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Fund manager Jupiter reported a fall in assets under management amid 'challenging' market conditions as the Covid-19 pandemic had a 'significant' adverse impact on the economy and global financial markets including asset values.
Asset under management (AuM) as at 31 March 2020 was £35.0bn, a decrease of £7.8bn in the quarter, with the majority of the decline due to market movements, the company said.
Net outflows in the quarter were £2.3bn, led by £2.89bn of outflows from mutual funds, £2m from investment trust, while segregated mandates saw inflows of £575m in the quarter.
In light of the Covid-19 pandemic, Jupiter also lowered its expectations for potential synergies from the Merian group, the acquisition of which was expected to be put to a shareholder vote for approval on 21 May.
As a result of the decline in Merian group AUM, the estimated run-rate net management fees for the Merian Group as at 31 March 2020 were approximately £98m per annum, down from approximately £140m as at 31 December 2019.
Assuming no recovery or further declines in asset values and prudent assumptions for future client flows, the acquired business was now expected to have the potential to contribute a run-rate operating margin not below 40% following the completion of the integration of the Merian group's business and extraction of the anticipated cost synergies, on a fully phased basis.
That was below the previous forecast that the acquisition had the potential to contribute a run-rate operating margin not below 50%.