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Jupiter Asset Management is gearing up for acquisitions in order to expand its investment offerings amidst challenges in the fund industry. With customers withdrawing their money, lower revenues, and pressure on costs, the company is looking to make strategic moves to stay competitive.

Matthew Beesley, the chief executive of Jupiter, revealed that the company has built up a war chest to fund potential acquisitions that would broaden their product range and customer base. He expressed the company’s openness to opportunities that would supplement their existing capabilities, whether through team lift-outs or boutique acquisitions.

The industry as a whole is facing significant challenges, with midsized companies like Jupiter, Abrdn, Artemis, and Liontrust grappling with outflows from funds and increasing competition from cheaper passive products. This has led to a trend of mergers and acquisitions as asset managers seek to broaden their revenues and offset costs.

Jupiter’s surplus capital has grown to £198.5 million, nearly four times the amount required by regulators. The company manages over £50 billion, with a focus on expanding its institutional client base while also appealing to retail investors.

While Beesley ruled out a larger-scale acquisition with a rival, he emphasized the importance of deploying capital into acquisitions that bring new investment talent without impacting the company’s cost base. Under his leadership, Jupiter has also focused on cost-cutting efforts, reducing staff numbers and merging funds to streamline operations.

Despite these efforts, the departure of key managers like Ben Whitmore has led to significant outflows from Jupiter’s funds. The company reported net outflows of £3.4 billion in the first half of the year, with concerns about further outflows from Whitmore-managed funds until his departure later in the year.

Overall, Jupiter Asset Management’s strategic approach to acquisitions and cost management reflects the broader challenges and opportunities facing the fund industry as it navigates changing market dynamics.