Jupiter to buy Merian and create second-biggest UK retail fund manager
Combined group to have £65bn of assets
Jupiter Fund Management has agreed to buy Merian Global Investors, bringing together two of the UK’s most popular investment groups among retail customers.
Jupiter’s board confirmed over the weekend it was in advanced discussions with its smaller rival, which is best known for its stockpicker Richard Buxton, and announced on Monday that it had agreed a deal.
Under the announced terms, Jupiter would pay £370m for Merian through the issue of new shares, with Man additional £20m to be paid to Merian’s main shareholders — including Mr Buxton — as part of a deferred earn-out plan.
The combined group would have £65bn of assets, creating the second-biggest manager of retail funds in the UK.
“This is an exciting acquisition that enhances our position as a leading UK asset manager, provides increased scale and diversification into attractive product areas, and creates stronger future growth prospects for the business,” Andrew Formica, Jupiter’s chief executive, said. “It is also consistent with our strategic priorities, adding strong investment talent with a similar culture and investment philosophy.”
TA Associates supported a management buyout of Merian from Old Mutual Wealth just over two years ago for £600m, but Merian’s assets under management fell by £7bn last year, with heavy outflows from its Global Equity Absolute Return Strategies fund accounting for most of the drop.
Chris Turner, an analyst at Berenberg, said the deal was more tactical than strategic. “An acquisition of Merian would do little to broaden Jupiter’s distribution footprint or product offering in our view, but — at the right price — it would likely provide a tailwind to Jupiter’s medium-term earnings,” he said. “This may help ‘buy time’ for management’s organic growth initiatives to bear fruit, or for Jupiter to find further — more strategic — M&A options.”