Jupiter has announced its proposition to acquire Merian Global Investors. Ryan Hughes, head of active portfolios at AJ Bell, comments:
“News that Jupiter is in talks to buy Merian will come as a surprise to many given that it was less than two years ago that Richard Buxton led a management buyout of his fund management business from Old Mutual, while Jupiter themselves have been touted as a possible bid target. However, the past 18 months have been tough for both businesses with outflows from flagship products that has provided a major hit to revenue with Jupiter losing Alexander Darwall from their European desk with assets following and Merian seeing their Global Equity Absolute Return fund shrink significantly with following weak performance.
Jupiter’s CEO Andrew Formica is no stranger to M&A activity from his time at Henderson and this move may take some of the heat off the business which has been suffering significant outflows in recent quarters. This potential deal would bring significant economies of scale and the potential for the enlarged business to streamline its product range with overlap and sub-scale funds across both fund ranges, particularly in UK, European and Asian equities.
Should this deal go through, it would continue the recent trend of active managers merging to try and drive cost savings through their businesses to take the fight back to passive managers who are making inroads in the market and attacking asset managers revenues.”