-comp Tax Shareholders Employees Non-comp Tax
Slide 22: Maintaining a strong capital position
Maintaining a strong capital position Provides investment opportunities and supports returns to shareholders Regulatory capital IFPR regime (£m) 31 Dec 2023 31 Dec 2022 Available capital resources 248.9 236.0 1 Regulatory requirement (71.8) (121.8) Expected capital surplus 177.1 114.2 ● 3.4p final d
Slide 23: Maintaining a strong capital position
Maintaining a strong capital position Provides investment opportunities and supports returns to shareholders Regulatory capital Seed capital IFPR regime (£m) £73m £35m 31 Dec 2023 31 Dec 2022 reinvested Available capital resources Dec ‘22 248.9 236.0 Regulatory requirement (71.8) 1 (121.8) £29m £121
Slide 24: Resilient performance despite headwinds
Resilient performance despite headwinds Opportunities to deliver growth through resilient business Financial results impacted by challenging conditions Strong cost discipline enables growth potential Benefits of future scale are clear Robust capital position provides stability and strategic opportun
Slide 25: Matthew Beesley, Chief Executive Officer
Jupiter fund management plc MATTHEW BEESLEY CHIEF EXECUTIVE OFFICER
Slide 26: Strategic objectives: increase scale, decrease complexity, broaden appeal, deepen relationships
INCREASE DECREASE BROADEN DEEPEN SCALE UNDUE OUR APPEAL RELATIONSHIPS COMPLEXITY TO CLIENTS WITH ALL STAKEHOLDERS …in select geographies …with costs managed …with a curated product …with purpose and and channels carefully through a offering, while also sustainability embedded relentless pursuit expl
Slide 27: Increase scale
Institutional 20% 19% 15% ‒ 19% of group AUM, £1.8bn net inflows, 10% £3.8bn over 2 years 5% ‒ Diversified book and pipeline across 0% strategy and region 2018 2019 2020 2021 2022 2023 Increase scale International 40% 34% 30% ‒ 34% of Group AUM, £1.1bn net inflows 20% ‒ Investment and prioritisation
Slide 28: Decrease undue complexity
Relentless focus on efficiency and value for money Decrease Decrease in non-comp costs since 2021 15% Reduction in total number of funds 25% undue complexity Institutional client reports automated >100 Total cost base investing for growth 19% 2024 and An agile, efficient business, but with scale t
Slide 29: Broaden our appeal to clients
Technology driven, holistic client experience Creation of Client Group Broaden our appeal to clients New vehicles for Catalyst funding New strategies Team lift outs existing for sub-scale in existing teams and new hires strategies strategies 2024 and Actively exploring new strategies and methods of
Slide 30: Deepen relationships with all stakeholders
Our people 78% people engagement score Deepen Introduction of Our clients tiered pricing relationships with all stakeholders £53m distributed Our shareholders to shareholders1 2024 and Continual, ongoing focus on all our stakeholders beyond: 1 Comprises 6.9 pence of Ordinary dividends paid or propos
Slide 31: Progress moving forwards
Progress moving forwards Industry challenges remain but strong underlying business Improvement in investment performance and short-term client risk appetite Progress against each strategic objective A stronger position from which to drive future growth 30
Slide 32: Questions
Jupiter fund management plc QUESTIONS
Slide 33: Appendix
a APPENDIX a JUPITER ASSET MANAGEMENT
Slide 34: Largest mutual funds performing well
Largest mutual funds performing well A more diversified, less concentrated business 3-year performance: Equities Fixed Income Multi-Asset Alternatives 5-year performance: Equities Fixed Income Multi-Asset Alternatives AUM at AUM at 4th 3rd 2nd 1st Dec 20231 Dec 20221 Quartile Quartile Quartile Quart
Slide 35: Funds with performance fees
Funds with performance fees Driven by strong investment performance Illustrative example AUM of all share classes with Performance Funds with performance fee Share class High Water Performance performance fee potential Share class vs. Benchmark/ Benchmark/Hurdle potential NAV Mark fee rate (£m) Hurd
Slide 36: Long-term incentive compensation
Long-term incentive compensation Estimated future long-term incentive compensation amortisation Amount remaining £m to expense 2024 2025 2026 2027 In relation to 2020 performance fees 0.2 0.2 - - - In relation to 2021 performance fees 0.3 0.3 - - - In relation to 2022 performance fees 1.1 0.7 0.3 0.
Slide 37: Non-compensation costs
Non-compensation costs (£m) 2023 2022 2021 AUM-related costs 48 58 70 Infrastructure 40 36 33 Other 19 21 23 Total non-compensation costs 107 115 126 36
Slide 38: Balancing strong cost discipline whilst investing for scale
Balancing strong cost discipline whilst investing for scale Cost base 19% Investing for growth Variable 58% 30% Fixed staff Fixed 42% 18% AUM-related 2023 cost base (ex pfees) 37
Slide 39: Illustrative examples of benefits of scale
Illustrative examples of benefits of scale Growth potential operational leverage from established opportunities 2023 with 10% increase in AUM with 25% increase in AUM 21% 24% 27% 40% 38% 42% 7% £99m >125% >150% Op. profit1 8% Op. profit2 Op. profit2 9% 30% 28% 26% Employees Non-comp Tax Sharehol
Slide 40: Management expectations for 2024
Management expectations for 2024 2024 Net management fee margin 66bps Performance fees c.£5m – £10m Fixed staff costs £79m Total compensation ratio (excluding performance fees) 47% Non compensation costs £111m Exceptional items £9m 1 Ordinary dividend pay-out ratio 50% 1Excluding the impact of all p
Slide 41: Proactive seeding portfolio
Proactive seeding portfolio Focused use of our balance sheet to support organic growth Seed size and length of investment Thematic funds 100% European Growth feeder fund Merlin Moderate Select 80% Global Sustainable Equities SICAV GEM ex-China % of fund held 60% European Smaller Companies Europe ex-
Slide 42: AUM by distribution channel
AUM by distribution channel Our assets reach us through a number of different channels AUM (£bn) ● The majority of our assets come through our distribution Advisory Discretionary Institutional Investment Trust partners and their associated intermediary channels rather than directly from our clients
Slide 43: Forward looking statements
Forward looking statements This presentation may contain certain “forward-looking statements” with respect to certain plans of Jupiter Fund Management plc (Jupiter) and its current goals and expectations relating to its future financial condition, performance, results, strategy and objectives. State
Slide 44: 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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