Jupiter Asset Management’s private client and
charities division enjoyed its best year ever during 2009, says
Colin Chisholm, who oversees its activities. Ian Orton reports on
Jupiter’s plans for organic-led growth and the increasing
importance of the core affluent – clients with assets between £1m
and £2m.
The aftermath of 2008’s global financial crisis and the
wholesale collapse in asset values it precipitated should, in
theory at least, have posed a plethora of problems for private
banks and wealth management firms.
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This, however, was not the case at
London-based Jupiter Asset Management. Jupiter’s private client and
charities division garnered more net new money than ever before
during the year.
“We enjoyed our best year since the
firm’s establishment in 1985 and grew significantly, both in terms
of clients, net new money and staff and are currently firing on all
cylinders,” says Colin Chisholm, who heads Jupiter’s private client
and charities division.
“We grew assets around 30% during 2009
and now oversee around £1.4bn [$2.03bn] of client assets, or 7% of
the group’s total,” says Chisholm who joined Jupiter in 1996 after
time spent at Rothschild, Thornhill Investment Management and
Hambros Bank.
“On the charities side we won a significant
number of mandates, including one from the Joseph Rowntree
Foundation and have grown this side of the business
significantly.
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By GlobalDataMoreover, we are well positioned to take
advantage of the opportunities in the market, as investors who have
battened down the hatches during the financial storm are now
beginning to coming back.”
Recruiting rewards
During late 2008 and early 2009 Jupiter
expanded its infrastructure significantly by recruiting two groups
of investment managers. Robert Walker, Paula Forecast, Phil Gent
and Oliver Pearson-Lund joined from Kaupthing Singer &
Friedlander between November 2008 and January 2009.
Oliver Burns, William Day, David Blake and
William Luttrell-Hunt also joined from Bestinvest at around the
same time. This boosted Jupiter’s private client and charities
investment management team from 6 to 14. Over the past three years,
the overall headcount has grown from 10 to 23.
The private client and charities division
can also benefit from other investment managers within the
group.
“Jupiter has acquired an excellent
reputation for investment management,” says Chisholm.
“We have a number of managers, such as John
Chatfeild-Roberts, our chief investment officer (multi-manager);
Alex Darwell (Europe) and Philip Gibbs (financials) whose funds
regularly feature within the top decile in terms of performance and
whose expertise can be made available to help manage specialist
client mandates.
“We have a dedicated Socially Responsible
Investments team and the Merlin range of multi-manager funds,
managed by John Chatfeild-Roberts’s team are used extensively in
portfolio construction.
“More importantly, however, the
performance of our retail investment funds provides an obvious shop
window within the IFA community which looks set to become an
increasingly important source of business.”
Like an increasing number of its peers,
Jupiter has identified the so-called ‘core affluent’ market as an
increasingly important source of business.
Although it has clients with more than £20m of
assets with the firm, its core market tends to focus with clients
with between £1m and £2m of assets, a market segment in which IFAs
have a significant foothold, especially from a business
introductions perspective.
RDR leads reshuffle
Jupiter’s activities within this market
segment could increase further given the trends already apparent
within the UK wealth management markets. This is especially within
the context of the Retail Distribution Review, which will have a
fundamental impact on the manner in which IFAs conduct
business.
“A significant number of UK-based IFAs are
looking to outsource more of their investment management-related
activities to firms like Jupiter,” says Chisholm.
“This is especially the case as far as the
management of premium pensions, such as self-invested personal
pensions [SIPPs] are concerned.”
The UK’s relatively new premium personal
pensions regime, which came into force back in 2006, has already
provided additional impetus to the activities of firms like
Jupiter.
Nonetheless, not everything in this market
segment is so promising. According to Chisholm the new rules
relating to tax relief on high-earners’ SIPPs contributions looks
set to take some of the edge off the market.
In addition, a number of Jupiter’s established
peers, together with new entrants have also started to focus
increasingly on this market segment, rather than the rich or very
rich market segments.
“It is a very competitive marketplace
with relatively low barriers to entry,” continues Chisholm. “As it
is our ‘natural’ peer group, Sarasin, JO Hambro Investment
Management and Ruffer LLP are all increasing their activities in a
market segment that has often tended to be overlooked.”
Eyeing organic
Continued growth, however, remains on
the agenda.
“Our chief executive Edward Bonham Carter says
that private client and charities growth forms an important part of
Jupiter’s business objectives going forward with an onus on organic
growth, rather than merger and acquisition [M&A],” says
Chisholm.
“M&A invariably involves a significant
payment to goodwill. This is something the firm is not prepared to
do, although this does not rule out additional recruitment.”
Jupiter has also started to expand its
international presence in recent years, both company-wide and for
the private client and charities division. It established a private
client office in Jersey in 2007 and has opened another in
Bermuda.
At a company-wide level, Jupiter has
concluded a number of distribution agreements with firms around the
world.
In 2009, it entered into strategic alliances
with Alfi Partners, a leading third party fund marketing firm in
France and with de Vere and Partners, a global network of around
350 intermediaries that operate from 40 offices around the world to
distribute the Jupiter Global Sicav and Merlin Sicav.
“It’s not quite a case of shooting for
the stars,” says Chisholm. “But the future looks very
promising.”
