Aggregated fees mean rising margins for Jupiter

Calculating feesJupiter Fund Management’s half-year results this year point to rising margins for the firm, despite the expensive implementation of a “simplified” fee structure.

In October last year, the firm announced it intended to introduce aggregate operating expense fees in its Sicav fund range, and the structure was duly implemented in December.

Implementation was costly, helping push underlying administrative costs to £54.4 million (€64.7 million) in the first six months of this year, up from £45.6 million year-on-year.

The Group’s net management fee margin for the period was 87.6 basis points, up by 0.6 basis points on the second half of 2015. Management fees accounted for 92 per cent of revenue in the first half of 2016, compared with 88 per cent last year. However, Jupiter expects net management fee margins to decline by up to two basis points annually from next year, due to product mix reasons.

The new structure also meant net management fees increased to £156.5 million, up from £149.2 million year-on-year.

The first six months of this year has been a turbulent period for the UK asset management industry, with some funds posting their highest withdrawals since the financial crisis. Despite this, Jupiter posted modestly positive H1 results, with inflows of £600 million, assets under management increasing to £37.5 billion and pre-tax profit tax rising to £86.6 million – although chief executive Maarten Slendebroek said “heightened volatility” lay ahead.

The company also said there could be legal restructuring of continental European operations if a trade deal isn’t reached between the UK and EU.

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