Jupiter owns up to its star manager risk

FUND manager Jupiter yesterday admitted 38 per cent of its assets under management are reliant on just four individuals, posing a considerable risk to the success of its business in the event of any of them quitting.

The admission, contained in the float prospectus, comes after Jupiter emphasised to investors in pre-IPO marketing that its business was markedly different to that of rival Gartmore, whose share price took a hammering in December when star manager Guillaume Rambourg was subjected to an internal investigation.

Of Jupiter’s assets under management in December 18 per cent were under the remit of Tony Nutt, who manages the Jupiter Income Trust. A team of three fund managers under John Chatfeild-Roberts was responsible for a further 20 per cent in the global managed fund. And the financial opportunities fund, now under the management of Philip Gibbs and Guy de Blonay, is also responsible for a sizeable chunk of assets.

However, Jupiter argues that though assets under management are pooled under a few star individuals, its revenues are more broadly spread than at Gartmore and it is not reliant on a small number of “blockbuster” products.

The revelation came as Jupiter yesterday sliced a chunk off the expected price of its listing, reawakening fears that the group would have been better placed to delay the float until markets stabilise further.

Jupiter confirmed that the price range for the IPO has been set between 150p and 210p per share, translating into a market capitalisation of between £718m and £868m for the group. That contrasts with expectations just a few weeks ago that Jupiter could be valued at as much as £1.1bn, disappointing some staff whose stakes will be hit by the discount.

Jupiter plans to issue 122.4m new shares, raising around £220m assuming a mid-range price of 180p.

EDWARD Bonham-Carter has drafted in the big guns to try and ensure that Jupiter’s float goes as smoothly as possible, taking advice from the blue-bloods at JP Morgan Cazenove, from Bank of America Merrill Lynch and from boutique corporate finance adviser Lexicon Partners.

Tim Wise is heading the team at JP Morgan Caz, as vice chairman, co-head of corporate finance and head of the financial institutions group. He is flanked by Jonathan Wilcox, who has been advising the Prudential on its doomed purchase of AIA, and by Edward Squire.

Over at BoA Merrill Lynch, City veteran Mark Astaire, the co-head of corporate broking, is in the chair. Astaire, who is also currently advising National Grid on its £3.2bn rights issue, formerly worked under Nigel Mills and Peter Meinertzhagen at Hoare Govett. His father is Edgar Astaire, who founded the stockbroker of the same name, while his uncle is entertainment producer and boxing promoter Jarvis Astaire.

Astaire is joined by colleagues Rupert Hume-Kendall and Will Smith.

Jupiter also turned to boutique adviser Lexicon Partners, established ten years ago to focus on financial services, utilities, infrastructure and energy. Managing directors Joe Chambers and Charles Outhwaite are advising on the float.