Jupiter Asset Management announces flotation plans
Jupiter Asset Management has announced plans for a stockmarket flotation in a move potentially valuing the group at up to £1 billion.
The firm said it intended to proceed with an initial public offering (IPO) to institutional investors and additionally, an intermediaries offer to retail investors in the UK.
It is aiming to complete the offer by June 2010, and said the listing would help strengthen the company's balance sheet.
TA Associates, the US private equity firm which owns a stake in the company, is expected retain a 20% stake when the group floats next month.
Jupiter, one of the UK's best known fund management firms, had assets under management of £19.5 billion as at 31 December.
It is hoping the listing will raise gross proceeds of about £220 million from new shares and from staff selling some of their shares. They will be allowed to sell up to 20 per cent of their holding and will be subject to phased lock-ins over three years. Proceeds will be used to expand and attract staff.
"The strength of Jupiter's investment culture has enabled us to attract and retain our talented team of fund managers and to deliver out-performance for clients through the market cycle. Flotation will further enhance our ability to achieve this objective for our growing client base and is the logical next phase in our evolution," chairman Jamie Dundas said in a statement.
Edward Bonham Carter, chief executive of Jupiter, said: "Jupiter has flourished over recent years, despite the challenges of the financial crisis. Strong new business growth has been built on the firm foundations of a robust investment culture and a well-established brand, resulting in resilient revenues and earnings.
"We have started 2010 in great shape with an encouraging outlook for our business and excellent opportunities for further growth, both in our core UK market and internationally."
The float could net more than £500 million for the group's 500 staff, including Bonham Carter and leading fund managers Tony Nutt, Philip Gibbs and John Chatfeild-Roberts.
The announcement comes after the postponement of a string of private equity-backed IPOs in the UK. It also follows the disappointing performance of rival fund manager Gartmore (GRT), whose shares were floated in December at 220p and now trade at about 144.6p, valuing it at £443 million.
As Jupiter's funds are largely managed for private and retail investors and its revenues come from a broader range of funds than Gartmore's, there is more reason to optimistic about the firm's success on the stockmarket.
An Initial Public Offering is the US equivalent of flotation, and is the first sale of equity in a private company in the form of shares (know as stocks in the US) to the public in order to raise capital to finance growth.
An individual employed by an institution to manage an investment fund (unit trust, investment trust, pension fund or hedge fund) to meet pre-determined objectives (usually to generate capital growth or maximise income) in prescribed geographic areas or investment sectors (such as UK smaller companies, technology or commodities). The manager also carries the responsibility for general fund supervision, as well as monitoring the daily trading activity and also developing investment strategies to manage the risk profile of the fund.
Flotation involves a company selling a percentage of itself in the form of shares on a regulated exchange, such as the London Stock Exchange. Prior to flotation, the company is independently audited and valued and shares offered for sale at a price determined by the company’s value. After flotation, the shares are traded on the exchange for what the market deems they are worth. Shares are bought by other financial institutions and private investors.