Jupiter Fund Management snaps up Merian for £370m
Jupiter Fund Management today confirmed it has clinched a £370m deal to buy Merian Global Investors in what analysts have branded a “defensive” move.
Jupiter will become the world’s second largest retail funds manager after the acquisition in a sector where rising regulatory pressures have encouraged actively managed funds to band together.
“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,” Jupiter chief executive Andrew Formica said.
Jupiter’s shares rose eight per cent to 482.2p in early trading.
Shore Capital said the tie up “looks to be a defensive move”.
But Jupiter said the merger would speed up growth and diversify its range of funds.
Merian, which has suffered from poor performance and a high level of outflows, announced a big restructure in December before today’s acquisition.
“Unfortunately, recent large-scale M&A in UK asset management has not proved to be a value-creative event for investors,” Shore Capital added, “with both Henderson’s merger with Janus and Standard Life’s takeover of Aberdeen failing to generate positive returns for shareholders and failing to arrest negative net flows.”
“We think investors should start from a slightly sceptical position.”
But Jefferies analysts added: “While we think the deal has some defensive characteristics to it we can nevertheless see a broader strategic rationale given there are cultural similarities, it reinforces JUP’s core UK mutual fund franchise and it dilutes the concentration of assets under management in its largest funds.”
TA Associates, which helped launch Merian two years ago, will hold a 16 per cent stake in the combined company.
“Our substantial stake in the combined firm underlines our belief that this transaction will deliver significant strategic benefits and returns to shareholders,” managing director Chris Parkin said.