Fresh new money fails to halt Jupiter share slide

LONDON Fri Apr 11, 2014 10:11am EDT

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LONDON (Reuters) - Jupiter Fund Management (JUP.L) met market expectations with its trading update on Friday, posting fresh cash inflows and reaffirming the prospect of future payouts, though this failed to lure buyers in a broad market selloff.

The UK-based group said it took in 547 million pounds to boost total assets under management to 32.2 billion pounds ($54.02 billion), with inflows to bond and equity funds from both UK and international clients.

In a statement accompanying the results, Jupiter said inflows were spread across its fixed income funds, such as Strategic Bond and Dynamic Bond, and top-performing equity funds, such as UK Special Situations and UK Growth.

"Jupiter delivered a further 0.5 billion pounds of net inflows in the first quarter as we continue to expand our distribution network and product set," said Chief Executive Maarten Slendebroek in a statement.

"These flows came predominantly from our mutual fund franchise, which will continue to be the main driver of growth going forward following the recently announced disposal of our private client operations."

Jupiter was one of the main share price winners from last month's UK Budget, when changes to rules around pensions and savings led some in the market to expect even more money to join its funds as retirees would have more control over their money.

A gain of 5.5 percent in the weeks after that had all been lost by mid-session on Friday, however, as a global stock market retreat hit the growth-focused financials sector hard.

"The market's getting increasingly demanding, looking for positive surprises and what we got was a very in line statement," said RBC Capital Markets analyst Peter Lenardos.

With the bulk of analysts covering the stock, nine, holding a "strong buy" or "buy" recommendation, an inline report was not enough to counter the market weakness.

At 1240 GMT, shares in mid-cap Jupiter were trading down 4.4 percent in a 1.7 percent weaker FTSE mid-cap index .FTMC and against a median fall in its peer group of 2.3 percent, Thomson Reuters data showed.

"I think it's just sentiment-led. The headline numbers look OK but they're just getting dragged lower by the broader market sell-off," said Prime Wealth Group senior trader Dafydd Davies.

At the start of April, Jupiter sold its private client and charities operations to UK wealth manager Rathbone Brothers (RAT.L) in a deal valued at 43 million pounds.

On Friday, Jupiter said the deal would likely complete in the third quarter and that around 30 percent of the private client assets are held in collective vehicles run by Jupiter.

After the announcement of the Rathbones deal, analysts said the likelihood of Jupiter returning money to shareholders had increased.

In its statement, the firm, which is looking to expand its business overseas, said it was confident on the growth outlook and repeated the line from previous statements to "share the rewards" with investors.

Lenardos forecast in a note to clients that Jupiter would pay out a dividend of 16 pence per share in 2014 and there would likely be a special dividend in early 2015. ($1 = 0.5961 British pounds)

(Additional reporting by Sudip Kar-Gupta; Editing by Laura Noonan, Matt Scuffham and Andrew Roche)

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