UPDATE 2-Jupiter's assets hit record $82 bln despite outflows

* Investment gains offset 4 bln stg in net outflows

* Shares rise 3%

* Total dividends 20.1 pence for the year (Adds analyst comment, share price, details)

LONDON, Feb 26 (Reuters) - Jupiter Fund Management’s assets hit a record 58.7 billion pounds ($81.8 billion) in 2020, as investment gains offset 4 billions pounds in net outflows, the British asset manager said on Friday.

Assets under management (AUM) rose from 42.8 billion pounds in 2019. Outflows were lower than the 4.2 billion pounds expected by analysts and down from 4.5 billion pounds in 2019.

Jupiter’s share price was up 3% at 0840 GMT.

“We made significant progress against our strategic objectives and laid strong foundations for future growth, despite the disruptive impact on financial markets and businesses brought by COVID-19,” CEO Andrew Formica said.

The second-largest provider of retail funds in Britain after the acquisition of Merian Global Investors last year, Jupiter also reinstated a special dividend of 3.0 pence per share for the year, after scrapping it in 2019. This took total dividends to 20.1 pence for the year.

Performance fees leapt to 73.6 million pounds from 7.9 million in 2019.

Jupiter, long considered a merger target in its own right, bought Merian to add scale and diversify its fund range, a move that analysts saw as defensive. The fund manager on Friday ruled out further acquisitions in the next few years.

Merian contributed 17 billion pounds to overall AUM, while it recorded most of the fund’s outflows in the second half of the year at 2.2 billion pounds.

“The business is still seeing outflows - reversing this is key to delivering sustained share price momentum,” Peel Hunt analysts said in a note.

Statutory profit before tax fell 12% to 132.6 million pounds, due to the integration and acquisition costs of Merian, the company said.

$1 = 0.7179 pounds Reporting by Clara Denina. Editing by Jason Neely and Mark Potter