Jupiter Fund Management Signals Turnaround in Earnings Call

Jupiter Fund Management ((GB:JUP)) has held its Q4 earnings call. Read on for the main highlights of the call.

Jupiter Fund Management’s latest earnings call struck a notably upbeat tone, with management pointing to a sharp turnaround in investment performance, record gross flows, and the first year of net inflows since 2017. At the same time, executives acknowledged that elevated costs, fee margin pressure, and performance‑fee volatility still weigh on profitability, leaving the recovery story promising but not yet complete.

Dramatic Improvement in Investment Performance

Jupiter highlighted a step‑change in investment results, with 84% of assets under management beating peer medians over one year, a 42‑point jump. Nearly 70% of AUM now sits in the top quartile over one year, while 3‑ and 5‑year outperformance has risen to 68% and 75% respectively, with more than 60% of assets in the top quartile over five years.

Record Gross Flows and Return to Net Inflows

Client demand has clearly turned, as gross flows reached a record £16.9 billion in 2025 and net inflows hit £1.3 billion, the first positive calendar‑year figure since 2017. Institutional investors provided £1.0 billion of net inflows, while retail delivered £0.3 billion and generated more than £2.0 billion of net inflows in the stronger second half.

Rebounding AUM and Scale Expansion

Assets under management rebounded from an April low of £43 billion to £54 billion at year‑end, a near 19% year‑on‑year rise and over 12% above the 2025 average. Including the CCLA acquisition, Jupiter now oversees more than £70 billion, with end‑year AUM nearly 20% higher than at the start, giving the group greater scale and earnings potential.

Performance Fees Boost 2025 Profits

Performance fees were a major earnings driver, producing £120 million of revenue in 2025 and far exceeding earlier guidance. Management underscored its shareholder‑friendly stance by pledging to distribute half of those fees, or £60 million, directly to investors, underlining how performance‑linked income can turbocharge results in strong markets.

Cost Savings Delivered Ahead of Schedule

The cost‑cutting programme is gaining traction, with non‑compensation expenses £11 million below expectations and £6 million better than the latest guidance. Jupiter achieved its full‑year non‑compensation savings target more than a year early, helping reduce overall operating costs by £5 million versus 2024 when stripping out performance‑fee effects.

Strategic and Diversifying Acquisitions

Jupiter pushed ahead with acquisitions to diversify revenues, notably completing the CCLA deal which brings £15 billion of AUM and a new nonprofit client base with no overlap to existing customers. The group also added the Origin Asset Management team and a European equities team, enhancing its investment toolkit and adding inorganic scale.

Robust Shareholder Returns and Capital Discipline

Capital management remained a central theme, with additional distributions of £60 million from 2025 performance fees, split between a £30 million buyback and a 5.7p special dividend. Together with a 4.4p ordinary dividend, total distributions reached 15.8p per share, and since 2022 Jupiter has cancelled over 7% of its issued share capital.

Efficiency Gains and Strong Workforce Engagement

Operationally, Jupiter now runs with its lowest headcount since 2014 while maintaining a larger investment team than a decade ago, signalling leaner support functions. Employee sentiment has improved sharply, with engagement scores climbing to 88%, nine points higher than last year and nine points above the wider financial services benchmark.

Elevated Cost-Income Ratio Remains a Challenge

Despite progress, the cost/income ratio stood at 82% in 2025, still well above the firm’s 70% target and a key constraint on margins. Management reiterated its aim to move materially closer to 70%, but investors should expect the ratio to stay relatively high in the near term as the business invests for growth.

Lower Average AUM and Fee Margin Pressure

Average AUM fell around 5% in 2025 to £48 billion, which weighed on recurring fee revenues despite the year‑end recovery in balances. The net management fee margin slipped to 65 basis points for the year, with a 64‑bps run‑rate at December, and guidance signals a further drift to about 63 bps in 2026, excluding CCLA.

Volatile and Concentrated Performance Fees

Management stressed the unpredictability of performance fees, which jumped to £120 million in 2025 but are guided to a conservative £20 million baseline for 2026. That swing underlines how dependent yearly profits can be on a relatively concentrated set of outperforming strategies and on favourable market conditions.

Short-Term Rise in Compensation Ratio

Total compensation costs reached 50% of net revenue in 2025, above the historical 45–49% range and adding pressure to margins. This was driven largely by accounting effects linked to the share price, and Jupiter expects the compensation ratio to fall by about two percentage points in 2026, toward roughly 48%.

CCLA Performance Softness and Potential Outflows

While CCLA adds attractive scale and a new client base, its flagship charity fund has lagged benchmarks in recent years after a long run of prior outperformance. Management is taking a cautious stance and is factoring in minor potential outflows from CCLA strategies through 2026 as performance is addressed and client messaging is refreshed.

Acquisition and Integration Costs Weigh on Near Term

Dealmaking has near‑term costs, with acquisition‑related exceptional charges of £6 million already recorded in 2025 and more to come. For 2026, Jupiter expects around £14 million of cash exceptional items, net cash integration costs of roughly £17 million, and a non‑cash intangible amortisation charge of about £5 million per year once finalised.

Modest Underlying Profits Without Performance Fees

The underlying earnings picture remains modest when performance fees are stripped out, with profits of £62 million and earnings per share of 8.7p on that basis. That compares with EPS of 19.4p including performance fees, underscoring how sensitive overall profitability is to the realisation of variable, market‑linked revenues.

Shift Toward Lower-Margin Business Mix

Growth is increasingly coming from lower‑fee parts of the platform, such as systematic and other lower‑margin strategies, which dilutes the blended fee rate. While this mix shift can add stability and scale, it places short‑term pressure on revenue per pound of AUM and makes cost discipline even more critical to protect margins.

Guidance Signals Cost Discipline and Measured Growth

Looking ahead to 2026, management reaffirmed its 70% cost/income ambition and outlined at least £15 million of targeted savings plus CCLA synergies expected to reach a £16 million run‑rate by end‑2027, with about £4 million in 2026. Fee margins are guided to around 63 bps on average, performance fees to a cautious £20 million, and CCLA is expected to generate about £32 million of compensation costs and £20 million of non‑comp costs over 11 months, while capital remains strong enough to support ongoing dividends and buybacks.

Jupiter’s earnings call painted the picture of a firm emerging from a difficult period with better performance, stronger flows, and a larger, more diversified platform. Yet the investment case still hinges on executing cost cuts, integrating acquisitions, and proving that improved performance can translate into sustained, fee‑rich growth in the years ahead.