Jupiter Fund confirms ‘advanced’ talks to buy Merian Global
|Toronto Star 15 Feb 2020 at 19:38|
Jupiter Fund Management Plc confirmed it’s in advanced talks to acquire rival U.K. asset manager Merian Global Investors from private equity firm TA Associates Management.
“The board of Jupiter sees this as an attractive opportunity to acquire a high quality independent active manager that would represent a strong fit with Jupiter in both investment management philosophy and culture,” the company said in a statement Saturday.
Bloomberg had reported that talks were under way. Negotiations have been going on for “some time” and while the two companies are confident a tie-up would benefit stakeholders, there was “no certainty” that a final agreement would be reached, Jupiter, which has about 45 billion pounds ($77.8 billion) under management according to its website, said in the statement.
Representatives for Merian and TA Associates declined earlier requests for comment.
The talks come as active managers face increasing pressure to pair up amid heightened regulatory costs and intense competition from low-cost index and exchange traded funds. The idea is that bringing more assets onto a platform can help lower compliance, regulatory and back-office costs. London-based Jupiter, run by chief executive officer Andrew Formica since last year, has suffered seven straight quarters of outflows.
Competition for active managers has sent fees lower, led to thousands of job losses and forced large-scale consolidation among companies, with mixed results.
The Janus Henderson Group Plc and Standard Life Aberdeen Plc mergers were aimed at boosting assets but neither have been able to staunch outflows since their tie-ups. Banco de Sabadell SA also agreed in January to sell its asset-management business to Amundi SA for 430 million euros ($617 million). GAM Holding AG considered a sale of the company last year, Julius Baer Group Ltd. had plans to dispose of its asset manager Kairos, while a number of other banks have looked at options for their asset managers .
TA Associates, based in Boston, acquired Merian in 2018 from Old Mutual Ltd., the South African financial services conglomerate. Founded by U.K. veteran fund manager Richard Buxton, Merian had 22 billion pounds under management at the end of 2019, according to its website. Its biggest offerings are global and U.K. equities.
Before leading Jupiter, Formica built the former Henderson Group through dealmaking and eventually combined his firm with Janus Capital in 2017. He became co-CEO of the merged firm alongside Dick Weil. Formica departed the firm a year later after the board chose Weil as sole CEO.
Luring investors back to Jupiter could prove more difficult following star portfolio manager Alexander Darwall’s decision to set out on his own. He ran the flagship Jupiter European Fund as well as the listed Jupiter European Opportunities Trust Plc.