- Market cheers news of acquisition
- Deal to boost earnings straight away
- Backdrop seems to be improving
Former fallen star Jupiter Fund Management (JUP) delivered investors positive news with the acquisition of specialist asset manager CCLA in a deal which it expects to be ‘materially accretive from day one’.
Jupiter shares, which just three months ago were languishing at multi-year lows of 70p, continued their rapid ascent with a gain of 13p or 12% to 121p.
‘COMPELLING’ DEAL
The £100 million purchase, which will be funded entirely from Jupiter’s cash reserves, brings on board the UK’s largest asset manager focused on the non-profit market, with AUM (assets under management) of more than £15 billion.
Jupiter, which celebrates its 40th anniversary this year, said the deal was ‘highly compelling from strategic, cultural and financial perspectives, delivering progress against multiple objectives’.
The CCLA brand will be maintained, along with the investment teams and client engagement model, to ensure continuity, and the purchase is expected to generate a material uplift in management fee earnings for Jupiter shareholders.
In addition, the firm has set an initial target for run-rate cost synergies on a fully-integrated basis of at least £16 million, which it expects to achieve by the end of 2027.
With almost 75% of the combined Group's £59 billion of AUM (as at 31 March 2025) sourced from clients based in the UK, the acquisition ‘helps us increase scale in our home market, where Jupiter is already a leading player, without any disruption to our existing clients,’ said chief executive Matthew Beesley.
‘This looks to be one of these deals that makes a lot of sense given the lack of crossover across the fund range, with CCLA having a clear specialism in the ethical investment and stewardship space,’ added AJ Bell investment analyst Dan Coatsworth.
TIDE TURNING FOR UK MANAGERS?
There was more positive news in the active asset management sector this week with a number of firms reporting either a slowing of outflows or a return of inflows.
Sustainable investment specialist Impax Asset Management (IPX:AIM) noted ‘a significant reduction in net outflows (for the three months to June) compared to the previous two quarters, with positive flows in June, reflecting strong institutional client commitments and fresh momentum in our wholesale channels in Europe’.
Meanwhile, Liontrust (LIO) reported flat assets under management and administration for the three months to June and said it had ‘begun to see investors, led by institutional clients, turn more towards actively managed funds and diversify geographically’.
Specialist manager Polar Capital (POLR) saw an 8% increase in assets in the three months to June, helped by strong performance, while net outflows slowed in its open-ended Technology fund and many of its other funds enjoyed inflows.
Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author (Ian Conway) and editor (Martin Gamble) of the article own shares in AJ Bell. The author also owns shares in Impax Asset Management.
