A former board member at Jupiter has criticised the fund house, saying it has ‘lost its way’ and needs to change its management and strategy.
Jon Little, who was a non-executive director at Jupiter between 2011 and 2016 has written an open letter to chairwoman Nichola Pease, urging her to take action.
Little took aim at Jupiter’s chief executive Andrew Formica, saying his appointment was a “mistake”, and the selection process was undertaken with “undue haste and without proper consideration of the risks involved”.
He also suggested the company's drop in share price seen over the past few years was “self inflicted” and that the acquisition of Merian should never have happened.
“The firm has consistently suffered net redemptions…and has struggled to maintain business performance...despite the continuation of one of the longest bull markets in history," he said.
Little said it is the board’s job to urgently come up with a plan to address these issues, saying a change in management and revised strategy is the ‘minimum’ level of action shareholders should expect to see.
He added that he has voted against the re-election of Formica as a director.
Jupiter has not seen net inflows into its funds since 2017, with investors pulling £3.8bn overall from its funds last year, despite £16.5bn in gross inflows.
Its share price has been consistently lower in recent years, dropping 63 per cent in the five years to April 29.
This has led to speculation over its vulnerability to a takeover, though earlier this year Formica said he does not see any M&A on the horizon for the firm.
In the letter, seen by FTAdviser, Little said he thinks much of the M&A in the asset management sector is ‘poorly thought through’ and often undertaken to ‘mask the weakness of the acquiring business’.
“A generalist firm buying another generalist firm, with a poor recent performance history, an unstable platform and trying to integrate it without any prior experience of doing so, is just about as bad as it gets.
“This is how I would characterise the Merian acquisition,” he said.
Jupiter acquired fellow fund house Merian Global Investors in 2020 for £370mn.
When asked about the letter, a spokesperson for Jupiter said: “We listen to and respect the views of our shareholders and will respond to Little directly.
“We have a clear, consistent strategy which we are focused on executing.
“ We are confident that we have the right foundations in place to deliver on this, underpinned by our strong capital position.”
sally.hickey@ft.com
