One of Britain’s best-known fund managers Richard Buxton will share in a windfall of up to £39m as Jupiter snaps up Merian
One of Britain’s best-known fund managers and his key allies are about to share a windfall of up to £39m as Jupiter snaps up Merian Global Investors.
Richard Buxton, who led the spin-out of Merian from Old Mutual in 2018, will together with four colleagues take a 1 per cent stake in asset manager Jupiter, currently worth £19m. The five top stock-pickers, including Buxton, Ian Heslop, Amadeo Alentorn Farre, Daniel Nickols and Richard Watts, will also bag up to £20m in Jupiter shares by 2025 if they hit performance targets.
Jupiter, which manages more than £42 billion of savers’ money, announced yesterday it had signed a deal to buy Merian for £370m. Alongside Buxton and his top staff, private equity firm TA Associates – which backed Buxton’s buyout of Merian and was the firm’s major shareholder – will take a 16 per cent stake in Jupiter.
Tidy sum: Richard Buxton will together with four colleagues take a 1 per cent stake in asset manager Jupiter, currently worth £19m
When Merian eventually combines with Jupiter, the entire firm will have around £65 billion of assets under management. The deal is the first under the leadership of Andrew Formica, Jupiter’s chief executive who took the reins from Maarten Slendebroek a year ago.
He said: ‘This is an exciting acquisition that enhances our position as a leading UK asset manager, provides increased scale and diversification into attractive product areas, and creates stronger future growth prospects for the business.’
Both companies are focused on the UK, and both employ fund managers who actively pick out what they believe will be top-performing stocks for investors.
But some analysts reckoned the deal was a defensive move by Jupiter to stem the tide of cash being withdrawn from its funds and prevent it being snapped up by a bigger rival. Ben Yearsley, director of Shore Financial Planning, said: ‘Ever since Andrew Formica joined Jupiter it was obvious corporate activity was on the cards. ‘Buy or be bought’ was clearly the mantra.
‘Gone are the days of small being better in fund management. Now seemingly big is better.’
However, Yearsley said that any cost-cutting which Jupiter manages to eke out of the acquisition must pass down to investors through lower fees and better performance in order for Jupiter to remain relevant.
Jupiter revealed yesterday that its investors had pulled £4.5billion more out of its funds last year than they had put in. Its profit before tax was also lower than in 2018, at £151m compared to £179m. Meanwhile Merian’s assets under management slipped from £28.8bn at the end of 2018 to £22.4 billion a year later.
■ In a further shake-up for savers, investment platform Interactive Investor announced it will buy rival The Share Centre for £61.9m in a cash-and-shares deal. Gavin Oldham, who founded The Share Centre, will make £4m in cash.