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SOWING THE SEEDS
FOR A BRIGHTER OUTLOOK
JUPITER FUND MANAGEMENT PLC
Annual Report and Accounts 2021
STRATEGIC REPORT
2 Our purpose and cultural pillars
4 Our business
6 Our business model
8 Chairman’s statement
10 Chief Executive Officer’s review
13 Market trends
14 Forward thinking
16 Our strategic priorities
18 Our key performance indicators
20 Chief Financial Officer’s review
28 Focused conviction
Strategic and operating review:
30 Investment management
32 Product and distribution
34 Diverse perspectives
Active responsibility:
36 Our people and culture
40 ESG and stewardship
57 Non-financial information
58 Engaging with our stakeholders
60 Our approach to risk management
GOVERNANCE
68 Chairman’s introduction to governance
71 Compliance statement
72 Board of Directors
74 Executive Committee
76 Our governance framework
83 Board effectiveness
86 Nomination Committee report
91 Audit and Risk Committee report
102 Remuneration Committee report
106 Annual report on remuneration
127 Directors’ report
131 Directors’ responsibility and
compliance statements
FINANCIAL STATEMENTS
132 Group financial statements
136 Notes to the Group financial statements
165 Company financial statements
167 Notes to the Company financial statements
172 Independent auditors’ report
OTHER INFORMATION
180 Historical summary (unaudited)
181 The use of Alternative Performance Measures
184 Shareholder information
185 Glossary of terms
CONTENTS
FINANCIAL KPIs
1
OTHER KEY METRICS
Net management fees
£453.7m
2020: £384.0m
Assets under management
£60.5bn
2020: £58.7bn
Dividends
17.1p
2020: 20.1p
Surplus capital over
regulatory requirements
£117m
2020: £111m
Underlying earnings per share
31.7p
2020: 28.7p
Total shareholder return
(2)%
2020: (27)%
NON-FINANCIAL KPIs
Investment performance
58%
2020: 70%
Net flows
£(3.8)bn
2020: £(4.0)bn
Sowing the seeds for a brighter outlook
Spring. It’s the time of regeneration and growth. It is
also the opportunity to look ahead, and consider
how we can incite positive change. But for the roots
of our business to be both strong and flexible, we
must put our heads together in collaboration. We
call this advantage ‘the value of active minds’. It is
something that permeates every aspect of Jupiter,
helping us to remain resilient, to think and to
debate, and to support a responsible and
sustainable approach to investment.
1. More details on the Group’s use of Alternative
Performance Measures (APMs) can be found on
pages 181 to 183.
The value of
active minds is:
Seeing tomorrow’s
trends today.
FORWARD THINKING
> See page 14
Decisions that spark
long-term opportunities.
FOCUSED CONVICTION
> See page 28
The ability to be agile,
entrepreneurial and flexible.
DIVERSE PERSPECTIVES
> See page 34
1
Jupiter Fund Management plc | Annual Report and Accounts 2021
OUR PURPOSE AND CULTURAL PILLARS
STRATEGIC REPORT
Jupiter has a clear purpose and set of cultural pillars, underpinned
by our belief in the value of active minds and the importance
of our clients being at the centre of everything we do.
OUR
PURPOSE
We exist to help our clients achieve
their long-term investment objectives.
CLIENTS
At Jupiter, our clients are our focus and our priority. We are
dedicated to serving our clients and put their interests at the
centre of our business.
We have deep relationships that enable us to understand
what our clients want from us and we engage continuously
with them to ensure we deliver to their expectations.
Our commitment to active asset management is a driving
force. Our fund managers have the freedom to pursue their
own investment style within a collegiate environment with a
shared commitment to sustainability.
Our distinct, entrepreneurial culture encourages independence
of thought and individual accountability. This enables our fund
managers to follow their convictions and seek those
investment opportunities that they believe will ensure the
best outcome for our clients.
SOCIETY
Our value to society lies in being responsible stewards of our
clients’ assets, carefully deploying capital and increasing the
value of our clients’ savings. We understand that active fund
management is not only about financial results, but also about
successfully identifying sustainable businesses that create
value for both society and shareholders. We believe these
companies have better long-term growth prospects, which
also delivers benefits for our clients.
Our fund managers engage with our investee companies to
help drive improvement in governance and encourage
initiatives that could be beneficial for both the firm and
broader society.
Our fund manager-led approach to stewardship differs by
strategy and asset class, but is always centred on improving
client outcomes.
As long-term investors, our fund managers create sustained
and effective relationships with investee companies’
management, which enables more meaningful and relevant
engagement.
EMPLOYEES
We believe that our value is in our people, whatever their role
in the organisation. We encourage collaboration, debate and
diversity. Our employees have the freedom and support they
need to perform at their best, to challenge and be open to
challenge.
When we recruit, we look for talented people to build a
diverse workforce. We consider diversity and inclusion at a
Group-wide level and firmly believe that fostering a culture
which embraces differences among people creates a stronger
and more sustainable business. Through this commitment to
improving diversity, we actively promote independence of
thought.
Jupiter is committed to developing its people through its
talent and learning programmes. We strongly encourage
employee share ownership and provided free Jupiter share
awards to all staff in each of the last three years, aligning the
interests of employees and shareholders, which will ultimately
benefit our clients.
SHAREHOLDERS
Through our unwavering focus on meeting the needs of our
clients and achieving superior investment performance, we
strive to generate net inflows and drive the growth of the
business.
Combining growth through top quartile net new business with
rigorous financial discipline will lead to strong financial
performance. Along with a carefully managed capital base, this
will deliver strong total returns for our shareholders.
THE VALUE OF
ACTIVE MINDS
We believe that generating sustainable
long-term outperformance for our
clients, in a complex and challenging
world, requires diversity of thought and
mindset in all its aspects. The ability to
be agile, entrepreneurial and adaptable
to solve problems is a human quality.
This is why our approach fosters real
diversity of thinking, accountability,
collaboration and a willingness to be
challenged. We seek to be flexible and
change as circumstances and our
environment evolve around us.
We believe that a combination of
experience and creativity, as well as
a commitment to keep listening and
learning across all of our business,
enables us to deliver for our clients and
make a positive difference in the world.
We call this advantage
THE VALUE OF
ACTIVE MINDS.
2
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
WE EXIST TO HELP OUR CLIENTS
ACHIEVE THEIR LONG-TERM
INVESTMENT OBJECTIVES
OUR
PURPOSE
We exist to help our clients achieve
their long-term investment objectives.
CLIENTS
At Jupiter, our clients are our focus and our priority. We are
dedicated to serving our clients and put their interests at the
centre of our business.
We have deep relationships that enable us to understand
what our clients want from us and we engage continuously
with them to ensure we deliver to their expectations.
Our commitment to active asset management is a driving
force. Our fund managers have the freedom to pursue their
own investment style within a collegiate environment with a
shared commitment to sustainability.
Our distinct, entrepreneurial culture encourages independence
of thought and individual accountability. This enables our fund
managers to follow their convictions and seek those
investment opportunities that they believe will ensure the
best outcome for our clients.
SOCIETY
Our value to society lies in being responsible stewards of our
clients’ assets, carefully deploying capital and increasing the
value of our clients’ savings. We understand that active fund
management is not only about financial results, but also about
successfully identifying sustainable businesses that create
value for both society and shareholders. We believe these
companies have better long-term growth prospects, which
also delivers benefits for our clients.
Our fund managers engage with our investee companies to
help drive improvement in governance and encourage
initiatives that could be beneficial for both the firm and
broader society.
Our fund manager-led approach to stewardship differs by
strategy and asset class, but is always centred on improving
client outcomes.
As long-term investors, our fund managers create sustained
and effective relationships with investee companies’
management, which enables more meaningful and relevant
engagement.
EMPLOYEES
We believe that our value is in our people, whatever their role
in the organisation. We encourage collaboration, debate and
diversity. Our employees have the freedom and support they
need to perform at their best, to challenge and be open to
challenge.
When we recruit, we look for talented people to build a
diverse workforce. We consider diversity and inclusion at a
Group-wide level and firmly believe that fostering a culture
which embraces differences among people creates a stronger
and more sustainable business. Through this commitment to
improving diversity, we actively promote independence of
thought.
Jupiter is committed to developing its people through its
talent and learning programmes. We strongly encourage
employee share ownership and provided free Jupiter share
awards to all staff in each of the last three years, aligning the
interests of employees and shareholders, which will ultimately
benefit our clients.
SHAREHOLDERS
Through our unwavering focus on meeting the needs of our
clients and achieving superior investment performance, we
strive to generate net inflows and drive the growth of the
business.
Combining growth through top quartile net new business with
rigorous financial discipline will lead to strong financial
performance. Along with a carefully managed capital base, this
will deliver strong total returns for our shareholders.
OUR
CULTURAL PILLARS
WE PUT CLIENTS FIRST
A focus on serving our clients
and a commitment to delivering
superior performance after
fees is central to why we exist
as a business.
WE VALUE OUR PEOPLE
Independence of thought and
individual accountability define
us. We believe that diversity in
people and freedom to think and
act differently will set us apart.
WE SUCCEED TOGETHER
Only collectively, by working
together as one team, can
we meet our individual and
business goals.
WE CHALLENGE OURSELVES
We encourage open debate,
innovation and continuous
improvement.
3
Jupiter Fund Management plc | Annual Report and Accounts 2021
WHO WE SERVE
CLIENTS
We exist to help our clients achieve their
long-term investment objectives.
SPLIT OF ASSETS UNDER MANAGEMENT (AUM)
Investment management
We offer a number of investment strategies
within four core asset classes:
• Equities
• Fixed Income
• Multi-Asset
• Alternatives
Our investment teams are unconstrained by
a house view, and are supported by the CIO
office and specialists in environmental, social and
governance (ESG) issues and data science.
By asset class
Product
We offer a range of actively managed investment
products. Investments can be made through:
• Mutual funds
• Segregated mandates
• Investment trusts
We earn revenues by charging fees to
our clients for the provision of investment
management services, typically based on
a percentage of the AUM. A number of funds
and mandates also have the potential to earn
performance fees.
By vehicle type
Distribution
We primarily access our clients through a range
of distribution partners. Our core partners include:
• Funds of funds
• Platforms
• Global financial institutions
• Advisers
• Wealth managers
• Life companies
• Private banks
• Institutional clients
• Consultants
By distribution partner type
£58.7bn
2020
Equities
Fixed Income
Multi-Asset
Alternatives
55%
14%
14%
55%
25%
6%
7%
24%
£60.5bn
2021
£58.7bn
2020
£60.5bn
2021
84%
14%
85%
14%
1%
2%
Mutual funds
Segregated mandates
Investment trusts
£58.7bn
2020
50%
3%
8%
2%
50%
36%
2%
9%
1%
2%
1%
36%
£60.5bn
2021
Advisory
Discretionary
Institutional
Direct
Investment Trust
Other
OUR BUSINESS
At 31 December 2021, Jupiter actively managed £60.5bn of our clients’
assets. Delivering growth for clients through investment excellence is at
the centre of what we do.
STRATEGIC REPORT
4
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
HOW WE DO IT
WHERE WE OPERATE
Talented individuals
delivering with conviction
We enable talented individuals to pursue
their own investment styles. Without the
constraints of a house view, our fund
managers can follow their convictions to
deliver the best outcomes for clients.
Meeting our clients’ needs
through working together
We work together to innovate and deliver
the products that help our clients meet
their objectives, providing the best
outcomes for our clients, shareholders and
all our stakeholders.
An efficient operating model
We have a single operating platform, which
we continue to develop to minimise
complexity and support growth. This
means we remain agile and able to adapt
as market conditions evolve.
UK
71%
AUM by geographical
location of client
2020: 72%
516
Employees
2020: 555
Rest of
World
3%
AUM by geographical
location of clients
2020: 3%
12
Employees
2020: 9
Asia
5%
AUM by geographical
location of client
2020: 4%
15
Employees
2020: 17
EMEA
21%
AUM by geographical
location of client
2020: 21%
42
Employees
2020: 40
Third party
Remote access
Client service via local
licensed distributors
UK
Asia
EMEA
Rest of
World
5
Jupiter Fund Management plc | Annual Report and Accounts 2021
OUR BUSINESS MODEL
Jupiter has a clear, robust value creation model, which helps us to
generate value for our clients, shareholders, people and society.
INVESTMENT MANAGEMENT
• We are a specialist, high-conviction, truly active asset manager
• We do not have a house view, but allow our fund managers autonomy to
follow their convictions
• We seek investment outperformance after all fees for our clients
• We actively engage with our investee companies, not only to drive
financial results but also for societal benefits and a sustainable future
> Read more on our investment capabilities
on page 30 and our approach to
stewardship on page 40.
PRODUCT
• Our product development and governance
structure brings together our investment
management and distribution teams, to ensure
our product offering is aligned to client needs
• Our product development strategy is focused on
innovation to adapt to clients’ changing needs
> Read more on product and
distribution on page 32.
DISTRIBUTION
• Basing our distribution structure around client
types and geographies gives us a clear
understanding of our clients’ investment
objectives, product and service needs
• We build strong relationships with consultants,
in line with our culture
> Read more on product and
distribution on page 32.
WHAT WE DO – THE JUPITER DIFFERENCE
D
I
S
T
R
I
B
U
T
I
O
N
P
R
O
D
U
C
T
I
N
V
E
S
T
M
E
N
T
M
A
N
A
G
E
M
E
N
T
THE JUPITER DIFFERENCE
SPECIALIST ACTIVE STRATEGIES
HIGH CONVICTION
THOUGHT LEADERS
AGILE & FOCUSED
HOW WE DO IT
6
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
FOR CLIENTS
Investment performance
after all fees
We help our clients to meet their long-term
investment goals, by delivering investment
outperformance after all fees.
FOR EMPLOYEES
Individual development
We have a culture that attracts and
develops talent. We support and
challenge our people to
continuously develop.
FOR SHAREHOLDERS
Total returns
We target capital and income returns.
We pay a progressive ordinary dividend,
supplemented by the distribution of any
capital that is surplus to business needs.
FOR SOCIETY
Stewardship
One of our biggest impacts comes from
engaging with the companies we invest in.
Each year, we hold more than 1,000
company meetings to obtain investor
insight and, where relevant, challenge
boards on issues affecting long-term value.
We are focused on the sustainability of
both investee companies
and our own business.
> Read more on our stakeholders on page 58.
OPERATING AND
RISK ENVIRONMENT
• We have a single operating platform
across the Group, minimising complexity
and supporting growth
• We drive efficiencies through a disciplined
approach to investing in our platform
• We identify, monitor, manage and mitigate
risk through a robust and clearly defined
risk framework
> Read more on our approach to risk
management on page 60.
PEOPLE
• We develop our people through a supportive
culture, to prioritise and deliver for clients
• We promote diversity and inclusion at all levels
of the organisation
• We engage our people with a clear strategy,
purpose and set of guiding principles
> Read more on our people and culture
on page 36.
CAPITAL MANAGEMENT
• We maintain a robust capital surplus
over our regulatory requirements
• We balance investment for growth with
returns to shareholders through a clear
capital allocation framework
> Read more on our capital management
on page 26.
WE EXIST TO HELP OUR CLIENTS
ACHIEVE THEIR LONG-TERM
INVESTMENT OBJECTIVES
THE VALUE WE CREATEHOW WE DO IT
58%
Mutual fund investment
performance
76%
Employee engagement
17.1p
Total dividend
708
Engagements with
companies on ESG matters
7
Jupiter Fund Management plc | Annual Report and Accounts 2021
CHAIRMAN’S
STATEMENT
“Jupiter’s agility has
enabled us to adapt
throughout the
pandemic to ensure
we continue to
serve our clients’
best interests.”
Dear Stakeholder
2021 has been a year of progress in challenging
circumstances. We have continued to invest in
key areas of our business, which we believe
provide the best opportunity to accelerate our
growth agenda. This has been achieved despite
the difficult market context, with the global
pandemic still creating much uncertainty across
the world and continued outflows from the UK
and European-focused asset classes.
The pandemic has continued to impact our
clients, our people and how we operate our
business; however, Jupiter’s agility has enabled us
to adapt throughout the pandemic, to ensure we
continue to serve our clients’ best interests,
progress our strategic initiatives and focus on the
wellbeing of our people.
Purpose and culture
Our purpose is to help our clients achieve their
long-term investment objectives. This is
supported by our culture which puts our clients
at the heart of everything we do, and drives a
high-performing, collaborative and supportive
environment for our people.
Nichola Pease
Chairman
We believe having a diverse workforce supported
by an inclusive culture is critical for the future
success of our business. There have been a
number of initiatives to help improve diversity
across Jupiter and the wider industry, as detailed
on page 39. We have also included diversity
targets in our executive remuneration structures
and our people manager objectives to drive
progress in this important area.
Further information on our culture and people
can be found from page 36 and information on
the Board’s oversight of these matters can be
found on page 79.
Helping our clients achieve their long-term
investment objectives is wider than pure
investment performance. Clients want to invest
their capital in a sustainable way, through active
stewardship, which helps to drive change and
provides benefits for the world we live in. As an
active fund manager, we are entrusted stewards
of our clients’ capital and recognise the
importance of this role to add value over and
beyond delivering investment performance. This
enables us to further differentiate ourselves from
other asset managers whilst building on our long
history of effective stewardship.
Sustainability
Investing sustainably and building ESG risk
considerations into our processes have long been
central to our investment philosophy.
We launched our first sustainable investment
product in 1988, recognising the benefits of
deploying capital into companies that provide
solutions to environmental and social problems.
As described on page 40, our stewardship
activities are embedded across all of our
investment strategies and we engage with our
investee companies on ESG matters to drive
progress on these key issues. This focus on
sustainability has continued and some key
decisions made by the Board this year related to
accelerating and strengthening our sustainable
initiatives.
We joined the Net Zero Asset Management
(NZAM) initiative, under which we have
committed to operate our business and manage
all assets on a net zero emissions basis by 2050 at
the latest. You can read more on our targets,
plans to deliver this and how we measure our
progress on page 45. We have also become a
signatory to the UN Global Compact (UNGC), a
corporate sustainability initiative which contains
2021 has been a year of progress in challenging circumstances.
We have continued to invest in key areas of our business,
which we believe provide the best opportunity to accelerate
our growth agenda.
8
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
ten principles on human rights, labour, the
environment and anti-corruption. Our inaugural
communication on progress against these ten
principles can be found on page 52.
We were proud to be included in the list of
signatories for the revised Stewardship Code, the
first under the new Code, which was adopted in
2020. Only two thirds of applications were
accepted by the Financial Reporting Council (FRC)
and we believe our inclusion on the list
demonstrates our active stewardship approach,
which is focused on delivering positive outcomes
for all stakeholders, through effective
engagement and collaborative action.
We have continued to develop our suite of
sustainable products, as highlighted in our CEO’s
Report. Further information on our ESG-related
activities can be found within our Sustainability
Report starting on page 40 and information on
how we have incorporated ESG into our
remuneration structures from page 102.
Strategy and performance
We have remained focused on delivering for our
clients and our investment performance has
remained strong, with 58% of our mutual fund
AUM performing above median over three years
and 80% above median over one year. Although
our AUM has increased by 3% over the last
twelve months to £60.5bn, we are disappointed
to remain in a net outflow position. Net outflows
for 2021 amounted to £3.8bn, despite continued
strong gross sales of £16.5bn. This has mainly been
due to outflows from the UK market where client
demand has moved away from single country or
regionally focused mandates. This net outflow
position is the primary driver behind the decrease
in share price and returning to net inflows is a key
priority for the Board and management.
We have made a number of investments across
the business during the year to help accelerate
our growth by diversifying our product range,
client type and geography. We have invested in
key areas such as our Sustainability and Fixed
Income product ranges and our disciplined
product strategy has seen significant growth in
newly launched products. Growth of these
strategies should accelerate as they continue to
build their performance track records and AUM.
We have continued to establish our US
operations with the hiring of US Distribution and
Credit Analyst teams and are executing our plans
to expand into the Australian market. The growth
of our institutional business has continued to be
a strategic priority. I have been particularly
pleased to see this area of our business
developing through some senior hires, refining
our investment offering to meet institutional
client needs and evolving our infrastructure to
support this type of client activity.
The Group has generated strong financial
performance, with underlying profit before tax
increasing 21% from £179.0m in 2020 to £216.7m in
2021 and a growth in statutory profit to £183.7m
(2020: £132.6m), largely driven by performance
fees earned on a small number of funds. For
further information on our financial performance
please see our CFO’s Review starting on page 20.
Capital allocation
In-line with our previously disclosed capital
allocation policy, we are proposing a final
dividend of 9.2p per share, to be approved
by shareholders at the forthcoming AGM.
If approved, such dividend will be paid on
20 May 2022 to those shareholders on the
register on 22 April 2022. This will result in total
ordinary dividends for 2021 of 17.1p per share
equating to 54% of our underlying EPS.
The Board reiterates its policy to return excess
capital after retaining sufficient earnings for
capital and growth. As I reported last year, the
Board intends to consider the next return of
capital at the end of 2022. We expect to target a
return of capital of at least 70% of underlying
profit after tax, calculated as the cumulative
underlying profit after tax for 2021 and 2022, less
ordinary dividends.
The Group maintains a robust capital position and
has prepared for the transition to the new
Internal Capital Adequacy and Risk Assessment
which will replace the current process in 2022. It
is our current expectation that investments in the
business to drive growth will be through the
Group’s income statement, with limited
requirement to retain earnings for inorganic
growth investments.
Following a review, the Board expects that future,
additional returns of capital will be through share
buybacks, rather than special dividends.
Board and senior management
There have been a number of changes to the
Board this year. As announced last year, Jonathon
Bond and Edward Bonham Carter stepped down
from the Board in May 2021. Both have played a
significant part in Jupiter’s history, particularly
Edward who served as Jupiter’s CEO between
2007 and 2014. David Cruickshank and Dale
Murray were appointed to the Board as
independent Non-Executive Directors on 1 June
2021 and 1 September 2021 respectively. We are
delighted to have recruited two such high calibre
Directors and we are already benefiting from
their contribution to the Group.
Polly Williams, the Chairman of our Audit and Risk
Committee, has decided to step down from the
Board and will not be seeking re-election at this
year’s AGM. Polly has served on the Board for
over seven years and throughout her tenure has
provided excellent stewardship of the Audit and
Risk Committee. She leaves the Board with our
sincere gratitude for her substantial contribution
to the Group. We were delighted to announce
that Suzy Neubert will be joining the Board as an
independent Non-Executive Director and
member of the Nomination and Remuneration
Committees with effect from 1 March 2022. David
Cruickshank will succeed Polly Williams as
Chairman of the Audit and Risk Committee with
effect from the conclusion of the 2022 AGM.
There have also been some changes to our
Executive Committee as we have implemented
our succession plans and looked to broaden and
strengthen our leadership team. Whilst further
information on the changes can be found on
page 69, I would like to take the opportunity to
extend the Board’s gratitude to Stephen Pearson,
our former CIO. Stephen has played a key role in
Jupiter’s development over the last 20 years, and
has driven the development of our investment
management capabilities since his appointment as
CIO in 2015. The Board have overseen an orderly
transition to our new CIO, Matthew Beesley, who
has also joined the Executive Committee. We
look forward to working together with our new
Executive Committee members to drive Jupiter’s
growth.
Outlook
As an active asset manager Jupiter is well placed
to navigate the ongoing market volatility in order
to continue to deliver for our clients. Whilst
there are many headwinds across the industry still
to navigate, we believe the investments we have
made in the business will drive our future growth
for the benefit of all our stakeholders.
As ever, I would like to thank all of our
stakeholders, particularly our clients, who have
continued to invest with us; our people who
deliver for our clients and have worked tirelessly
to progress the Company’s objectives; and our
shareholders for their continued support.
Nichola Pease
Chairman
24 February 2022
“ We have committed to operate our
business and manage all assets on
a net zero emissions basis by 2050.”
9
Jupiter Fund Management plc | Annual Report and Accounts 2021
CHIEF EXECUTIVE
OFFICER’S REVIEW
“Jupiter’s purpose is
clear. We exist to
help our clients
achieve their long-
term investment
objectives. We have
done this by sticking
to what we do best:
truly active, high-
conviction asset
management.”
seeing our clients in person when restrictions
have allowed.
Despite challenging net flows, Jupiter’s success
has been built on its ability to navigate the
choppy waters of markets since its inception in
1985. Forward thinking is key in a highly
competitive landscape, where the pace of change
has accelerated with the global pandemic. Our
investment in new areas over the last two years is
starting to deliver and I am optimistic this
momentum will carry forward in 2022 to the
benefit of our clients, our people and our
shareholders.
Our purpose and performance
Jupiter’s purpose is clear. We exist to help our
clients achieve their long-term investment
objectives. Our actions are guided this year, as in
every year, by our unwavering focus on delivering
value for our clients, who are at the heart of
everything we do. We saw a material
improvement in our annual Assessment of Value
report, with 84% of our funds’ unit classes
receiving positive ratings for delivering value.
More details on this can be found on page 33.
Andrew Formica
Chief Executive Officer
It is a challenge we embraced in 2021 as we
broadened our product offering, invested in our
talent, and adopted the processes, systems and
technology to meet the evolving needs of our
clients. Further details on how we are adapting to
the challenges in the market can be found on
page 13.
It is also a year in which we prioritised our
support and focus on our people as they
continued to deliver under difficult
circumstances. We enjoyed welcoming our
colleagues back to the London office in
September, some of them for the very first time.
It was an opportunity to rebuild our cultural
reserves, inevitably somewhat depleted after
nearly 18 months of intermittent remote working.
For some, it was their first face-to-face meetings
with colleagues since joining Jupiter.
The cultural benefits of being back in the office
were immediately clear to all; being together
under one roof in London proved an opportunity
to build or rebuild relationships and reinforce a
key cultural pillar of the firm – that only
collectively, working together as one team, can
we meet our individual and business goals.
Equally, we have been delighted to get back to
It was a challenging year for Jupiter despite some
significant progress on our strategic objectives.
The global pandemic remained a disruptive force,
affecting the way we do business, buffeting
economies and markets, and having a profound
impact on how our clients allocate their capital.
The UN Climate Change Conference in Glasgow
kept climate change on the agenda and ESG
considerations firmly in the spotlight.
UK equities remained out of favour, despite the
resolution on Brexit, and inflation concerns
slowed the appeal for fixed income funds, two
areas where Jupiter has a strong product line-up.
Client demand remained concentrated in narrow
areas such as global equities or multi-asset, with
the knock-on effect that Jupiter saw an elevated
level of redemptions across a number of its
investment strategies. This challenging net flow
picture, however, was offset by another strong
year for gross sales. At an industry level, passive
strategies meanwhile continued to attract client
flows, putting the onus on us to demonstrate
how an active, high-conviction approach to
investment can be a differentiator, delivering
value and outperformance to clients.
It was a challenging year for Jupiter despite some significant
progress on our strategic objectives. The global pandemic
remained a disruptive force, affecting the way we do business,
buffeting economies and markets, and having a profound
impact on how our clients allocate their capital.
10
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
Our investment performance remains strong,
with 58% of our mutual fund assets
outperforming over three years, one of our KPIs.
We have done this by sticking to what we do
best: truly active, high-conviction asset
management. We talk about the value of active
minds because we have built a culture that
encourages diversity of thought and intellectual
challenge. Our talented managers and their teams
have a high degree of autonomy, expressing their
views in concentrated portfolios with high active
shares. More broadly, this focused conviction also
means we choose to centre our client offering in
areas where we believe we can differentiate
ourselves and consistently deliver for our clients.
Our strong financial results this year reflect the
ongoing resilience of our business and the
strategy that underpins it. Underlying profit
before tax was up 21% from £179.0m to £216.7m,
as we saw the full-year benefit of the
contribution from Merian. Full details of our
financial results can be found in the CFO review
on page 20. Our strong investment performance
also generated £113m of performance fees this
year, driven primarily by the Chrysalis Investment
Trust. While this is excellent performance, we
would not expect those elevated levels to be
repeated through 2022 or every year going
forward.
We were disappointed to see net outflows of
£3.8bn (2020: net outflows of £4.0bn), especially
given it was another outstanding year of £16.5bn
of gross sales. It was particularly pleasing to see
strong flows directed towards some of our key
growth strategies. Global Sustainable Equities,
which invests in companies leading the transition
to a more sustainable world, continued to build
momentum and saw net flows of £200m. Our US
strategic relationship with NZS Capital also hit its
stride, boosted by the launch of a Luxembourg-
domiciled SICAV version of their global equity
growth strategy, which helped generate over
£300m of net inflows, with total assets under
management growing to over £1bn. Recently
launched products have performed well.
Strategies launched since 2018 have attracted
£2.2bn of cumulative net inflows and now
account for £3.6bn of our AUM. More details on
our flows this year can be found in the CFO
review on page 22.
With clients showing real appetite for some of
our new strategies, it has been painful to see this
success overshadowed by elevated levels of
redemptions for the reasons I have cited above. It
has not, however, dented our ability to deliver a
strong financial performance which has in turn
allowed us to invest in the future growth of the
business. We have a strong core business, built
over more than three decades, that will continue
to generate the bulk of our revenues over the
short to medium term. Yet no company can
stand still, and there are three key growth areas in
which we will focus our investment, to ensure we
continue to move forward. They are:
• Expanding our sustainability capabilities;
• Supporting our ambitions in the institutional
market; and
• Growing our international presence.
A commitment to sustainability
Sustainability at Jupiter can be viewed through
three lenses: the integration of ESG principles in
the investment process of our managers, our
sustainable offering to clients, and a commitment
to corporate engagement.
Jupiter has a proud heritage as an active
participant in helping find solutions to era-
defining challenges. In 1988, we were the first
asset manager to offer clients the opportunity to
invest in a unit trust, the Jupiter Ecology Fund,
entirely dedicated to companies seeking to
address environmental issues. Over thirty years
on, we continue to lead the conversation.
In 2021, Jupiter became a signatory to the
Institutional Investors Group on Climate Change’s
(IIGCC) NZAM initiative, committing us to
achieving net zero emissions by 2050 across our
full range of investments and operations. At the
same time, we agreed to align with the UNGC,
committing us to meeting fundamental
responsibilities in the areas of human rights,
labour, the environment and anti-corruption. Our
efforts have been recognised by the industry,
with Morningstar awarding Jupiter an Advanced
rating for our ESG commitment, one of only five
asset managers to receive this accolade.
We have also continued to add resource in key
areas, including appointing a new Head of
Sustainability, who will coordinate ESG activities
and drive our sustainability strategy across the
firm. To find out more about our corporate
engagement on ESG matters, please see from
page 40.
We are not only high-conviction active managers
but also stewards of our clients’ capital. We have
a responsibility to actively engage with our
investee companies and encourage sustainable
practices that we believe drive better outcomes
for our clients and, ultimately, all of our
stakeholders. All our portfolio managers are
required to build ESG risks into their investment
processes.
We understand our clients are at different stages
on the ESG journey. While some clients may only
be looking for their manager to handle financially
material ESG risks on their behalf, there are
others seeking to minimise the negative impacts
of their investment, or who actively require a
dedicated allocation strategy that delivers
positive outcomes. We have evolved our product
suite accordingly, restructuring our sustainable
investing strategy in 2021 into two distinct
channels – sustainable investing and
environmental solutions. We are also making
significant investments in ESG headcount across
the business, increasing resource to the central
stewardship team and appointing ESG investment
directors to a number of our strategies.
This investment in our ESG capability and
resources started bearing fruit in 2021. Good flows
and strong investment performance saw AUM in
our Global Sustainable Equity strategy increase by
almost four times over the year. The strategy has
also attracted several positive consultant ratings
over the year, helping attract institutional interest
in the fund. To widen client access to the strategy,
we launched a Luxembourg-domiciled vehicle. We
have continued to build out our sustainability
offering early in 2022 with the introduction of a
Sustainable Finance Disclosure Regulation (SFDR)
‘Article 8’-compliant version of our Dynamic Bond
fund and the launch of the Global Ecology Bond
fund for international markets.
Ambitions in the Institutional channel
The institutional market represents a significant
growth opportunity for Jupiter. Institutional clients
currently only account for 8% of the Group’s
AUM, but we have a strategic objective to extend
this contribution over the medium term.
Developing an institutional business is not just a
case of targeting new clients, but requires
investment in talent, products and platform. In
2021, we invested across all three. We appointed
new institutional regional heads in the UK and Asia
and grew our team in the US. We are in the
process of recruiting a new head of institutional
for continental Europe and we are developing an
on-the-ground presence in Australia.
We have a wide range of products which are
ideally suited to the institutional market, from
Global Sustainable Equities and NZS Capital’s
global growth strategies, to our unconstrained
global fixed income funds and emerging market
products, both in fixed income and equity.
Assets under management
£60.5bn
2020: £58.7bn
Gross sales
£16.5bn
2020: £16.5bn
11
Jupiter Fund Management plc | Annual Report and Accounts 2021
CHIEF EXECUTIVE OFFICER’S REVIEW continued
Global consultants, who are key to unlocking this
market for us, are beginning to recognise the
strength of our franchises. We now have 15
consultant ‘buy’ ratings across nine strategies –
this has more than doubled over the last
12 months.
To support our push into this market, we have
developed our support and operational platform.
Institutional clients, and increasingly our existing
retail clients, expect a different level of service
and reporting so we have added resource to
support functions such as our RFP and client
service teams.
A growing overseas presence
When I first joined Jupiter, I stated that
reinforcing our market-leading position in UK
retail had to be a priority after several years of
focusing on expanding our international presence.
The successful acquisition and integration of
Merian has fulfilled this objective, allowing us to
widen our perspectives and take a fresh look at
our global footprint. At the end of December,
29% of our AUM came from clients based outside
the UK.
In 2020, Jupiter established its first presence in
the US, opening an office in Denver initially to
support our colleagues at NZS Capital. In the last
12 months, we have expanded the team there and
opened an investment office in New York
focusing on US credit. The institutional market is
our sales focus in this region, and as our product
set and pipeline grows, we expect North America
to make a more significant contribution to the
group going forward, with £1.2bn of client assets
in the region today.
We have taken steps to establish a foothold in
Australia, where we are targeting the institutional
market. We have already started to work with
our first client and are in the process of adding
on-the-ground resource.
Finally, we continue to explore our growing
relationship with Ping An, a Chinese financial
services company, which we inherited through
Merian. In 2021, Ping An began managing our
China Equity fund, offering invaluable on-the-
ground expertise and insight into Chinese
companies. We will continue to work with our
strategic partner, as we look to develop our
presence in the Chinese market.
People
We could not have made the progress we did in
2021 without the commitment, resilience and
hard work of our people. I would like to thank
them for all their efforts over the last 12 months
in what was another challenging year.
The health and wellbeing of our people remained
our top priority as the pandemic continued to
disrupt our lives. We introduced a new flexible
working model to better accommodate the
competing needs of work and family. For a
second year running, Jupiter offered a £1,000
contribution for home office improvements to
ensure our people were able to work in optimal
conditions.
On the reopening of our London headquarters,
employees returned to an office that had been
redesigned with new collaborative spaces,
blending both the formal and informal to help
rebuild relationships and foster communication.
The reopening was also an opportunity to
celebrate our people, and we did so with a series
of ‘welcome back’ events that were very well
received.
Despite these measures, and perhaps
unsurprisingly after the last two turbulent years,
the latest employee engagement survey recorded
a drop in the engagement score from the
previous year. Our people continued to tell us
they cared deeply about the future of the
Company and appreciated the efforts the firm
had taken to support them during the pandemic,
but they wanted to see greater visibility around
the direction and future of the firm. The
Executive Committee will be working hard to
address this in 2022.
As a firm, when we look to bring in talent, we
believe that businesses with a diverse workforce
and an inclusive culture are more sustainable. This
is an approach I have championed for many years,
having co-founded Investment20/20 with our
Chairman, Nichola Pease. Investment20/20 is an
initiative aimed at bringing more diverse talent
into all aspects of investment management.
Under the scheme, Jupiter this year chose to
nearly triple the number of entry level
opportunities for school leavers and graduates,
recognising both that the last 12 months have
been more challenging for young people to gain a
foothold in the workplace and also the value that
they can bring to Jupiter.
Diversity only works when it goes hand in hand
with inclusion. Jupiter’s Executive Committee has
been a strong supporter of the Company’s
employee networks, believing they can provide
invaluable insight on helping create a workplace
where people from under-represented
backgrounds can feel comfortable and thrive. In
2021, the Jupiter Pride Network created a
powerful video for Pride Month that was one of
the Company’s most widely viewed and shared
posts on social media. The end of the year also
saw the successful launch of the Jupiter Gravity
Network, a group aimed at raising awareness of
cultural and ethnicity challenges and closing the
gaps that have traditionally been barriers to
advancement.
On a personal level, I signed up to a reverse
mentoring programme set up by
Investment20/20 and #TalkaboutBlack, part of
the Diversity Project. It was a wonderful
opportunity to get a better understanding from a
senior black professional of the challenges black
men and women face when trying to develop
and progress into senior roles. More broadly, in
2021, we set all our Executive Directors and
Executive Committee members clear Diversity
and Inclusion (D&I) goals, and our efforts in this
space will continue as the Company seeks to
draw inspiration and strength from the vibrant,
diverse society in which it operates. More details
on this can be found from page 36.
We also announced this year the retirement of
our Chief Investment Officer, Stephen Pearson.
Stephen has been at Jupiter for over 20 years and
in the fund management business for over 35. His
contribution to the business cannot be
overstated and I would like to thank him for his
strong leadership, relentless commitment to
clients and clear vision, which have led to a
transformational change in our investment
capabilities.
Positioned for future growth
It was a year of challenge and achievement in
equal measure as we continued to build the
foundations of our future prosperity. As we
move into 2022, we will maintain our strategy of
investing for growth, focusing our efforts in those
areas where we can best serve our clients.
The significant change the business has
undergone over the last two years is beginning to
pay off, and I am optimistic we will see an
acceleration in the pace of delivery in 2022. I look
forward to working with my colleagues to
achieve our objectives and deliver on our future
success.
Andrew Formica
Chief Executive Officer
“ In 2021, Jupiter became a signatory to the
IIGCC Net Zero Asset Managers initiative
committing us to achieving net zero
emissions by 2050 across our full range
of investments and operations.”
12
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
1. GROWTH
IN PASSIVE
PRODUCTS
Context:
As clients become more sensitive
to fees and seek more stable
returns, they are increasingly
moving part of their portfolios into
passive investments and away from
active products. In 2021, two thirds
of flows from UK clients went into
passive products and now account
for just under 20% of the total
AUM across the industry.
1
Jupiter’s response:
We are aware that, for some of
our clients, passive products may
form part of their portfolio. But
as a high-conviction, truly active
asset manager, our product range
provides a complementary offering.
We construct concentrated, high
active share, benchmark-agnostic
portfolios to deliver returns for our
clients in all market environments.
Delivering value is key to our
ongoing success. After all fees,
58% of our mutual fund assets
outperformed their peer group
over three years, with 37% in the
top quartile.
> More on our investment
performance can be found
on page 30.
We also actively engage with our
investee companies, believing
better run companies perform
better. Whereas passive products
are obliged to hold all of the
stocks within their benchmark, we
are highly selective in our investee
companies and have the resources
and commitment to actively
engage with them across business
and ESG issues.
> More on our stewardship
approach can be found
on page 40.
MARKET TRENDS
Through 2021, we have seen a number of market trends impact our business and the wider
industry. Four key trends are detailed below along with how Jupiter has responded.
2. AN INCREASED
FOCUS ON
SUSTAINABILITY
Context:
Over recent years, there has been
a significant shift as clients are
increasingly focused not just
on the financial returns of their
investments, but also on the
impact of these investments on
people and on the planet. Across
the asset management industry,
clients are investing in products
that build environmental, social
and governance factors into
their investment processes.
Jupiter’s response:
Sustainability is at the core of what
we do at Jupiter and is embedded
throughout our culture. All our
fund managers are required to
consider ESG risks as part of their
investment processes and ESG
objectives are part of our
Executive Committee’s and
investment professionals’ appraisal
process.
We believe that companies that
are managed in a sustainable way
will outperform over time, driving
better outcomes for our clients
and ultimately all of our
stakeholders. As an active manager,
we engage with the companies in
which we invest, including over
700 engagements on ESG issues
this year.
We also have a range of products
which are explicitly focused on
sustainable investing and
environmental solutions. This
includes Global Sustainable
Equities, our Ecology range, and
the newly launched Ecology Bond
and Dynamic Bond ESG funds.
> More on our approach to
sustainable investing can be
found on page 40.
3. A MOVE
TO A MORE
GLOBAL FOCUS
Context:
We have seen an industry-wide
shift over recent years, in which
clients have looked to invest in
products with broader investment
universes. Clients are increasingly
investing in more globally-focused
products and away from those
with a more regional or single-
country scope.
Jupiter’s response:
Over recent years, we have
actively broadened our product
range into more globally-focused
products.
The global growth strategies of
NZS Capital have performed
exceptionally well since the start
of the strategic partnership with
Jupiter in early 2020. Strong
investment performance has
supported net inflows in 2021 of
over £300m. AUM for this
capability now stands at over £1bn.
Global Sustainable Equities, one
of our flagship sustainable
products, also generated inflows in
2021 of £200m. We have launched
new vehicles for each of these
strategies this year to make them
available to a wider range of
clients.
Away from equities, we also have
a significant and market-leading
range of global unconstrained
fixed income products. Dynamic
and Strategic Bond collectively
have AUM of almost £13bn. In early
2022, we also launched the Global
Ecology Bond fund.
> More on our product range
can be found on page 32.
4. EVOLVING
REGULATORY AND
RISK LANDSCAPE
Context:
As we move through the global
pandemic, regulators across the
globe have evolved their
approach. Traditional risk
management and business
continuity have evolved to focus
on systemic risk. Regulators are
also focused on stewardship,
seeking to bring clarity and
authenticity to an area which has
not historically always used
consistent taxonomy and
labelling.
Jupiter’s response:
Jupiter works closely with our
regulators to ensure that we
have a strong, well-capitalised
business. We have a robust risk
framework that ensures our risks
are managed in way which helps
Jupiter achieve its strategic goals,
while keeping our business and
clients safe. More on our
approach to risk management
can be found on page 60.
The most notable new piece of
regulation around stewardship
is the SFDR, which applies to
products domiciled in the EU and
defines products as those with
ESG factors integrated or
promoted, or with clearly
defined sustainable outcomes.
Jupiter’s approach has been one
of authenticity. Rather than
adjusting existing products’
processes or objectives, where
necessary we generally prefer to
launch new, ESG-focused
vehicles for existing strategies,
such as with Dynamic Bond ESG.
> More details on our approach
to SFDR can be found
on page 49.
1. Data from the Investment Association, includes UK-based clients investing in UK and
overseas domiciled funds
13
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
FORWARD
As we come out of the second
year of the Covid pandemic, a
recurring theme to describe
our collective experience of
this global event is one of
‘change and reinvention.’ The
world before Covid-19 is no
longer the one we live in now.
While it can be argued ‘change’ is an ever-present
feature in our lives, we are living through a period
that is profoundly altering the way we live, do
business, and interact in society for generations
to come. As a business, the challenge is to remain
agile, anticipating and dealing with change while
embracing the opportunities that present
themselves in a rapidly altering landscape.
Forward thinking is a pre-requisite for success in
such a fast-paced and evolving environment, and
Jupiter’s success has been built on its ability to
navigate the unabated change since its inception
in 1985.
In common with many other industries, asset
management faces a number of longer-term
challenges. These include an evolving,
competitive landscape facing consolidation
through M&A, the ongoing passive versus active
management debate which has brought about
fee pressure and a focus on value, the impact of
huge societal shifts in response to Covid-19,
increased regulatory focus, technological
advances and, most significantly, the impact of
climate change on the planet and people. As we
planned, 2021 has been another year of building
for the future so that we can continue to deliver
value for our stakeholders over the long term,
while keeping clients at the centre of everything
we do.
A competitive landscape
At Jupiter, delivering long-term investment
outperformance after all fees to our clients
through active investing informs all of our
decisions. We look to identify the right markets
and the most appropriate strategies for our
differentiated client types. Our diversification
strategy has been progressed through expanding
the breadth of international markets in which we
operate. This year, we have made significant
inroads into the US market and developed our
business in Latin America, and we are well
advanced in our plans to make our product range
available to Australian institutional investors. In
addition, we have strengthened our team and
developed our global consultant relationships
with a view to increasing the institutional client
strategic importance and Jupiter recognises the
significant role which active managers can play in
positively influencing companies’ behaviour and
activities, for the benefit of our clients and wider
society. This has been at the heart of our
investment approach for many years and we have
increased our focus in 2021.
Strong governance and investing sustainably have
long been defining features of Jupiter’s
investment culture. We have been focused on
meeting our goals in this area, which are to
support the transition to a low-carbon economy
and pursue a positive stakeholder agenda
balancing the interest of our clients, shareholders,
employees, and wider society. Our commitment
this year has seen the Company continue to build
out the team of client-facing investment
share of our business, a key strategic priority for
the business.
As an independent, UK-listed business, we are
well positioned to respond quickly and
effectively as circumstances change. We are also
held to the highest standards of conduct and
accountability, which is overseen by our deeply
experienced Board of Directors. For more details
on the trends in our industry and how Jupiter is
responding, please see page 13.
Spotlight on sustainability
Asset management has a crucial part to play in
the allocation of capital to sustainable businesses
and the critical nature of the climate crisis has
pushed this issue to the top of corporate, as well
as governmental, agendas. It is an area of huge
Gross sales (£bn)
£5.1bn
of our AUM is from
institutional clients
0
5
10
15
20
0.8
11.1
2
11.4
14.4
15.1
1.4
2.1
2018
2019 2020
2021
Mutual funds & investment trusts
Segregated mandates
14
STRATEGIC REPORT
Jupiter Fund Management plc | Annual Report and Accounts 2021
FORWARD
THINKING
“As an independent
business, we are well
positioned to respond
quickly and effectively
as circumstances
change.”
AUM by client domicile (£bn)
directors who are solely focused on ESG
allocated to key strategies. We have set a clear
path towards achieving our net zero targets, for
both our portfolio constituents and our business.
And we have continued to develop our range of
dedicated investment funds focused on
sustainable investing and environmental solutions.
We have also worked hard to meet the
developing regulatory frameworks, some of
which came into place at the start of 2022. For
more on our approach to sustainability, please
see page 40.
Technological advances
The trend for technological solutions shows no
sign of abating and this has been a year for huge
advancements in a broad range of sectors. Jupiter
recognised the potential for data science to
deliver improved outcomes for clients and we
have grown our data science team over recent
years both in size and scope. Today its targeted
solutions are incorporated into the fabric of our
fund management process. This year has seen
investment in several new technological solutions
and the continued development of the ESG Hub,
a bespoke data centre built to increase our fund
managers’ ability to view and analyse their
portfolios in the context of their exposure to
ESG risks. This investment has proven to be highly
valuable as clients have moved their focus
towards ESG.
Generational change
The societal shift which has taken place over the
past two years has created an environment for
innovation and flexibility on many levels. This
opportunity for change is no less important in
financial services, which has had a reputation for
being more traditional in its approach, than in
other potentially faster moving industries. The
shift towards hybrid working is a case in point,
challenging the established paradigm around
exclusively office-based work in large cities. We
believe that this flexibility could improve the
diversity and resilience of the workforce in the
industry, while retaining the benefits of personal
connection, the glue with which we can build our
culture. By being a part of this, we can better
reflect the world in which we operate, as well as
attracting and retaining talent and drawing on a
broad range of experience to build a successful,
sustainable future.
While continuing to build on the strong
foundations we have established for the business
to flourish in the future, it is also important to
reflect on an aspect of Jupiter’s identity that has
remained constant, namely its purpose. Jupiter
has always been committed to the belief that
client outcomes are improved through a dynamic,
collaborative, and consistent approach to active
fund management. We believe that by focusing
SEEING TOMORROW’S
TRENDS TODAY IS
THE VALUE OF ACTIVE MINDS
20
30
40
50
60
70
2018
2019 2020
2021
UK EMEA
Asia Rest of World
“Asset management has
a crucial part to play
through the allocation
of capital to sustainable
businesses.”
on doing this as well as we possibly can, while
looking after our people and our planet, we really
are serving the best interests of our valued and
diverse clients across our international markets.
15
Jupiter Fund Management plc | Annual Report and Accounts 2021
OUR STRATEGIC PRIORITIES
We aim to meet the following goals by 2024 by successfully delivering
on our strategic priorities and achieving our core objectives.
WE WILL DELIVER
SUPERIOR INVESTMENT
PERFORMANCE AFTER
FEES, ACROSS OUR
STRATEGIES
Investment performance is the lead indicator
for our continued success and demonstrates
our competitive advantage in delivering
investment excellence to clients.
Investment performance
WE WILL BUILD OUT
OUR CLIENT REACH,
OUR INVESTMENT
CAPABILITIES AND OUR
CLIENT CHANNELS
Diversification of assets by client and product
lowers the unsystematic risk we face and leads
to a less volatile shareholder return.
Net flows
WE WILL ACHIEVE
TOP‑QUARTILE NET
NEW MONEY GROWTH
Net flows are a lagging indicator of investment
success, reflecting our ability to deliver
investment performance that attracts client
funds, and to grow.
Net flows
AS A RESULT, WE WILL
SIGNIFICANTLY INCREASE
OUR CLIENT ASSETS AND
PROFITABILITY
Delivery of our goals will drive profitability,
generating value for shareholders.
Net management fees
1
Underlying earnings
per share
1
Dividends
1. More details on the Group’s use of APMs can be found on page 181.
OUR GOALS WHY IT’S IMPORTANT
LINK TO KPIs
16
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
OUR STRATEGIC PRIORITIES AND PROGRESS IN 2021
Sustainability
• Launched new vehicles and products for ESG
and Sustainability-focused strategies including
a Luxembourg-domiciled SICAV for Global
Sustainable Equities, the Global Ecology Bond
fund and Dynamic Bond ESG
• Invested for growth with newly appointed
ESG investment directors, broader resource in
the stewardship team and a newly created
Head of Sustainability role
• Over £1bn of AUM in sustainability-labelled
products
• Set interim targets for net zero for both
portfolio and corporate emissions
Institutional
• Key new hires including heads of institutional
in the UK and Asia Pacific
• Invested for growth with additional resource
in the US, in client service and RFP teams
• Developed strong relationships with global
consultants – ‘buy’ ratings have increased to 15
ratings across nine strategies
International
• £17.5bn of AUM from clients based outside
the UK
• 60% growth in overseas AUM over the last
three years, with net positive flows of £200m
in 2021
• Investments made in key growth markets:
• Key new distribution hires in the US and
opened a credit analyst office in New York
• Establishing presence in Australian
institutional market
• Continued to explore relationship with Ping
An in China
1
Investment performance
Consistently deliver strong
investment performance and
outcomes for clients in a responsible
and sustainable manner
OUR PROGRESS IN 2021
Financial resources
Deploy financial resources with
discipline to support growth and
deliver consistent total returns to
shareholders
6
Operating model
Enhance the operating model and
develop governance, risk and
control processes that are
purposeful, efficient, flexible and
scalable
5
Talent and culture
Attract, develop and retain
high-quality and diverse talent
aligned to a results-driven and
inclusive culture
43
Investment offering
Develop and deliver the best
investment offering to meet the
needs of our current and future
clients
2
Client relationships
Build deep, long-term client
relationships based on trust, and
consistently deliver an excellent
client experience
OUR
CORE
OBJECTIVES
17
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
OUR KEY PERFORMANCE
INDICATORS
How we performed in 2021. Our key performance
indicators (KPIs) enable us to monitor our progress.
FINANCIAL KPIs
1
NON‑FINANCIAL KPIs
Net management fees (£m)
Fees earned from managing our funds, net of
payments to our distribution partners.
Underlying earnings per share (p)
Underlying profit after tax divided by issued
share capital.
Dividends (p)
Ordinary and special dividends paid
to shareholders in relation to the year.
Investment performance (%)
Percentage of our mutual fund AUM above the
median over three years.
Net flows (£bn)
Net flows are the gross inflows to our funds less
redemptions from our funds during the year.
£453.7m 31.7p 17.1p 58% £(3.8)bn
395.7
392.4
370.0
384.0
453.7
17
18
19 20
21
34.2
32.4
28.8
28.7
31.7
17
18
19 20
21
15.5
17.1
11.4
3.0
17.1 17.1 17.1 17.1
17
18
19 20
21
Ordinary Special
43
38
33
28
21
44
38
34
42
37
1st quartile 2nd quartile
17
18
19 20
21
5.5
(4.6) (4.5) (4.0) (3.8)
17
18
19 20
21
Net management fees increased 18% to £453.7m.
Average AUM increased by 25% to £59.7bn while
net management revenue margins declined by 3
basis points (bps) to 76bps, both as a result of
the full-year impact of the Merian acquisition.
In addition, we generated £113.0m of gross
performance fees (2020: £73.6m).
Why this is important
Net management fees are the largest
component of our revenue and demonstrate our
ability to earn attractive fees by designing and
successfully distributing products that deliver
value to clients.
Underlying EPS increased by 3.0p in
2021 to 31.7p.
Although underlying profit before tax increased
by 21% to £216.7m, the increase in EPS was
diluted by the full-year impact of shares issued
as part of the Merian acquisition.
Why this is important
Measures the overall effectiveness of our
business model and drives both our dividend
policy and the value generated for shareholders.
The total ordinary dividend for the year was
unchanged from 2020 at 17.1p, representing a
total underlying pay-out ratio of 54%.
Why this is important
Demonstrates our ability to pay a progressive
dividend and return any surplus capital to
shareholders, where it is in excess of our needs.
Investment performance remained robust
in 2021 with 58% of mutual fund AUM
outperforming their peer group over a
three-year period (2019: 70%), with 37% in the
top quartile.
The decline from the prior year was due to two
funds which marginally moved into the third
quartile at the very end of December 2021.
Over one year, 80% of AUM outperformed
and over five years the figure was 68%.
Why this is important
Investment performance is the lead
indicator for our continued success and
demonstrates our competitive advantage in
delivering investment excellence for clients.
Despite another year of record gross flows of
£16.5bn, we saw total net outflows of £3.8bn
(2020: net outflows of £4.0bn).
Redemptions were primarily from areas where
retail client demand was muted, such as UK and
European equities, or where there were specific
performance concerns.
We generated net inflows into key growth areas
such as Global Sustainable Equities, NZS Capital’s
global equity strategies and a number of recently
launched products.
Why this is important
Net flows are a lagging indicator of investment
success, reflecting our ability to deliver
investment performance that attracts client
funds, and to grow our distribution.
1. More details on the Group’s use of APMs can be found on page 181.
18
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
FINANCIAL KPIs
1
NON‑FINANCIAL KPIs
Net management fees (£m)
Fees earned from managing our funds, net of
payments to our distribution partners.
Underlying earnings per share (p)
Underlying profit after tax divided by issued
share capital.
Dividends (p)
Ordinary and special dividends paid
to shareholders in relation to the year.
Investment performance (%)
Percentage of our mutual fund AUM above the
median over three years.
Net flows (£bn)
Net flows are the gross inflows to our funds less
redemptions from our funds during the year.
£453.7m 31.7p 17.1p 58% £(3.8)bn
395.7
392.4
370.0
384.0
453.7
17
18
19 20
21
34.2
32.4
28.8
28.7
31.7
17
18
19 20
21
15.5
17.1
11.4
3.0
17.1 17.1 17.1 17.1
17
18
19 20
21
Ordinary Special
43
38
33
28
21
44
38
34
42
37
1st quartile 2nd quartile
17
18
19 20
21
5.5
(4.6) (4.5) (4.0) (3.8)
17
18
19 20
21
Net management fees increased 18% to £453.7m.
Average AUM increased by 25% to £59.7bn while
net management revenue margins declined by 3
basis points (bps) to 76bps, both as a result of
the full-year impact of the Merian acquisition.
In addition, we generated £113.0m of gross
performance fees (2020: £73.6m).
Why this is important
Net management fees are the largest
component of our revenue and demonstrate our
ability to earn attractive fees by designing and
successfully distributing products that deliver
value to clients.
Underlying EPS increased by 3.0p in
2021 to 31.7p.
Although underlying profit before tax increased
by 21% to £216.7m, the increase in EPS was
diluted by the full-year impact of shares issued
as part of the Merian acquisition.
Why this is important
Measures the overall effectiveness of our
business model and drives both our dividend
policy and the value generated for shareholders.
The total ordinary dividend for the year was
unchanged from 2020 at 17.1p, representing a
total underlying pay-out ratio of 54%.
Why this is important
Demonstrates our ability to pay a progressive
dividend and return any surplus capital to
shareholders, where it is in excess of our needs.
Investment performance remained robust
in 2021 with 58% of mutual fund AUM
outperforming their peer group over a
three-year period (2019: 70%), with 37% in the
top quartile.
The decline from the prior year was due to two
funds which marginally moved into the third
quartile at the very end of December 2021.
Over one year, 80% of AUM outperformed
and over five years the figure was 68%.
Why this is important
Investment performance is the lead
indicator for our continued success and
demonstrates our competitive advantage in
delivering investment excellence for clients.
Despite another year of record gross flows of
£16.5bn, we saw total net outflows of £3.8bn
(2020: net outflows of £4.0bn).
Redemptions were primarily from areas where
retail client demand was muted, such as UK and
European equities, or where there were specific
performance concerns.
We generated net inflows into key growth areas
such as Global Sustainable Equities, NZS Capital’s
global equity strategies and a number of recently
launched products.
Why this is important
Net flows are a lagging indicator of investment
success, reflecting our ability to deliver
investment performance that attracts client
funds, and to grow our distribution.
OTHER KEY METRICS
Assets under management (£bn)
£60.5bn
50
43
43
59
61
17
18
19
20
21
Total shareholder return (change
in share price plus dividends paid) (%)
(2)%
49
(48)
48
(27)
(2)
17
18
19
20
21
Surplus capital over regulatory
requirements (£m)
1
£117m
91
118
146
111
117
17
18
19
20
21
1. The 2021 surplus capital figure is under IFPR, which came into effect from 1 January 2022. The comparable
figure under the previous regulatory regime would be £168m. The 2020 figure has been restated from £112m
to £111m to match the final regulatory return.
19
Jupiter Fund Management plc | Annual Report and Accounts 2021
CHIEF FINANCIAL
OFFICER’S REVIEW
our business. Making these changes was an
important step towards ensuring the business is
well positioned to pivot to growth.
Our resources have also been focused on
ensuring we attract, retain and develop talent. At
Jupiter, we pride ourselves on diversity and
inclusion and our cultural pillars help drive the
ability of our people, both individually and
collectively, to be able to put our clients first. We
have undergone significant change in the past
two years and, combined with the disruption of
Covid-19, our focus has remained on providing an
attractive environment for our people in which
they can thrive and deliver value for our clients.
This year we introduced our leading flexible
working arrangements, which balance the
benefits of collective office-based work with
added flexibility in remote working options. As
we welcomed our people back to the office this
year, many for the first time, we launched our
new office environment, focused around working
collaboratively.
As set out in the Chief Executive Officer’s review
on page 10, from an investment capability and
distribution channel perspective, we have
invested resources into areas such as
I am pleased to report strong progress in our financial results,
which now include a full-year contribution from the acquisition
of Merian in 2020.
“Our focus remains
on delivering long-
term growth for
clients and
shareholders through
the strength of our
investment capability
and targeted
investment to realise
our potential.”
Wayne Mepham
Chief Financial Officer
28.7p), as the increase in profitability was partially
offset by the impact of higher levels of share
capital in 2021 due to the issuance of shares in July
2020 as part of the Merian acquisition. Basic
statutory earnings per share increased by 30% to
27.6p (2020: 21.3p).
2021 has been another year of uncertainty and
disruption caused by the Covid-19 pandemic.
Although we are seeing early signs of a more
stable environment, we are not yet in a post-
Covid world. Undoubtedly, the experiences of
the last two years will result in far-reaching
changes – from the type of products our clients
wish to invest in, to the flexibility of the working
environment we provide for our people. We
remain focused on ensuring that Jupiter is agile
and that our client-centric approach continues to
deliver strong investment performance in
products that are relevant to our clients’ changing
needs.
Against this backdrop, we made significant
progress towards delivering on our strategic
goals, reinforced our strong foundations and
invested in areas that are important for the
delivery of long-term growth. Last year, we
announced the restructuring of various parts of
I am pleased to report strong progress in our
financial results for 2021, which included the first
full-year contribution from the acquisition of
Merian. Despite net outflows, positive investment
performance and the impact of Merian resulted
in a 25% increase in our average AUM and an 18%
increase in management fees.
We have also recognised cost savings through
reorganising the business, and synergies that are
enabling us to invest for growth.
We generated significant performance fees this
year and there were continued exceptional costs
through the Merian acquisition. We have
provided additional disclosures to better
illustrate the drivers and trends in our financial
performance, and address the industry and
Jupiter-specific headwinds. These include
separate presentation of the contribution from
performance fee profits, which are shown over
the page.
Overall, profit before tax and exceptional items
increased 21% to £216.7m (2020: £179.0m).
Statutory profit before tax rose 39% to £183.7m
(2020: £132.6m) after the deduction of exceptional
items of £33.0m (2020: £46.4m). Underlying
earnings per share was up 10% at 31.7p (2020:
20
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
sustainability, the institutional channel and our
international footprint, building on some of the
foundations that we have made in the past. We
are already seeing strong signs that these can
meaningfully contribute growth for the Group.
Nevertheless, in 2021 we continued to be
impacted by net outflows in some of our
established capabilities and, as a result, we have
not yet moved to sustained growth in our net
flows. Some of those established capabilities are
being impacted by current investor trends.
Sustainability has been an area where there has
been an acceleration in interest recently. Jupiter
has always been highly active in this space, and
our policy of active engagement has meant that
ESG has been an important part of our
investment philosophy. Our focus on
sustainability and social matters has developed
over this time and we are well placed as investor
demand has grown. In 2021, we reaffirmed our
commitment to sustainability and concentrated
efforts in this area in terms of both our offering
and recruitment of talent. At an investment
strategy level, we now hold more than £1bn of
AUM in sustainable funds, and we saw net flows
in the year of around £200m. With SFDR coming
into force for EU-domiciled funds, we have
launched new sustainability products early in
2022.
From a regional perspective, we remain focused
on our UK market while also developing clear
opportunities for the Group internationally. In
the US, we are building on our strategic
partnership with NZS Capital and have enhanced
our institutional client capabilities in Denver, as
well as introducing an office in New York,
focused on fixed income analysis. We also see
opportunities across other international regions
and we are establishing an on-the-ground
presence in Australia. Our focus on growing our
institutional business requires investment in the
short term, with interesting client opportunities
already starting to emerge.
We continue to make investments in each of
these areas as we see the opportunity for them
to drive growth in the future.
Our 2021 AUM ended the year at £60.5bn, a £1.8bn
increase on the prior year despite £3.8bn of net
outflows. This is a record level of year-end AUM
for Jupiter, driven by strong investment
performance. Our AUM, from segregated
mandates and a broader institutional client base
is largely unchanged over that period but we
have a strong pipeline of well-progressed client
demand that is expected to deliver growth.
Although 2021 has been another challenging year
from a net flows perspective, we continue to
have strong client demand. We have worked hard
towards returning the Group to a net inflow
position and see strong signs from our growth
areas.
Against this backdrop, we delivered good
financial results, demonstrating the benefit of the
Merian acquisition and again bolstered by
exceptional levels of performance fees earned
this year.
Our focus in 2021 has been on ensuring we are
committing capital in the right areas to deliver on
our strategic goals. This investment is principally
through our income statement, with no current
balance sheet demands. We have retained a
robust capital position following the
implementation of the new Investment Firms
Prudential Regime (IFPR) in 2022. We will embed
this process and consider additional returns of
capital at the end of 2022, in line with our
commitment to return capital to shareholders
when it is not required in the business.
We continue to face headwinds in a number of
areas and it is important that we direct our
resources to areas that will address these and
support long-term growth.
2021 2020
Before
exceptional
items and net
performance fees
£m
Performance
fee profits
£m
Total
£m
Before
exceptional
items and net
performance fees
£m
Performance
fee profits
1
£m
Total
£m
Net revenue
1
455.6 113.0 568.6 384.2 63.6 447.8
Fixed staff costs (73.0) – (73.0) (76.1) – (76.1)
Variable staff costs (79.1) (60.9) (140.0) (58.1) (27.7) (85.8)
Non–compensation costs (125.9) – (125.9) (103.2) – (103.2)
Administrative expenses
2
(278.0) (60.9) (338.9) (237.4) (27.7) (265.1)
Other (losses) /gains (4.4) – (4.4) 3.3 – 3.3
Amortisation of intangible assets
3
(1.8) – (1.8) (1.9) – (1.9)
Operating profit before exceptional items 171.4 52.1 223.5 148.2 35.9 184.1
Finance costs (6.8) – (6.8) (5.1) – (5.1)
Profit before taxation and exceptional items 164.6 52.1 216.7 143.1 35.9 179.0
£m
Statutory profit before tax 131.6 52.1 183.7 86.7 45.9 132.6
1. 2020 net revenue is stated after £10.0m of revenue classified as exceptional
2. Administrative expenses exclude £14.2m classified as exceptional (2020: £47.0m)
3. Amortisation of intangible assets excludes £18.8m classified as exceptional (2020: £9.4m)
21
Jupiter Fund Management plc | Annual Report and Accounts 2021
CHIEF FINANCIAL OFFICER’S REVIEW continued
Assets under management (AUM)
AUM increased by 3% to end the year at £60.5bn
(2020: £58.7bn). Average AUM was £59.7bn, an
increase of 25% on 2020, driven by the inclusion
of a full year of AUM acquired through Merian on
1 July 2020.
We maintained gross flows at record levels of
£16.5bn, but a combination of continued
consumer preference for growth strategies and
muted demand for equities, particularly in the UK
and continental Europe, resulted in these flows
being more than offset by redemptions, with
total net outflows in the year of £3.8bn (2020: net
outflows of £4.0bn). However, strong investment
performance in rising markets enabled the Group
and investors to benefit from market returns in
excess of these flows at £5.6bn.
Client redemptions predominantly came from
those strategies which are in areas of weaker
client demand. These included UK equities, which
saw £1.6bn of net outflows, and European
Growth, which saw £0.9bn of net outflows. The
Merlin range continued to see outflows of £0.6bn
and the Systematic range saw £1.3bn of net
redemptions, predominantly from the North
American fund.
More positively, a number of our recently
launched products have continued to grow and
generate net inflows. Global Sustainable Equities
has seen net inflows of £0.2bn and we have
launched a Luxembourg-domiciled SICAV vehicle
to make the strategy available to a wider range of
clients. We now have over £1bn across our
sustainability-labelled product ranges. Our
partnership with NZS Capital continues to
generate strong growth, with the global equity
strategy generating over £0.3bn of net inflows
this year with gross AUM of over £1bn.
The Chrysalis Investment Trust grew to £1.4bn of
AUM, following capital raises in March and
December 2021 and strong investment
performance. Elsewhere, the Gold & Silver fund
generated almost £0.3bn of net inflows and the
Strategic Absolute Return Bond saw clients invest
net new business of over £130m.
Net revenue
Financial markets generally improved in the year,
but demand for financial investments was spread
unevenly between products, with investors
understandably favouring defensive stocks and
safe harbours for their savings.
Revenue in the year was £617.8m (2020: £500.5m),
with net revenues of £568.6m (2020: £457.8m), of
which performance fees contributed £113.0m
(2020: £73.6m).
Net revenue (£m) 2021 2020
Net management fees 453.7 384.0
Net initial charges 1.9 0.2
Performance fees
1
113.0 73.6
Net revenue 568.6 457.8
Reclassified revenue – (10.0)
Adjusted net revenue 568.6 447.8
Revenue 617.8 500.5
1. Includes performance fees of £10.0m in 2020 that have
been used to reduce an exceptional cost (see APMs on
pages 181 to 183)
Net revenue increased by £110.8m to £568.6m.
The majority of the increase in net revenue came
through net management fees, which increased
by £69.7m to £453.7m. This was driven by higher
average AUM, which increased by £11.9bn to
£59.7bn, reflecting a full year of AUM acquired
through Merian along with the net increase in
AUM in 2021 set out above. The impact of this
increase in average AUM was partially offset by
lower net management fee margins.
Our average net management fee margin reduced
from 79bps in 2020 to 76bps for 2021. This
reduction was largely due to the full-year impact
of the acquisition of the lower-margin Merian
business, as well as other changes in business mix
towards products and client mandates earning
lower fee rates.
In 2021 we earned substantial gross performance
fees, increasing from £73.6m in 2020 to £113.0m.
We have the potential to generate performance
fees from nine funds, along with a number of
segregated mandates.
In 2020, performance fees were principally earned
from four fund mandates as well as one
segregated account. In 2021, these performance
fees were mainly generated through the Chrysalis
Investment Trust, along with a number of small
fees from other funds. The Chrysalis performance
fee reflects the strong investment performance
generated in the financial results to 30 September
2021. Following the receipt of this performance
fee, we have agreed to discuss potential fee
structures for this investment trust which are
expected to be announced later in 2022.
Movement in AUM by product (£bn)
31 Dec 2020 Net flows Market returns 31 Dec 2021
Mutual funds 49.9 (3.1) 4.1 50.9
Segregated mandates 7.9 (0.8) 1.3 8.4
Investment trusts 0.9 0.1 0.2 1.2
58.7 (3.8) 5.6 60.5
22
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
Administrative expenses
Despite some headwinds during the year, we
remained focused on cost control, alongside
targeted investment. We implemented changes
to our operating model, restructuring to position
resources in areas of growth. This resulted in
some changes in how we operate and allocate
resources, unfortunately including some
redundancies within the Group.
We also concentrated on ensuring we have an
attractive incentive package and a balanced
allocation between fixed and variable pay. As the
variability of the significant performance fees we
earned in 2020 and 2021 can distort the
underlying trend, we have reported these
separately in the tables that follow.
We have maintained our focus on managing the
efficiency of our operating model, undertaking a
project during the year to streamline our service
providers following the increase in suppliers that
came with the Merian acquisition.
Going forward, investment for growth and
operational agility will continue to be at the
centre of our approach to cost management, as
well as ensuring we attract and retain talented
people and have a robust control environment.
In 2021, as in the previous year, we have
separately presented certain items as exceptional.
These principally comprise costs relating to the
Merian acquisition that are required to be spread
over multiple years and which are therefore a
continuation of certain exceptional items we
disclosed last year. In 2021, such costs comprise
amortisation of intangible assets and accounting
charges relating to the timing of expense
recognition for deferred compensation awards
linked to the acquisition and the restructuring
referred to above.
Costs by category (£m) 2021 2020
Fixed staff costs
1
73.0 76.1
Variable staff costs
before performance
fee-related costs
1
79.1 58.1
Other expenses
1
125.9 103.2
Administrative
expenses before
performance
fee-related costs
1
278.0 237.4
Performance fee
related variable staff
costs
60.9 27.7
Administrative
expenses
1
338.9 265.1
Exceptional items 14.2 47.0
Administrative
expenses
353.1 312.1
Total compensation
ratio before
performance fees
1
33% 35%
Total compensation
ratio
1
37% 35%
Operating
margin before
performance fees
1
38% 39%
Operating margin
1
39% 41%
1. Stated before exceptional items (see APMs on pages 181
to 183).
Before performance fee-related variable staff
costs and exceptional items, administrative
expenses were £278.0m (2020: £237.4m), 17%
higher than in 2020. A significant part of this
increase relates to the first full year of costs
relating to the Merian business, which we
acquired on 1 July 2020. We have delivered
savings through integration and restructuring and
have used these savings to make investments in
areas where we see the potential for growth.
We continue to pursue a disciplined approach to
cost management which enables us to allocate
resources effectively whilst managing ongoing
cost headwinds.
Fixed staff costs before exceptional items
decreased by £3.1m as a result of restructuring
programmes to remove duplicated roles after the
Merian acquisition, and to reposition the Group
by concentrating investment in areas of growth.
We ended the year with 579 heads operating in
the business, and a further six heads within our
strategic partnership with NZS Capital. Average
headcount for the Group in 2021 decreased from
593 to 584.
In 2021 we continued to support the
Investment20/20 programme, increasing our
cohort to 17 heads. Following our focused review
of strategic priorities, we targeted headcount
increases into areas of growth, notably in
sustainability, institutional and our international
business. This has increased our costs in 2021, as
we reinvested the savings identified above.
Targeted headcount increases, and ensuring our
reward packages are competitive and support the
retention of existing talent, have resulted in some
variable staff cost increases. The proportion of
fixed to variable compensation has moved back
to our historic trend of a greater weighting
towards annual performance-related awards.
Variable staff costs (£m) 2021 2020
Variable staff
costs before
performance fee
related costs and
exceptional items
1
79.1 58.1
Performance fee
related variable staff
costs
60.9 27.7
Variable staff
cost before
exceptional items
140.0 85.8
Exceptional items 7.7 4.1
Variable staff costs 147.7 89.9
1. Stated before exceptional items and performance fee
pay-aways (see APMs on pages 181 to 183).
23
Jupiter Fund Management plc | Annual Report and Accounts 2021
CHIEF FINANCIAL OFFICER’S REVIEW continued
Variable staff costs before performance
fee-related costs and exceptional items increased
from £58.1m to £79.1m. The increase was mainly
due to a full-year of costs relating to the
investment teams that joined us with the Merian
acquisition. In addition, variable staff costs have
increased as we align employees’ variable
compensation with the financial performance of
the Group, which we assess before performance
fees and variable staff costs.
A proportion of our variable compensation
comprises deferred bonuses in the form of
share-based and fund-linked awards. The
accounting charge for fund-linked awards is
linked to the fair value of the relevant funds. We
hedge such movements in the value of these
awards by purchasing units or shares in the
underlying funds, although accounting timing
mismatches occur between the recognition of
gains or losses on the units or shares and the
recognition of the corresponding gain or loss on
the deferred variable compensation awards. In
2021, this mismatch, which resulted in a net
increase in costs, arose principally on
performance fee-related awards.
Other factors driving the increase in the Group’s
variable compensation were movements in
Jupiter’s share price and the UK Government’s
decision to increase the UK rate of national
insurance contributions by 1.25% from April 2022,
the net result of which was to increase social
security costs on deferred awards.
The performance fee-related variable staff costs
include both cash and deferred elements. The
charges for the deferred elements are required to
be spread over a number of accounting years. We
expect that charges arising from the 2020 and
2021 performance fee earnings will continue to be
recognised until 2025.
The Group’s total compensation ratio before
performance fees and exceptional items
decreased from 35% to 33%, reflecting the
efficiency savings arising as a result of the
completion of the Merian integration, partially
offset by cost headwinds and investment
expenditure. The Group’s total compensation
ratio increased from 35% to 37%. This reflected
both the deferred costs of prior year
performance fees and the current year costs of
performance fees earned in 2021. Charges for
deferred variable staff costs are required to be
spread over the relevant vesting period.
Other expenses have increased due to a full year
of Merian costs, but also include certain one-off
costs relating to foreign exchange and historic
tax-related charges. Other factors contributing
towards the increase in costs included
administrative costs largely linked to AUM levels
and expenditure on specific investments in data,
research and marketing, as we target areas that
are expected to deliver long-term growth.
The Group’s operating margin decreased from
41% to 39%. The 2020 operating margin benefited
from the impact of performance fees and the
requirement to charge deferred bonus awards
over the vesting period, with no brought-forward
charges. In 2021, the operating margin has been
impacted by brought-forward charges, along with
different cost tiering structures for the
current-year performance fees.
The operating margin excluding performance fee
profits decreased by one percentage point from
39% to 38%. This is largely driven by gains on
financial instruments in 2020 compared with
losses in 2021, which are explained further below.
Exceptional items
Exceptional items are items of income or
expenditure that are significant in size and which
are not expected to repeat over the short to
medium term. Such items have been separately
presented to enable a better understanding of
the Group’s financial performance. Where
appropriate, such items may be recognised over
multiple accounting periods. In 2021, exceptional
items were £33.0m (2020: £46.4m) and were
mainly accounting charges arising from the
acquisition of Merian that, due to their nature,
are required to be spread over more than one
financial year. The charges in 2020 were primarily
acquisition-related, including transaction and
integration costs and certain other costs.
2021
£m
2020
£m
Acquisition-related
Transaction costs – 12.7
Integration and
related costs
– 26.6
– 39.3
Amortisation of
acquired intangible
assets
18.8 9.4
Deferred
compensation costs
related to the
acquisition
7.7 3.7
Performance fees
attributed to the
seller’s obligation
– (10.0)
Total acquisition-
related
26.5 42.4
Non-acquisition
related
Redundancy
programme and other
compensation costs
6.5 4.0
Exceptional items 33.0 46.4
The acquired intangible asset of £75.0m relating
to the Merian acquisition in 2020 is being
amortised over four years. An annualised charge
of £18.8m (2020: £9.4m) is therefore expected to
be recognised until June 2024.
24
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
The Group incurred acquisition costs in the form
of deferred earn out awards to certain former
Merian shareholders. These are required to be
treated as compensation costs as they include
employment criteria and are charged over a
three-year period. Vesting of these awards is
contingent on meeting certain performance
conditions on 1 July 2023.
Across both 2020 and 2021, the Group incurred
redundancy and other compensation costs,
recognising costs of £6.5m (2020: £4.0m) as part
of a targeted post-integration restructuring
programme, reviewing the structures, systems
and processes of the Group. Following the
completion of this programme, no further
redundancy costs are expected to be reported as
exceptional costs in the foreseeable future.
Other income statement movements
Other losses of £4.4m (2020: gains of £3.3m)
principally comprised losses of £2.9m (2020: loss
of £0.4m) on seed investments, net of hedges,
and including dividend income, and a £1.5m loss
(2020: £3.7m gain) on a forward contract taken
out to hedge share-based compensation awards
to staff. Seed investments are hedged for market
beta risk, usually by taking a short position on a
fund’s benchmark, where it is possible to do so,
and foreign exchange risk through the purchase
of forward currency contracts. Gains and losses
therefore generally arise from under or
overperformance against a fund’s benchmark, as
well as the costs relating to the beta hedge. In
2021 we recognised gains after hedging and
related costs across the majority of our seed
portfolio, offset principally by losses from a single
fund.
Finance costs
Finance costs of £6.8m (2020: £5.1m) have
increased principally as a result of the recognition
of a full year of interest charge on the £50m
subordinated debt issued in April 2020.
Profit before tax (PBT)
Statutory PBT for the year increased by 39% to
£183.7m (2020: £132.6m) mainly as a result of higher
levels of management and performance fee
income, partially offset by a higher cost base
relating to performance fees, a full year’s worth
of post-Merian costs and net cost increases in
other areas, principally focused on areas of
growth. Excluding exceptional items and net
performance fees, PBT increased by 15% to
£164.6m (2020: £143.1m).
Tax expense
The effective tax rate for 2021 was 18.6% (2020:
20.6%), marginally below the headline UK
corporation tax rate of 19.0% (2020: 19.0%). The
difference is due to net tax credits relating to
future tax deductions on deferred compensation
and additional tax credits available in respect of
prior year tax submissions. Our published tax
strategy is available from our website at
www.jupiteram.com.
Earnings per share (EPS)
The Group’s basic and diluted statutory EPS
measures were 27.6p and 26.9p respectively
in 2021, compared with 21.3p and 20.8p in 2020.
Underlying EPS, defined as underlying profit after
tax divided by the weighted average number of
shares in issue (see page 144), was up 3.0p at 31.7p
(2020: 28.7p).
Excluding performance fees, underlying EPS was
up 1.2p at 24.1p (2020: 22.9p).
2021 2020
Statutory profit
before tax
183.7 132.6
Exceptional items 33.0 46.4
Performance fee
profits
1
(52.1) (35.9)
Underlying profit
before tax before
performance fee
profits
164.6 143.1
Tax at average
statutory rate of 19%
(31.3) (27.2)
Underlying profit
after tax before
performance fee
profits
133.3 115.9
Statutory profit
before tax
183.7 132.6
Exceptional items 33.0 46.4
Underlying profit
before tax
216.7 179.0
Tax at average
statutory rate of 19%
(41.2) (34.0)
Underlying profit
after tax
175.5 145.0
Weighted average
issued share capital
553.1 505.4
Underlying EPS
before net
performance fees
24.1p 22.9p
Underlying EPS 31.7p 28.7p
Basic EPS
2
27.6p 21.3p
1. Excludes £10m of performance fees classified as
exceptional items.
2. See Note 9 to the accounts.
Cash flow
The Group generated positive operating cash
flows after tax in 2021 of £188.9m (2020: £104.6m),
representing 126% (2020: 99%) of statutory profit
after tax. Net outflows from investing activities
of £12.0m (2020: inflows of £63.9m) principally
constituted net investment into seed capital.
Outflows from financing activities of £167.7m
(2020: £159.8m) included dividend payments of
£109.8m made to shareholders and £48.5m of
shares purchased by the Employee Benefit Trust
(EBT) to hedge deferred compensation awards
to employees in the form of Jupiter shares.
The net increase in cash in the period was £9.2m
(2020: £8.7m increase).
Assets and liabilities
The Group’s cash position at the year-end date
was £197.3m (31 December 2020: £188.1m), as net
cash receipts from trading profits were offset by
dividend payments to shareholders and payments
to the EBT. Payment of the performance fees
earned in the year was made in 2022, with 54% of
the Chrysalis performance fees received in
Chrysalis shares to match the deferred bonus
awards and related employment taxes.
The Group’s issued debt of £50m is repayable in
July 2030 or, at the Group’s option, from April
2025. The revolving credit facility of £80m
provides additional access to liquidity. The
three-year facility, which expires in April 2023,
was not drawn in the year.
Underlying profit before tax
£216.7m
2020: £179.0m
Underlying earnings per share
31.7p
2020: 28.7p
25
Jupiter Fund Management plc | Annual Report and Accounts 2021
CHIEF FINANCIAL OFFICER’S REVIEW continued
Seed investments
We deploy seed capital into funds to support
their growth, to ensure an effective launch and to
accelerate the process of raising assets over
critical size thresholds. As at 31 December 2021,
we had a total investment in Jupiter funds of
£142.3m (31 December 2020: £138.3m) at fair value.
Capital management
The Group remains profitable. Statutory profits
after tax were partially offset by distributions
made to shareholders, in line with our dividend
policy. Funding of the EBT, net of credits relating
to share-based payments, and tax movements in
reserves reduced reserves by £22.7m in the year.
The net movement in total shareholders’ equity
was an increase of £14.7m to £900.8m.
The parent company of the Group, Jupiter Fund
Management plc, has distributable profits of
£184.9m (2020: £221.3m). The payment of
dividends by the Group is limited by its
regulatory capital and liquidity requirements. The
Group seeks to maintain a balance between
providing returns to shareholders and maintaining
sufficient capital and cash reserves to support its
business activities. As well as providing sufficient
liquidity to be able to meet all its liabilities as
they fall due, the Group’s working capital
provides funding for seed investments to support
both new and existing fund products and
strategies.
Dividends and returns of capital
Jupiter has a progressive ordinary dividend policy
and our intention is for the ordinary dividend
pay-out ratio to be 50% of underlying EPS across
the cycle. In the event that current year profits
are lower than in previous years, the Group
maintains the ordinary dividend at the previous
high-water mark pence per share level. The Board
normally makes additional returns of capital to
shareholders after retaining sufficient earnings for
capital and growth. These additional returns of
capital have previously been made through a
special dividend.
The Board considers the dividend on a total basis,
taking into account our resilient balance sheet
and long-term approach to running the business.
The Board’s intention is to use profits and cash
flow to pay ordinary dividends, to retain
sufficient capital to maintain a strong balance
sheet and meet regulatory requirements, and to
return excess cash to shareholders according to
market conditions at the time.
The Board proposes an unchanged full-year
ordinary dividend for the year of 9.2p per share.
This results in a total ordinary dividend for the
year of 17.1p, the same as 2020, representing an
ordinary dividend underlying pay-out ratio of
54% of underlying earnings.
The Jupiter Board’s priority continues to be to
maintain its capital strength, including a robust
surplus over regulatory capital requirements and
it remains committed to returning surplus
regulatory capital in excess of needs to
shareholders, aligned to the Group’s capital
allocation framework.
As we continue to strategically invest in organic
growth of the business, the Group’s strategic
requirements for capital are more limited. We
have committed to considering additional returns
of capital for the year ending 31 December 2022.
Our assessment of capital needs will take account
of the end of the transition period under IFPR and
the introduction of the new Internal Capital
Adequacy and Risk Assessment regime (ICARA).
We expect that our additional returns of capital
to shareholders will, in the future, be through a
share buyback programme, rather than as special
dividends.
As in 2020, to promote accountability to our
shareholders, the Board has proposed the
full-year dividend as a final dividend and seeks
approval for this payment at the AGM on 11 May
2022.
Liquidity
The Group’s liquidity comprises cash available for
use in the business, supported by an undrawn RCF
of up to £80m. The Group maintains a consistent
liquidity management model, with liquidity
requirements monitored carefully against the
existing and longer-term obligations of the
Group.
Statement of viability
In accordance with provision 31 of the 2020
Corporate Governance Code, the Directors have
assessed the prospects of the Group over a
longer period than the 12 months required by the
Going Concern provision.
The Directors confirm that they have a
reasonable expectation that the Group will
continue to operate and meet its liabilities, as
they fall due, at least until 31 December 2024.
The Board’s viability assessment is based on
information known today and with reference to
the Group’s current position and strategy, the
Board’s risk appetite, the Group’s financial plans
and forecasts, and the Group’s principal risks and
how these are managed, as detailed in the
Strategic report.
26
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
The Group defines its long-term strategic
planning objectives over five years and this is
underpinned by a rolling five-year financial plan,
the first year of which is the current year budget.
The further into the future the planning horizon
is, the greater the level of uncertainty in the
financial projections. Therefore, the Group uses a
three-year period in assessing viability in order to
be consistent with the minimum period used in
the Group’s Internal Capital Adequacy
Assessment Process (ICAAP) and financial
projections, and because it has a sharper focus
than the full five-year rolling financial planning
horizon.
The rolling financial plan incorporates both the
Group’s strategy and principal risks and is
reviewed by the Board at least annually when the
budget for the following year is approved.
In exceptional circumstances, the Board reviews
and approves structural changes to the budget
intra-year. These formal approval processes are
underpinned by regular Executive Committee and
Board discussions of strategy and risks, in the
normal course of business.
Details of the principal risks faced by the Group,
and the strategies in place to mitigate exposure
to them can be found in Our Approach to Risk
Management, beginning on page 60.
Throughout the year the Board assesses progress
by reviewing forecasts compared to the budget
and longer-term projections compared to the
financial plan. The current year forecast and
longer-term financial projections are regularly
updated as appropriate and consider the Group’s
profitability, cash flows, dividend payments, share
purchases, seed investments and other key
internal and external variables. Scenario analysis is
also performed as part of both the Group’s
financial planning process and within the Group’s
ICAAP, which is approved by the Board. These
scenarios evaluate the potential impact of severe
but plausible occurrences, which reflect the
Group’s risk profile and identify and model
appropriate and realistic management actions
that could be taken to mitigate the impact of the
scenarios on capital and liquidity.
In the most recent ICAAP, approved by the Board
in July 2021, scenarios included:
• sustained market downturn, combined with an
operational risk event and a significant loss in
the seed portfolio;
• the failure of internal policies, leading to a
regulatory breach; and
• a discrimination tribunal and dismissal of a key
fund manager.
Primary management actions to relieve stresses
on the Group’s ability to operate during these
scenarios are reductions in variable compensation
costs, reducing returns to shareholders, and
disposal, where possible, of seed investments to
provide additional liquidity.
The Group also considers the correlation
between different levels of AUM and
profitability, modelling the impact of and
sensitivity to market movements which directly
affect the value of AUM and therefore the
Group’s revenues.
We believe that the statement of viability
continues to reflect our internal financial
planning, budgeting, forecasting, review and
challenge processes which assess profitability, as
well as those through which we assess risk
exposures arising from the implementation of the
Group’s operational strategy.
The Strategic report found on pages 1-67 has
been duly approved by the Board and signed on
its behalf by:
Wayne Mepham
Chief Financial Officer
24 February 2022
27
Jupiter Fund Management plc | Annual Report and Accounts 2021
FOCUSED
At Jupiter, our clients are our
focus and our priority. As a
company, we exist to help our
clients achieve their long-term
investment objectives and to
act as responsible stewards of
their money.
This fundamental purpose is embedded within
our culture and is the basis of all our decisions.
As a specialist, high-conviction, truly active asset
manager, we don’t follow trends, or go with the
crowd. We believe that our clients are best
served by dedicated investment specialists who
take a focused approach to investment. Since the
Group was founded in 1985, investors have
looked to Jupiter for actively-managed, high-
conviction portfolios in differentiated, specialist
strategies, and this is an approach which we
continue to stick to today.
Strength in conviction
Conviction is at the heart of our investment
culture. We have no house view when it comes
to investing. Instead, we allow our talented fund
managers the freedom and autonomy to form
their own opinions and follow their convictions
– always supported by a dedicated central CIO
office.
AUM and cumulative net flows from strategies launched since 2018 (£bn)
“As a high-conviction, truly active asset manager,
we have a unique opportunity to effect change by
engaging with and influencing the companies in
which we invest, encouraging them to adopt more
sustainable business practices.”
STRATEGIC REPORT
£3.6bn
AUM from strategies
launched since 2018
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
0.0
0.5
1.0
1.5
2.0
2.5
FY18
FY19 FY20
FY21
2018
2019
2020
2021
Cumulative net flows
Strategies launched in:
7 3 7 4
AUM
(£bn)
Number
of newly
launched
vehicles
Cumulative
net flows (£bn)
28
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
CONVICTION
“Taking an agile
approach to investing,
our talented fund
management team is
able to adapt to new
environments quickly
while never losing sight
of the long-term drivers
of performance and
the importance of
good stewardship.”
We apply this same focused approach to the
range of investment solutions on offer to our
clients. At Jupiter we keep all of our products
under constant review to ensure that the whole
range is suitable and attractive to our clients at all
times. There are a number of reasons why
products might not be successful, including
changing market appetite. Where this is the case,
we take action. When we look to grow our
product range, our focus is on selectively and
strategically adding strength in key target
strategies. Rather than looking to provide blanket
coverage across all asset classes, we focus only
on those areas in which we believe we can deliver
real value for our clients.
Focus in a changing world
Focusing on our strengths does not mean
standing still while the world around us changes.
Climate change, and society’s response to it,
means that investors are increasingly focused on
how the companies in which they invest are
positioned for a changing world.
At Jupiter we believe that the future, and our
clients, are better served by sustainable
companies with strong environmental credentials.
As a high-conviction, active asset manager, we
have a unique opportunity to effect change by
engaging with and influencing the companies in
which we invest. This is true not just of the funds
within our sustainability suite, but across our
entire fund range. Over the course of 2021 we
added meaningful strength to our ESG
capabilities, both within our dedicated
sustainable funds, and across our fund
management team, adding ESG expertise into the
heart of a number of our key strategies.
We will continue to invest behind this success
through 2022.
Our fund manager-led approach to stewardship
differs by strategy and asset class, but it is always
centred on improving client outcomes. We
believe that conviction in our ideas, a focus on
our strengths and a thorough grounding in our
role and responsibility to the world around us will
result in sustainable, long-term gains for all of our
stakeholders. More on our approach to
sustainability can be found on page 40.
DECISIONS THAT SPARK
LONG-TERM OPPORTUNITIES
SHOW THE VALUE OF ACTIVE MINDS
29
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC AND OPERATING REVIEW:
INVESTMENT MANAGEMENT
We have a diverse product range, covering both
developed and emerging market equities, fixed
income, multi-asset and alternatives strategies.
However, we remain focused on specialist
strategies where we believe we can deliver
high-quality, sustainable performance to
our clients, and differentiate ourselves from
our peers.
We do not have a house view, but rather
empower our fund managers with a high degree
of autonomy to follow their convictions.
We pride ourselves on this approach and our
culture which puts clients first and allows our
talented fund managers the freedom and
responsibility to pursue their own, clearly defined
investment approach and philosophy.
Following the acquisition of Merian last year,
which significantly improved the depth of our
investment expertise, we have been delighted
this year to welcome our new colleagues back to
the office. We have worked hard on reinforcing
that strong culture after more than 18 months of
remote working.
Throughout the year, we have maintained our
focus on sustainable investing, with new resource
across the investment team and the launches of
new SFDR Article 8 - and 9-compliant products.
We continue to evolve our market-leading fixed
income capabilities and have again invested in our
data insights capabilities.
A focus on sustainability
and active engagement
We believe that better run companies perform
better. As an active manager that takes
high-conviction positions in our investee
companies, we believe that we have a key role to
play in engaging with these companies and driving
better, sustainable outcomes for our clients.
To this end, all of our fund managers are required
to embed ESG risks and considerations into their
investment processes, helping our investee
companies improve their ESG practices.
We also have a range of products dedicated to
investing in those companies leading the
transition to a more sustainable economy.
We have invested additional sustainability-
focused resource across the group this year.
As well as adding new headcount within the
stewardship team, we have also put a number of
ESG investment directors in place, who will drive
the sustainability agenda across their product
ranges.
Early in 2021, we made a number of senior
appointments within our sustainability team,
ensuring that we had the correct suite of
products to continue to offer clients a range of
differentiated investment options with a shared
goal of generating attractive returns through
long-term sustainable investing.
Through this team restructuring, Abbie Llewellyn-
Waters became Head of Sustainable Investing,
leading the firm’s sustainable investing capability.
Concurrently, Rhys Petheram took on a new role
as Head of Environmental Solutions, analysing and
investing in companies that are focused on
providing solutions to sustainability challenges
across key environmental themes.
More details on our stewardship activities and
approach to sustainable investing can be found
on page 40.
Top 10 largest funds by AUM
AUM
(£bn)
3-year
quartile
ranking
Dynamic Bond 8.4 1
European 4.6 2
Strategic Bond 4.4 3
UK Mid Cap 3.3 1
Merlin Income 2.1 1
UK Special Situations 2.0 4
Merlin Balanced 2.0 3
Merlin Growth 1.8 2
North American Equity 1.8 3
Income Trust 1.4 4
Broad fixed
income capabilities
We have continued to invest in our strong fixed
income capabilities this year. We have
significantly diversified this area over recent years
and have a broad depth of investment expertise.
We manage around £15bn of our clients’ AUM,
across 12 strategies run by more than 30
investment professionals – ensuring that we have
the right products for our clients regardless of
the market or inflationary environment.
Through 2021, we have deepened our investment
expertise with the addition of credit analysts
based in our newly-opened office in New York.
We have reinforced the rapidly growing Strategic
Absolute Return Bond fund team and
repositioned our Emerging Market Debt range.
We have also broadened our product range with
new ESG-focused funds. Global Ecology Bond is
an Article 9-compliant product from our
environmental solutions team and Dynamic Bond
ESG is an Article 8-compliant version of our
flagship global unconstrained fixed income
strategy. Both of these were launched in early
2022.
At Jupiter, our clients are at the centre of everything we do. We are committed to managing
truly active portfolios, taking high-conviction positions in the companies in which we invest,
actively engaging with them to create better, more sustainable outcomes for our clients.
30
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
ACTIVE PERFORMANCE DRIVEN
BY DATA INSIGHTS
We have continued to invest this year in our data science capabilities. The
function was founded in late 2018 as a team of one. The team has grown to 11
data scientists and engineers, with more key hires to be made in 2022.
The team’s purpose remains unchanged – to integrate data science across the
organisation and to provide data-driven insights to our investment
professionals, which help them make better decisions for our clients’ benefit.
The team does not manage money itself, but provides analysis and insights
from often complex and large datasets, which our fund managers would
otherwise not have access to. The additional datasets we have invested in this
year include those on brand favourability, internet activity and employee
feedback.
The previous year saw the launch of the ESG Hub, an internal proprietary
platform that gathers, cleanses and presents ESG data from both third-party
providers and in-house holdings data. We have continued to invest in
developing the platform this year, incorporating third-party carbon data and
expanding our coverage to include fixed income holdings.
The team have broadened their reach this year, working in collaboration with
our investment teams. As we have expanded our capabilities, the team has
been able to provide analysis and signals to our fund managers, whether to
answer an individual stock question or across a wide sector or theme, often
many months before it features in external research.
DATA-DRIVEN INSIGHTS
58%
Mutual fund
outperformance
2020: 70%
14
funds with over
£1bn in AUM
2020: 13
Link to core objectives:
1
3
4
> For more information see page 17
Link to principal risks:
1
2
> For more information see page 60
Focused on investment excellence
As an active asset manager, our key priority is
delivering high quality investment performance
for our clients. Through 2021, we have again
delivered strong performance.
At 31 December 2021, 58% of our mutual fund
AUM across the group delivered above median
performance over three years (2020: 70%), with
37% achieving top-quartile performance. The
decline from the prior year was due to very
short-term performance declines in two funds in
December 2021.
Performance over other time periods remained
strong, with 80% delivering above median
performance over one year and 68% over five
years.
The table to the left shows the three-year
investment performance of our ten largest funds.
Our assets are more diversified across our
product range than last year. We now have 14
funds with over £1bn of our clients’ AUM, up from
13 a year ago.
31
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC AND OPERATING REVIEW:
PRODUCT AND DISTRIBUTION
Broader expertise in the
institutional channel
Expanding our reach within the institutional
channel remains a key focus for us and a
significant opportunity for growth. Currently,
8% of our AUM are through the institutional
channel, but we have targeted growing this to
20% in the medium term.
A more direct client relationship, and typically
greater longevity, means that we can build
deeper relationships with our institutional clients
and provide exceptional quality of client service.
This is increasingly expected by all of our clients
and seen as a differentiator, in addition to
investment performance.
Through 2021 we have continued to invest in this
area. We have committed new resource,
including new senior hires in the UK and Asia and
a growing presence in the US. As we move into
2022, additional investment will take place
including in the consultant database and RFP
teams and hires in continental Europe.
A number of our key products are ideally placed
for institutional markets around the world, such
as Global Sustainable Equities, unconstrained
global fixed income and NZS Capital’s global
equity strategies. While not a guarantee of future
flows, gaining ‘buy’ recommendations from global
consultants is often viewed as a key precursor.
This year, we have greatly increased our standing
amongst global consultants and we now have 15
‘buy’ ratings across nine strategies, more than half
of which were gained this year.
A wider global footprint
In 2020, the acquisition of Merian allowed us to
consolidate and strengthen our leading position
within our home market of UK retail. This year we
were able to expand our outlook and focus
specific investment into our overseas businesses.
Our initial focus has been on the US, having
opened our first presence in Denver in 2020, both
supporting the NZS team and initiated our move
into the US institutional market. Through this
year, we have grown that resource with a greater
distribution presence and a carefully selected
product designed to appeal to the US
institutional market. We have also established an
investment office in New York with three credit
analysts. The US market, with half of the world’s
investible assets, remains a material opportunity
for Jupiter and one in which we continue to
invest.
We are extending our global reach to the
Australian market and are actively engaged in
discussions on investment solutions we can offer
to Australian-based institutional clients. The
Australian market is one that is dominated by the
institutional channel and, much like the US, one
which is likely to favour our Global equity
capabilities, such as Global Sustainable Equities
and NZS Capital.
We are also developing our relationship with Ping
An in China, which we inherited through Merian.
In 2021, Ping An took over management of our
China Equity product and we are working with
them to develop this relationship further through
2022.
Overall, more than £17bn of our AUM is from
clients based overseas, a near 70% increase since
2018.
A high-conviction, genuinely active
product range
As a high-conviction asset manager, we focus our
resources on the areas in which we believe we
can help our clients achieve their financial goals.
This client-led approach naturally leads us to a
carefully designed product line-up focusing on
our areas of specialist capabilities, with no desire
to achieve ‘waterfront’ coverage.
Over recent years, we have continued the
process of rationalising our product range, to
ensure we have the right products in the right
jurisdictions. Over the last three years, we have
closed some 18 products, resulting in a more
focused, targeted product range.
We will, however, always continue to evolve our
product range, including with significant
investment in new strategies through seed
capital. Where we have launched new products,
these have predominantly been ESG-focused,
such as the Article 8-compliant Dynamic Bond
ESG and the Article 9-compliant Global Ecology
Bond, which have expanded our sustainability
range into fixed income. Both of these products
were launched in January 2022.
We have also launched new vehicles in existing
strategies, such as a Luxembourg-domiciled
SICAV for Global Sustainable Equities and both
Luxembourg and Delaware LP vehicles for NZS
Capital’s global equity strategies.
A focus on sustainability
Jupiter has a long history of delivering investment
performance for our clients through responsible
investing. Our approach is based on active
engagement with the companies in which we
invest, something which we believe is best
achieved on an active basis. More detail on our
approach to stewardship and sustainable
investing can be found on page 40.
Throughout 2021, we have continued to invest for growth in the business. While delivering
exemplary service to our existing clients, we have explored new opportunities, whether through
sustainability-focused products, the institutional channel or a broader footprint overseas.
£17.5bn
assets from clients
based outside the UK
12
products accredited
as SFDR Article 8 or 9
£5.1bn
client assets through the
institutional channel
32
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
Throughout this year, we have continued to
invest in this area, with additional resource added
in key positions and new product and vehicle
launches. We have restructured our sustainable
investing and environmental solutions teams to
better align our offering with client demand,
more details on which can be found from page
40.
A key industry focus this year has been on the
approach to the classifying of European-
domiciled funds under the SFDR. Our approach
has been defined by listening to our clients’
preferences and their desire for authenticity.
More details on our authenticity focused
approach to SFDR are on page 49.
We do not plan to change the investment
objectives or limit the investment universe for
any products in which our clients are invested.
However, we appreciate that a number of clients
will prefer to invest in Article 8- or 9-compliant
funds. Therefore, in a select number of cases, we
will look to launch Article 8 or 9 versions of
existing strategies, that are designed to invest
within those stricter criteria. As set out above, we
have already launched the Article 8-compliant
Dynamic Bond ESG and the Article 9-compliant
Global Ecology Bond fund.
Delivering value for money
We remain committed to delivering value for
money for our clients. This year, we published our
second annual Assessment of Value report for
our UK fund range.
In this year’s report, 84% of our funds’ unit classes
received a positive rating of either 4 stars (“has
consistently delivered strong value”) or 3 stars
(“has delivered value”). This is a material
improvement on last year’s 70%, reflecting
improved investment performance and the
introduction of lower priced unit classes for
some investors.
For those funds which received a lower rating this
year, we have been clear about the steps we have
taken, or are taking, to improve the value we
deliver.
Producing the report once again allowed us to
demonstrate to our investors that real client
value derives from a host of different elements.
We look forward to repeating this process in
coming years, with a view to continually
improving the value we deliver to our investors
across the board.
After more than a year away from meeting our clients face-to-
face, we were delighted to once again be able to do so in the
second half of this year. We held a number of safe, Covid-secure
events as local measures allowed, including our successful
London-based investment conference. Our distribution and fund
management teams have also been back on the road in the
second half of this year, and our ‘Meet the Manager’ roadshows
connected with over 225 clients.
RECONNECTING
WITH OUR CLIENTS
“The presenters were all excellent
and the amount and relevance of
the subject matter the best I’ve
heard for some while.”
Jupiter client
“Excellent
presentations.
Great to be back
at a live event.”
Jupiter client
“Insightful,
informative
and interesting.”
Jupiter client
Link to core objectives:
2
3
4
> For more information see page 17
Link to principal risks:
1
2
6
> For more information see page 60
33
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
DIVERSE
Since we began, we have
shaped our investment
identity around a core belief
that we can make a difference
for clients by giving talented
professionals freedom to
pursue their own investment
styles, in a collaborative and
supportive environment.
This diversity of thought means clients have
access to a broad range of views on companies,
markets and the global economy that inform the
investment processes of our fund managers. It
also delivers a diverse product range, giving
clients access to different investment styles
within the same strategy, and the option to select
a fund that suits their risk appetite and
investment objectives. At Jupiter we do not
impose a house view on our managers, precisely
because we know independent thinking delivers
diverse perspectives that ultimately lead to the
best outcomes for our clients. We balance this
freedom with a strong team culture, where our
managers can challenge each other and share
ideas and information. They remain individually
accountable for their performance, and subject
to rigorous internal and external oversight.
When we look to bring in talent, we believe that
businesses with a diverse workforce and an
inclusive culture are stronger and more
sustainable. We know that the best people for
our business do not all have the same
backgrounds or look or sound the same, and that
bringing in people with different ways of thinking
is particularly important.
Jupiter considers diversity and inclusion
company-wide, by region, by function and by
team, as well as at varying levels of seniority. We
also take part in Investment20/20, an initiative
started by our CEO Andrew Formica and
Chairman Nichola Pease to bring more diverse
talent into all aspects of investment management.
In 2021, we chose to nearly triple the number of
entry-level opportunities available for school
leavers and graduates, recognising the last 12
months have been more challenging for young
talent to gain work experience and get a start in
their chosen career, as well as the value that this
brings to Jupiter.
Diversity goes hand in hand with inclusion, and
Andrew Formica has led from the front in his
passionate support to open up the investment
industry to a wider pool of talent. In 2021, Andrew
signed up to a reverse mentoring programme set
up by Investment20/20 and #TalkaboutBlack.
The organisation, which works under the umbrella
of the Diversity Project, aims to create “a pipeline
To mark Pride month, our Jupiter Pride
Network joined together to recite a
powerful poem, written by Kalaavathy,
a gifted LGBT poet, inspired by Maya
Angelou’s “Still, I rise”. Visit our website
to view the video:
www.jupiteram.com/jupiter-pride-
month/
“Independent
thinking delivers
diverse perspectives
that ultimately lead
to better outcomes for
our clients.”
Matthew Beesley
Chief Investment Officer
“Having a truly
diverse workforce
leads to much
greater and
richer outcomes.”
Andrew Formica,
Chief Executive Officer
Claire Mediene, Co-Chair, Jupiter Pride Network
“It’s been a banner year for the Jupiter Pride Network! In June, we were overwhelmed by the
warm response received on social media and from colleagues to a video we recorded for Pride
Month. The video, a reading of a poem by a gifted LGBTQ+ poet, celebrated our community
but also reminded us many LGBTQ+ people around the world continue to live in a climate of
fear and discrimination. We also held a social event to introduce the network to new joiners
over the last 12 months and encourage LGBTQ+ allies to sign up to our Allies Pledge. We look
forward to building on this momentum in 2022, and working with our allies to develop their
pledge into meaningful engagement.”
34
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
Jas Singh, Executive Sponsor, Jupiter Gravity Network
“The Gravity Network is our group focused on addressing cultural and ethnicity aspects of
diversity and inclusion. We chose the name ‘Gravity’ to acknowledge diversity and inclusion as
a force that affects us all while recognising the advancement of some minority groups can be
weighed down by entrenched views, stereotypes, and a lack of opportunity. As a network, we
want to demonstrate how an ethnically and culturally diverse workforce is a source of
competitive advantage for our business, and a benefit to our clients and stakeholders. In the
short term, we seek to boost access for young people from ethnic minority backgrounds into
the industry and to find ways to attract more candidates from under-represented groups to
apply for roles at Jupiter. Longer term, we want to embed diversity and inclusion as an
irrevocable part of the agenda and a business priority. The positive response to our launch at all
levels of the business has been very encouraging.”
PERSPECTIVES
of black leaders in the asset management
industry.” For Andrew, the initiative reinforced his
long-held view that having a truly diverse
workforce leads to much greater and richer
outcomes. Everyone, whatever path they have
taken to be where they are today, brings their
own unique contribution to the debates being
held in the company, and Jupiter is stronger for it.
More broadly, Jupiter’s Executive Committee has
been a strong supporter of the firm’s employee
networks, believing they can provide invaluable
insight on helping create a workplace where
people from under-represented backgrounds can
feel comfortable and thrive.
The Jupiter Pride Network is a case in point.
The network offers LGBTQ+ employees and
their allies advice, support and camaraderie in
a safe, judgement-free space, but also works to
effect change in the business and raise awareness
of LGBTQ+ specific issues. In 2021, a video filmed
by the network to mark Pride Month successfully
drew attention to the ongoing discrimination
LGBTQ+ people face around the world. The
video was one of Jupiter’s most widely viewed
and shared posts on social media.
The end of the year also saw the successful
launch of Gravity, a network aimed at raising
awareness of cultural and ethnicity challenges
and closing the gaps that have traditionally been
barriers to advancement. Our Faith Network,
meanwhile, benefited this year from the opening
of a multi-faith prayer room. When clients
benefit from diversity of thinking, it is incumbent
on us to ensure our corporate culture continues
to value and promote diverse perspectives.
At Jupiter, we choose to embed diversity by
asking everyone to play their part. In 2021, we set
all our Executive Directors and Executive
Committee members clear D&I goals, and our
efforts in this space will continue as the company
seeks to draw inspiration and strength from the
vibrant, diverse society in which it operates. For
more on our approach to diversity and inclusion,
please see page 39.
“In a challenging year
for young people to
make a start in their
careers, we have almost
tripled the number of
entry-level opportunities
available for school
leavers and graduates.”
Tracey Kinsella
HR Director
“ At Jupiter we choose
to embed diversity
by asking everyone
to play their part.”
THE ABILITY TO BE AGILE,
ENTREPRENEURIAL AND FLEXIBLE
IS THE VALUE OF ACTIVE MINDS
35
Jupiter Fund Management plc | Annual Report and Accounts 2021
ACTIVE RESPONSIBILITY
OUR PEOPLE AND CULTURE
Diversity of thought is encouraged and valued, emerging
talent is recognised and nurtured, and open debate and
collaboration are core expectations.
People and culture
Our business is built upon the value of our people
and the way in which we embrace our cultural
pillars in all that we do. Putting clients first is
central to our culture and at the heart of our
business model.
As we continue to navigate these turbulent times,
working closely together and appreciating the
contribution that each and every individual makes
has become more pertinent than ever before.
We follow a set of principles that guide and
underpin the way we treat each other and how
we do business. These help us to understand the
behaviours that are important to delivering for
our clients. At Jupiter we express these principles
around four ‘cultural pillars’:
• We put clients first
• We value our people
• We succeed together
• We challenge ourselves
We seek out new and improved ways to embed
these principles in everything we do, from the
way we communicate, to how our decisions are
made. Given the headwind of Covid-19 and the
inevitable potential cultural challenges that
acquisitions can bring, we made people and
culture a key priority in 2021.
Back together, our opportunity
to reunite and reconnect
2021 was a challenging year as the world began to
reassert itself following the restrictions that
prevailed for much of the previous year. Given
the changeable environment, we wanted to
provide our employees with early certainty about
our future ways of working and, following a
detailed analysis of its implications, we were in a
strong position in early summer to confirm our
future hybrid working model, which combines
office-based days with the valued flexibility of
working remotely.
During 2021, we re-designed our London office
space and set to work to create a truly
welcoming, flexible working environment to
foster greater collaboration. We also continued
to develop our technology to fully enable the
new working environment. Through a regular
programme of internal communications that
included a weekly newsletter ‘Zigzagging’, based
on the name of our headquarters in London, in
addition to our monthly digital staff magazine, we
shared information about our plans for returning
to the office and provided updates on the
exciting developments to our office space. We
were particularly cognisant that we had a number
of new joiners, including those through the
Merian acquisition, coming to the office for the
first time, and were focused on creating a
seamless transition to their new workplace.
With the safety and wellbeing of our employees
an ongoing focus, we were officially able to
launch our hybrid working model once
restrictions were eased and we were able to
return to the London office. Through a
comprehensive programme of events with
employee health and wellness at the centre, we
celebrated being back together and created time
to allow people to reconnect with colleagues
both old and new. Our employees abroad
participated in their own programmes which
reflected each different country’s own level of
restrictions.
OUR CULTURAL PILLARS
WE PUT CLIENTS FIRST
WE VALUE OUR PEOPLE
WE SUCCEED TOGETHER
WE CHALLENGE OURSELVES
Link to core objectives:
4
> For more information see page 17
Link to principal risks:
1
3
> For more information see page 60
36
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
Health and wellbeing
As employees transitioned back to the office, we
provided a programme of hybrid working
webinars aimed at offering practical tips and
strategies to maximise productivity, improve
collaboration and maintain a healthy work and
life balance. Running alongside the webinars, we
put together a series of facilitated ‘reconnection
days’ to help people re-engage with their teams
and the organisation, and Executive Committee
engagement meetings for our people to discuss
key issues with senior management.
We supported employees to ensure that their
home office remained as comfortable and
effective as possible and once again offered a
contribution of up to £1,000 per employee
towards the purchase of office equipment and
furniture to enhance their working environment.
Whilst we very much encouraged our employees
to take some time off over the summer to rest
and recharge, we acknowledged that 2021 was
not a normal year to take holiday, with a
significant amount of time spent under
government restrictions. We therefore adjusted
our holiday rules so that employees had the
opportunity to double the number of days that
they were permitted to carry over.
Rewarding our employees
Our reward framework is designed to attract,
motivate and retain talent. It creates a tangible
link between performance and compensation,
while ensuring that our people’s interests are
aligned with those of our clients. Through a mix
of fixed and variable components, we provide
competitive total compensation that rewards
success and the promotion of our culture and
values.
Enabling Company-wide share ownership is an
important objective in promoting our cultural
pillar of ‘We succeed together’. Compensation
awards, particularly deferred bonus payments and
regular Long-Term Incentive Plans, are designed
to align the interests of our employees with
those of the Company’s stakeholders, including
its shareholders.
We are pleased to have been able to once again
grant a share award of £2,000 to each of our
permanent employees. This is the third year in a
row that we have done so, promoting the
philosophy of allowing staff to share in Jupiter’s
long-term success. We have also continued our
‘CEO Award’ programme which recognises a
number of employees who have demonstrated
an exceptional contribution to the Company’s
success, in addition to excellent performance in
their role. This award is granted in Jupiter shares.
In addition, employees are invited each year to
participate in schemes, which provide
opportunities to purchase Jupiter shares in a tax
efficient manner, in some schemes matched by
Jupiter.
Keep learning
The development of our people is key to Jupiter’s
success. Our cultural pillars inform the core
curriculum we offer to all employees and drive
our intention to help people fulfil their potential,
whether that’s through individual development,
team activities, management courses or
professional qualifications.
During 2021, we offered a virtual training
programme focusing on a diverse range of topics.
These included courses on current industry
trends such as crypto-currency, and workshops
on communication and management skills.
Employees also had the opportunity to expand
their understanding of programming through a
course developed by Jupiter’s experienced data
science team.
ESG continues to be an important focus for
Jupiter as well as for the industry. In support of
our business objectives in this area, we offered all
employees the chance to study for the CFA ESG
Certificate, fully sponsored by the Company.
Since the end of July 2021, more than 5% of our
people have enrolled on the course.
The Jupiter leadership conference took place in
October which brought together senior leaders in
the Company to discuss the strategy, explore
new ideas and promote collaboration amongst
the group. The presentations focused on our
clients, our culture and diversity and inclusion, as
well as exploring arguably the most important
issue we are facing as a planet – that of climate
change. We will build on the success of this event
and the development of Jupiter leaders through a
senior leadership programme which began in
early 2022.
17
people joined
Jupiter through
Investment20/20
£2,000
free share award
to all permanent
employees
37
Jupiter Fund Management plc | Annual Report and Accounts 2021
PEOPLE AND CULTURE
continued
INVESTMENT20/20
Investment20/20 is an industry-wide initiative
that aims to reduce barriers to entry into asset
management and to recruit a more diverse pool
of talent. Its mission is to achieve systemic
change across the industry, so that all firms hire
for potential, rather than academic background
or experience alone.
Investment20/20 was founded in 2013, with
Nichola Pease (our Chairman) and Andrew
Formica (our CEO) co-founding the initiative.
Jupiter was one of a small number of firms who
took part in its launch and we welcomed our first
cohort of four trainees in its first year. Its scope
has significantly grown since and, taking
advantage of the Government’s apprenticeship
scheme, we now hire both trainees and
apprentices from a variety of backgrounds. In
2021 we nearly tripled our intake from previous
years, welcoming 17 trainees and apprentices.
Initially joining us on a temporary contract, we
have offered permanent roles to over 80% of our
Investment20/20 intakes.
Gergana Kabakova joined Jupiter as part of the
very first cohort, starting her career as a Marketing
Information Executive Trainee. Eight years later,
she remains at Jupiter, is now a Senior Performance
Reporting Analyst and is CFA Level 2 qualified.
Gergana grew up in Bulgaria, before moving to
the UK to study economics and finance at the
University of Brighton. Although Gergana always
knew she wanted to work in finance, she was
unsure in which area.
Gergana tells us that, “Jupiter’s active approach
goes beyond the investment concept and
reaches to the spirit and mind-set of its
employees. I really enjoy the fact that Jupiter
maintains its proactive environment with
employees – Jupiter is a company which
recognises people’s potential and ideas.’’
Jupiter is keen to support employees in gaining
qualifications and ensuring they are able to
maintain a healthy work-life balance. Over the
last eight years, Jupiter has sponsored Gergana in
the CFA qualification and supported her during
maternity leave and her subsequent return to the
office.
She says, “Jupiter offers a very supportive
environment for working parents and I am really
pleased to say that returning to work from my
maternity leave was a very smooth process,
throughout which I received continuous support
from my managers and colleagues.”
In 2018, when Gergana was a Senior Portfolio
Analyst, she was involved in the process of
recruiting the team’s next trainee, hiring Bartek
Kapron.
Bartek joined Jupiter as a trainee portfolio analyst
in the investment risk team straight after college,
having chosen not to go to University.
He explains, “In my last few months at college I
came across a few articles that explained why
many university graduates struggle to find jobs in
a role that they studied. I still applied to UCAS
and went through with my university application;
however, I thought that I might look into other
ways to get into the asset management industry.”
The majority of the applicants for the role had
studied to either undergraduate or master’s level.
Bartek’s application stood out as being different
and it was clear to the interview panel that he
had a keen desire to learn, as well as to work hard
and prove that a degree isn’t required to work in
asset management. At Jupiter, we look to
promote internally where we can and support
younger employees in gaining international
experience as they develop their careers. In early
2021, Bartek successfully applied for an investment
analyst role in Jupiter’s Luxembourg office.
Bartek notes that, “When I started my trainee role,
I didn’t dream that in three years’ time I’d get to
move to Luxembourg. I’ve been given a lot of
opportunities to learn and develop at Jupiter; after
taking these I was given more responsibilities
which led to my move to Luxembourg.”
38 Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
Diversity and inclusion
Achieving greater diversity amongst our people
and creating a more inclusive culture continues to
remain a key focus for Jupiter. We want our
people to represent the clients we serve and the
communities we operate in. We want a
workforce that is diverse in all aspects, whether
that is gender, ethnicity, disability, education,
social and economic background, and other
factors. At Jupiter, we consider diversity and
inclusion Company-wide, by region, by function
and by team, as well as at varying levels of
seniority.
Information is collated on a voluntary basis on
disability, ethnicity, gender and sexual orientation
for all employees. We have comprehensive data
for gender and an 80% disclosure rate for
ethnicity. Disability information is more limited,
due to the number of employees who have
chosen to disclose. In addition, we collect
information on socio-economic and educational
background through our entry level programmes.
In 2022, we will be focused on how we can better
understand how Jupiter performs against these
characteristics so that we can drive actions to
continue to improve our overall diversity and
inclusivity.
We believe that education and accountability are
key in changing mindsets and achieving long-term
change. Following the successful rollout of our
diversity and inclusion webinars in 2020, we
introduced ‘inclusion for managers’ training in
2021 which covered a broad range of topics such
as the benefits of diversity and inclusion and how
to understand and address unconscious bias.
Over 100 of our people managers have now
attended this training. To coincide with National
Inclusion Week, we also ran a unique and
interactive ‘inclusion escape room’ event to
celebrate everyday inclusion which surprised and
challenged employees into facing their
unconscious biases.
During 2021, Andrew Formica, our CEO,
spearheaded a new developmental initiative
which promotes our people incorporating D&I
objectives within their annual performance
review. Our Executive Committee continue to
have their variable pay linked to a qualitative
diversity and inclusion assessment and their
delivery against diversity targets relating to
gender, ethnicity, disability and socio-economic
background. This is an area which, with the full
support of the Executive Committee, we will
continue to focus on and evolve over time.
During this year, we continued to review and
change our process policies and benefits in order
to drive positive change. Through the
introduction of our hybrid working policy, we
have been able to offer further support to those
with caring responsibilities and those with
accessibility requirements. To support our goal in
achieving greater representation of women at all
levels at Jupiter, we removed the pro-rata of
bonuses during the first six months for those on
maternity or paternity leave.
One of our main contributors to achieving
greater diversity at Jupiter is in our continued
involvement with Investment20/20.
Investment20/20 is an industry initiative which
aims to create a more inclusive recruitment
process by removing the typical barriers of entry
to the industry. More details on Investment20/20
can be found on the page opposite.
We work with external, independent
organisations that help us broaden our talent
pipeline and raise awareness of Jupiter to groups
typically underrepresented in the industry. This
includes women, people from a broader
socio-economic background, individuals with a
disability, and those from ethnic minority
backgrounds. We have several employee
networks established to support
underrepresented groups: Ethnicity (which was
relaunched in 2021 as Gravity), Faith, Pride and
Women in Technology. Each of these has a
member of the Executive Committee as a
sponsor to ensure that their voices are
represented at the most senior level of the
organisation.
Engagement
We believe that we can only succeed together if
we listen to each other and are prepared to be
challenged. At Jupiter, we achieve this through
open debate, innovation and continuous
improvement.
Our employee representative forum,
Connections, helps to drive engagement at all
levels of the business and regularly communicates
with our people to gather views on strategy,
people, culture and facilities. The Chairman of the
forum provides updates to Executive Committee
and the Board and act as the Company’s formal
workforce advisory panel.
The annual employee survey is another important
component of our overall employee engagement.
This gives us the platform to identify and
celebrate our successes, but also to work on any
issues which are identified through the survey.
In November 2021, we launched our annual staff
survey and, as in previous years, many of our
employees took the time to respond to the
survey. With 451 individual responses, we
achieved a strong response rate of 82%. A
significant number of employees also provided
responses to our open comment questions to
share their perceptions and experiences of Jupiter
as a place to work.
At 76%, we have seen an 8% reduction in our
overall engagement score compared to our
previous survey in January 2021. Our employees
responded favourably to the training and
development, the quality of their line
management and to the updated office space.
These results strongly endorse the value that we
continue to place on our people.
However, there were some concerns expressed
by our people. Connections has already started
working with focus groups by department to dig
deeper into the results and to engage with them
on ideas for improvements in areas such as
inter-departmental communication. The Board
and the Executive Committee are fully
committed both to listening to what our people
are telling us, and to responding effectively to
issues raised.
“Achieving greater diversity amongst our people
and creating a more inclusive culture is a key focus.”
2021 2020
At 31 December 2021 Female Male Female Male
Board 3 6 2 7
Senior management 21 79 20 84
Other employees 195 288 203 302
Total 219 373 225 393
39Jupiter Fund Management plc | Annual Report and Accounts 2021
The world is undergoing an unprecedented
period of change, with social and environmental
issues defining the current era. We believe that
active asset managers are among the groups most
empowered to address these challenges. As a
high-conviction active asset manager, we have an
important role to play, both in the allocation of
capital and in active engagement with the
companies in which we invest. This is a role that is
at the core of active management.
This approach applies across all of our business,
with ESG factors built into investment processes
for all of our strategies. We have always believed
in this approach and the heightened focus on
sustainability is core to our beliefs. We believe
that companies which are managed sustainably
will create value over the long term for the
benefit of our clients and all of our stakeholders,
including society and the environment. We have
a long and successful history of investing
sustainably, launching the first green unit trust in
the UK in 1988.
We have continued this evolution, launching new
ESG-focused products over recent years,
including Global Sustainable Equities and an SFDR
Article 8-compliant version of Dynamic Bond.
We started assessing and reporting against the
Task Force on Climate-Related Financial
Disclosures (TCFD) requirements in 2017 and, as a
member of the NZAM initiative, have committed
to net zero across our investment portfolios and
corporate operations by 2050. This year, we have
evolved our approach and set interim targets to
be achieved by 2030. Our full TCFD report can be
found from page 45.
This active responsibility also means a
commitment to hold ourselves to the same high
standards which we apply to our investee
companies, for the benefits of our people, our
local communities and the wider environment.
Along with a commitment to net zero, we are this
year reporting in line with the UNGC framework.
ACTIVE RESPONSIBILITY
ESG AND STEWARDSHIP
Sustainability is a key focus for Jupiter, with the
principles of acting responsibly embedded into our culture.
Link to core objectives:
2
3
4
5
> For more information see page 17
1988
Investment
First sustainable fund
launched in UK – Jupiter
Ecology Fund
2001
Industry
EUROSIF (European SRI
Transparency Code)
2010
Investment
Signatory to the
UK Stewardship
Code
2013
Corporate
Launch of
Investment20/20
1998
Industry
UKSIF (the UK
Sustainable Investment
and Finance Association)
2014
Investment
Investor Forum
Membership
2000
Corporate
CDP. Jupiter founder
signatory to the Carbon
Disclosure Project
2012
Corporate
Membership of
the 30% Cub
2008
Investment
PRI. Jupiter has been a
signatory of the UN Principles
for Responsible Investment
(PRI) since 2008
A long history of active responsibility
This principle of active responsibility, extends
throughout the company, with focus on all of
our stakeholders. We actively engage with the
companies in which we invest. We help our
diverse and talented people to drive a culture
of collaboration, and we support and protect
our local communities and the environment
around us.
Sustainability and the principles of active
responsibility at Jupiter can be considered
through three distinct but overlapping areas:
1. The integration of ESG principles in active
investment
2. Our sustainability-focused product range
3. Our corporate commitments
2015
Industry
Launch of TCFD
Jupiter
Industry
40 Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
The principle of analysing ESG-related risks as we
construct our high-conviction portfolios has long
been a cornerstone of our investment
philosophy.
All of our fund managers are required to build
ESG risk considerations into their investment
processes, which are assessed as part of our
annual appraisal process.
Over recent years, we have seen a marked shift in
client demand. Many clients are increasingly
moving away from looking solely at the financial
returns of their investments, and are now taking a
keener interest in the wider impact these
investments have on people and the planet.
There are a wide variety of investment
approaches available in the market, ranging from
those solely focused on financial returns all the
way through to impact investing. Our philosophy,
and active engagement with our investee
companies, mean that all of Jupiter’s products
have ESG-risk considerations built into their
investment processes.
Client demand in recent years has moved
towards those products with clearer sustainable
investing objectives. Our product strategy has
mirrored this, with recent launches being of
strategies with a clear focus on sustainability. This
year, we have launched an additional
Luxembourg-domiciled SICAV vehicle for our
2019
Investment
Member of the IIGCC
Member of Climate
Action 100+
Corporate
Member of Workforce
Disclosure Initiative
2017
Corporate
Signatory to the Women
in Finance Charter
Founding member of
the Diversity Project
A4S – Accounting for
Sustainability
Empower mentoring scheme
RE100 initiative
2021
Investment
NZAM interim targets set
for portfolio emissions
Finance for Biodiversity pledge
Corporate
NZAM interim targets set for
corporate operations
UNGC – inaugural communication
on progress
Industry
SFDR introduced
2018
Investment
Signatory to the Japan
Stewardship Code
PLC annual report starts to
disclose against TCFD
recommendations
Launch of Global
Sustainable Equities
Industry
LGPS Investment
Code of Transparency
2020
Investment
Signatory to NZAM initiative
Member of Farm Animal
Investment Risk & Return
(FAIRR) initiative
Corporate
Member of Good
Work Coalition
Forest Carbon Initiative
Signatory to the UNGC
2016
Industry
Green Bond Principles
Hampton Alexander Review
1. THE INTEGRATION OF ESG PRINCIPLES
IN ACTIVE INVESTMENT
flagship Global Sustainable Equities strategy,
which has seen net inflows this year of £200m.
We have also broadened our range both with
ESG-focused versions of existing strategies, such
as Dynamic Bond ESG, and new products such as
the Global Ecology Bond fund.
More details on our sustainability-focused
product range can be found on page 49.
2030
Investment
Interim targets for NZAM
across portfolios and
corporate operations
2050
Investment
Net zero targets
for NZAM across
portfolios and
corporate
operations
41Jupiter Fund Management plc | Annual Report and Accounts 2021
We engaged with various sustainability
experts from the company as part of its
investor outreach programme, discussing a
wide array of ESG issues across governance,
environmental supply chain and human
capital.
The company discussed its participation in
the regenerative cotton initiative. The
company has provided funds to this
programme which supports long-term
sustainable cotton production in the US
with the aim of eliminating 1 million metric
tons of carbon from the atmosphere by
2026. The programme looks to educate
farmers to use regenerative practices.
The dialogue also covered the company’s
efforts to diversify its supply chain to
reduce risk of disruption and apply lessons
from the pandemic. Their sustainability
initiatives, particularly around diversity and
wellbeing, have meant they have achieved
better staff retention than their peers.
We had an initial engagement with the
Chairman at the beginning of the year to
discuss challenges around the product
pipeline and perceived weaknesses
associated with the company’s
performance culture. This was
acknowledged by the Chairman, who
outlined the reforms and leadership
changes implemented by the CEO. Having
launched a public campaign citing the
CEO’s lack of industry experience, Elliot
Advisors approached Jupiter to discuss
their activism. Our position remained
unchanged – we are supportive of the
CEO, have high regard for the Chairman
and place our trust in the Nomination
Committee to ensure that there is the
right balance of skills on the Board.
We also joined a collective engagement
discussion with the Senior Independent
Director and a wide range of shareholders.
In October, the company announced the
appointment of Dr Harry Dietz, a professor
of genetic medicine, strengthening the
Board’s industry experience.
The company was at the centre of misconduct
investigations during summer 2020 which led to
the three senior executives stepping down. We
had conducted various Board level engagements
on these matters and our latest interaction was
with the Lead Independent Director during
December 2021. The fallout from this scandal
suggested a deeper lying problem in terms of a
toxic environment rooted in a lack of gender
diversity.
This meeting provided an opportunity for a
progress report on deep lying cultural issues
rooted in a lack of gender diversity. The
company outlined its action plan to address the
key issues, including hiring more female staff,
diversity and inclusion training, the hiring of a
new Chief People Officer and appointing
Accenture to perform an external audit of its HR
practices. The company is also reviewing how
diversity is treated from a product perspective
within the video game industry.
GSK
UBISOFT
RALPH
LAUREN
active communication with our wider
stakeholders, including regulators and
government bodies.
We engaged over 700 times with almost 500
companies on ESG matters in 2021. The box
below describes a number of these key
engagements.
Where change is not forthcoming, one of our
most powerful tools is to use our voting rights
and influence, often in collaboration with other
investors, to address any issues that are an
impediment to change.
In 2021, we voted at 388 meetings in the UK and
2,029 overseas. Although our preference is always
to actively engage prior to these meetings, we
voted against management on at least one
resolution at 44 UK meetings and 772 overseas
meetings.
During the period Jupiter voted on 66 climate
resolutions, including both management and
shareholder proposals, supporting 70% of items.
We also voted on 83 proposals that were
classified as social resolutions, both management
and shareholder proposals, and supported 61% of
these items. A further breakdown and more
detailed analysis will be provided in Jupiter’s
Annual Stewardship Report to be published in
April 2022.
ESG AND STEWARDSHIP
continued
Investing for the future
Throughout this year, we have continued to
invest in growing our sustainability capabilities
across the firm, with new products and key new
hires.
We have created a new role of Head of
Sustainability, who joined us in early 2022. This
group-wide role is responsible for co-ordinating
our overall ESG strategy and ensuring best
practice across the business.
Within the investment function, we have also
invested in a number of newly-created ESG
investment directors. These product specialists
are focused on integrating ESG factors into
investment processes, communicating with our
clients and acting as a link between the
investment and stewardship teams. We have
appointed ESG investment directors within fixed
income, UK equities and multi-manager teams
and we will continue to grow this function
through 2022.
We have also increased the dedicated resource
within our stewardship team, who are focused on
supporting our fund managers through active
engagement with our investee companies. With
new hires with backgrounds in fixed income,
climate risk and advising corporates on
sustainability, the team benefits from a broad
range of experience.
Having made these investments, we move into
this year with over 20 people dedicated to
questions of sustainability, in addition to an
11-strong data science function. We will continue
to invest appropriately in this key area of growth
through 2022.
Active engagement
As high-conviction, active investors, we have a
duty to our clients to be effective and
responsible stewards of the investments we make
on their behalf. In this spirit, we seek to invest in
well-managed companies with business models
that are sustainable in the long term.
A key part of this process is actively engaging
with our investee companies across all asset
classes, to drive more sustainable business
practices, which results in better outcomes for
our clients and, ultimately, all of our stakeholders.
This active engagement directly with
management is key to our investment philosophy.
It allows us to glean a different kind of insight
into managements’ view of their businesses’
progress on ESG matters than through data
analysis alone. Our engagements also include
42 Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
Engagement with our wider stakeholders,
including regulators, governments and industry
bodies, is a key part of our process and allows us
the opportunity to contribute to shaping the
sustainability agenda. The Stewardship report,
which is available on our website at
www.jupiteram.com/stewardship, provides
comprehensive details on our engagements
throughout the year, but the below examples
demonstrate some of the topics covered.
• Investment Association (IA) Sustainable
Disclosures Implementation Forum – Peer-to-
peer collective organised by the IA to discuss
operational challenges and solutions around
SDFR implementation. The Forum has also
hosted industry, legal and data experts to help
assist participants.
• ShareAction, Healthy Markets Initiative and
Good Work Coalition – Jupiter is a member of
these separate ShareAction-led workstreams
and they have helped to inform our
engagement activity. The Healthy Markets
Initiative is an investor collective which seeks
to drive improvements in the long-term
sustainability of food companies through
collective engagement programmes and
AGM action. The Good Work Coalition is
a UK-focused investor movement that
attempts to tackle income inequality and
in-work poverty through the promotion of
the Living Wage.
• UK Listings Review (Hill Review): As part of
HM Treasury’s plan to strengthen the UK’s
position as a leading global financial centre, the
Chancellor appointed Lord Hill to lead a review
into the UK Listings regime. Jupiter’s UK SMID
team has a significant track record in investing
at IPOs and understanding the dynamics of the
UK market and were approached by an
intermediary to provide insight to the Hill
Review.
• Jupiter Sustainable Investment Academy:
The academy was a summer programme of
client engagement on ESG themes. Each week
a different member of our Sustainable
Investment strategy, Stewardship Team or Data
Science would provide a tutorial outlining an
aspect of their day-to-day work. Clients had
the opportunity to ask questions and provide
feedback on the session.
A data-driven approach
We believe that data and information flows will
continue to play a crucial role in enabling active
investors to address the challenges the world is
facing.
We have continued to invest in our data science
team through 2021, which has now grown to a
team of 11. The team continues to play a key role
in our focus on Sustainability through the
ongoing development of the ESG Hub and
engagement with third-party data vendors to
provide feedback on product and data quality,
benefiting all participants.
This internal, proprietary tool gathers, cleanses
and presents ESG data from third-party providers
together with our in-house holdings data. This
helps enhance our fund managers’ consideration
of the ESG risks of each of their investee
companies, as well their portfolios as a whole,
and drives better engagement with investee
companies. Equally, this allows our CIO office to
review the ESG risks across strategies, teams, and
the group as a whole. The proprietary nature of
the tool means the team is able to rapidly
develop new features and integrate new datasets.
Governance
We believe that an authentic and committed
approach to sustainability requires engagement
from all of our people, from the Board down. The
Board continues to regularly consider
sustainability matters, more details of which can
be found from page 68. Our Executive Directors
have ESG-focused objectives included as part of
their remuneration, more on which can be found
from page 102.
It is crucial that our investment and corporate
activities are aligned in their philosophy and aims.
In order to help achieve this, our two key
committees, the Stewardship Committee and the
Corporate and Social Responsibility (CSR)
Committee, are both chaired by Edward Bonham
Carter, our Stewardship and CSR Director.
The full memberships of both committees are
detailed above. The activities of the Stewardship
Committee and selected notable outcomes can
be found in the table overleaf. Those of the CSR
Committee can be found on page 51.
JUPITER FUND
MANAGEMENT
PLC BOARD
Governance structure
EXECUTIVE
COMMITTEE
CSR
COMMITTEE
Stewardship & CSR Director (Chair)
CEO
Non-Executive Director
HR Director
Head of Stewardship
Head of Facilities
Chair of employee
representation forum
STEWARDSHIP
COMMITTEE
Stewardship & CSR Director (Chair)
Executive Director
Chief Investment Officer
Head of Strategy
& Corporate Development
Heads of Strategy
Head of Stewardship
Fund managers
43Jupiter Fund Management plc | Annual Report and Accounts 2021
Stewardship committee
Activities Outcomes
H1 2021 With UK Small & Mid Cap (SMID) and European Growth teams,
discuss stewardship approach re: housebuilders and cladding
suppliers following findings from the Grenfell Inquiry
Engaged with CEO and Chair of Bellway Direct and collaborative
engagement with Kier Group where we voted against the remuneration
report, due to the remuneration outcome for one outgoing director
responsible for the insulation business
Discussion on implementation of EU SFDR regulation Ongoing development work for new Article 8 and 9 funds, leading to
launch and transition of funds outlined on page 49
Proposal to build a communication to investee companies that
proactively imparts stewardship expectations
Initiative adopted by the UK SMID strategy and shaped communication to
investee companies
Internal project group (encompassing technology, operations,
data science and stewardship teams) to drive solutions around
ESG regulatory reporting
Ongoing scoping exercise of client requests, fund manager feedback and
regulatory developments
Update on new engagement record-keeping database Testing undertaken and the new system launched in H2
Update on NZAM protocols and objectives including establishing
interim target by October 2021
Analysis undertaken with consultant Carbon Intelligence and interim target
publicly disclosed within the IIGCC’s progress report in November 2021
H2 2021 Update from fixed income team on launch of new SFDR Article 8
product
Dynamic Bond ESG launched in early 2022
NZAM update including on interim targets and presentations
from Carbon Intelligence
Discussed consultation response to the (Department for Business,
Energy & Industrial Strategy) entitled “Restoring trust in Audit and
Corporate Governance”
Jupiter responded to the consultation as both a listed company and an
investor in UK companies
Update from Global Sustainable Equities on FCA letter addressed
to the chairs of authorised firms outlining sustainability
expectations of financial products
Ongoing review of process and approach in light of guidance and
expectations
Update from Chrysalis Investments on overall ESG approach and
stewardship strategy
ESG investment director appointed and revised ESG integration and
engagement policy is being developed
Discussed approach to FCA discussion paper on Sustainability
Disclosure Requirements
Jupiter responded to the FCA’s discussion paper in January 2022 and there is
ongoing work to ensure we shape our approach through this development
Approved decision to join collective letter to UK Government on
mandatory reporting for healthy and sustainable food
Collective communication returned to UK Government
ESG AND STEWARDSHIP
continued
44 Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
Climate & Environment
At Jupiter, an important part of our ESG
objectives is to support the transition to a
low-carbon economy. We strongly believe that
this transition will involve concerted and
co-ordinated efforts by many stakeholders, who
have a collective responsibility to maintain
momentum and urgency.
Asset managers have a critical leadership role to
play, making progress and ultimately delivering on
commitments in relation to ESG factors (such as
the NZAM initiative, UNPRI and TCFD) and
harnessing market developments and new
practices to act in the best interests of our
clients.
We believe that it is imperative that we work
together as a company, an industry, and a society
to tackle climate change and improve wider
societal and governance standards, and we
Aligning our portfolios with net zero
By joining NZAM, we commit to increasing the
proportion of assets in our portfolios which are
aligned with the goals of the Paris Agreement
over time. We believe this is the most effective
way in which to protect our clients’ assets from a
range of climate-related risks while also
contributing as a financial institution to the
mitigation of the systemic risks of climate change.
IIGCC has led and coordinated the development
of the Net Zero Investment Framework (NZIF),
which provides a basis on which investors can
make commitments to achieving net zero
emissions and define strategies, measure
alignment, and transition portfolios. NZIF is
recognised by the NZAM initiative as a
methodology which provides participating
investors with guidance on best practice, robust
and science-based approaches and standardised
methodologies, and improved data, through
which to deliver on these commitments. The
investment strategies included in the scope of
our initial net zero target will apply NZIF.
NZIF sets out a number of key actions and
methodologies that can be used to implement
net zero targets in a portfolio context. Objectives
and targets set the direction and ambition of a
net zero investment strategy and act as a means
to monitor the effectiveness of this strategy. As
well as our group-wide target framework, we will
disclose objectives and targets for individual
investment strategies in Jupiter’s annual
stewardship report.
The key driver for achieving net zero targets and
securing emissions reductions in the real
economy is the increasing alignment of assets to
net zero pathways within our portfolios. NZIF
prioritises engagement and stewardship,
particularly for existing portfolio companies, as
the primary mechanism to drive alignment.
Portfolio construction can also be a relevant tool
to weight portfolios towards assets aligned with
or transitioning towards net zero as an incentive
for these companies to align. Selective
divestment is recommended in specific
circumstances as part of the toolbox for aligning
a portfolio.
Our assessment of investee company transition
plans is aligned with IIGCC’s NZIF framework and
includes the following:
1. Ambition: A long-term 2050 goal consistent
with achieving global net zero
2. Targets: Short- and medium-term emissions
reduction targets (scope 1, 2 and material
scope 3)
3. Emissions performance: Current emissions
intensity performance relative to targets
4. Disclosure: Disclosure of scope 1, 2 and
material scope 3 emissions
5. Decarbonisation strategy: A quantified plan
setting out the measures that will be deployed
to deliver greenhouse gas (GHG) targets
6. Capital allocation alignment: A clear
demonstration that the capital expenditures of
the company are consistent with achieving net
zero emissions by 2050
“By joining NZAM, we commit to increasing the
proportion of assets in our portfolios which are
aligned with the goals of the Paris Agreement
over time.”
recognise the need to be an active participant by
adding our voice to this era-defining challenge.
We are focused on all parts of the business to
strengthen our ESG strategy and build on our
activities in these areas.
We are a signatory of the NZAM initiative, joining
fellow asset management companies in
making new, enhanced commitments to support
the goal of net zero greenhouse gas emissions by
2050 or sooner, in line with global efforts to limit
warming to 1.5°C. This important step solidifies
our commitment to play a leading role in
supporting the transition to a more sustainable
world economy.
Last year, we reported the significant step we had
taken of committing to achieve net zero
emissions by 2050 across our full range of
investments and operations. In 2021, we have
provided more detail around the assets which are
initially included as in scope, as well as setting
interim targets. We have announced that 42% of
our AUM at end 2021 is initially within scope, and
to increase this to 100% by 2050. Further, we have
committed to reducing the portfolio emissions
intensity of the assets currently in scope by 50%
by 2030.
Jupiter began assessing and reporting in line with
the recommendations of TCFD in 2017. We report
how climate change is embedded across the four
TCFD pillars of governance, strategy, risk
management and metrics and targets below.
Related disclosures and more detail are available
in Jupiter’s annual stewardship report, our CSR
report and via our participation in the CDP
Climate Change programme. With the exception
of recommendation “Strategy c”, as explained in
more detail on page 46, this disclosure addresses
all the recommendations of the TCFD framework.
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURE (TCFD)
45Jupiter Fund Management plc | Annual Report and Accounts 2021
Climate-related risks
Risk Description Timeframe Impact
Market risk Emerging regulation could negatively impact the financial performance of
carbon-intensive companies in our portfolios.
Long term Reduced revenue
Policy and legal risk New climate regulations could impact client demand for our products. Long term Reduced revenue
Physical risk Our portfolio companies could be impacted by physical climate risks. Long term Reduced revenue
Policy and legal risk Climate and ESG reporting requirements could expose us to regulatory penalties. Short term Increased costs
Climate-related opportunities
Opportunities Description Timeframe Impact
Product and services Increased demand for equity funds which employ sustainable investment strategies. Long term Increased revenue
Product and services Increased demand for fixed income funds which employ sustainable investment
strategies.
Long term Increased revenue
Product and services Emerging policies could positively impact investee companies which deliver
renewable energy technologies.
Short term Increased portfolio value
Product and services Changing consumer preferences could create opportunities for investee companies
which manufacture food with lower environmental and climate impact.
Short term Increased portfolio value
Governance
The Board has ultimate responsibility for the
Group’s risk strategy and for determining an
appropriate risk appetite, as well as the tolerance
levels within which the Group must operate. The
CEO, the CIO and other senior management that
make up the Executive Committee are
responsible for managing the Group’s day-to-day
business and for ensuring the implementation of
strategy and, as such, have responsibility for
climate change-related issues. Within the Board,
overall responsibility for environmental and
corporate responsibility, including the
development and implementation of the
company climate change strategy, resides with
our CEO. The Board meets regularly throughout
the year and discusses climate-related issues and
how they impact Jupiter. In 2021, this included
sessions at which the Board reviewed and
approved Jupiter’s decision to join the NZAM
initiative. The Board also received training on
climate and net zero-related matters from an
external consultancy in 2021.
In October 2020, we announced that our Vice
Chairman, Edward Bonham Carter would take on
the role of Director of Stewardship and CSR.
Edward reports to the CEO and supports the
work of the CIO office and the Stewardship
team. He also assumed the Chairmanship of both
Jupiter’s Stewardship Committee and the CSR
Committee. In 2022, we appointed a Head of
Sustainability to oversee further progress in this
area of our strategy.
Identification of, and response to, systemic risks
require co-ordination at organisational level and
this reflects the complex nature of these issues
and the long time horizons over which they
manifest themselves. Under joint leadership, both
the Stewardship Committee and the CSR
Committee play a governance role in responding
to these risks. The Stewardship Committee
considers climate risks and opportunities within
our investment strategies and reviews
engagement across the different asset classes in
which we invest. The CSR Committee considers
the sustainability of Jupiter as a business and
coordinates with the Stewardship Committee to
ensure a consistent approach. The Chairman of
the Audit and Risk Committee regularly attends
both the Stewardship and CSR Committees. More
details on the memberships and activities of both
committees are on pages 43, 44 and 51.
Strategy
We have committed to achieve net zero
emissions by 2050 across our full range of
investments and operations. Within our annual
CDP Climate Change response, we identified four
risks and four opportunities related to climate
change, which could impact our corporate
strategy. These are summarised in the table
below. The identification of these factors reflects
internal discussions by the above Committees
over several years. As part of our internal planning
horizons in terms of TCFD, we consider short
term to be up to three years, medium term
to be three to five years and long term to be
more than five years.
We have assessed the resilience of our strategy
under a range of scenarios. As a high-conviction
active manager, the majority of our carbon
footprint as a business relates to the emissions of
our portfolio companies. Jupiter is not a
significant producer of GHG emissions via our
operations, but we have set out initiatives and
targets to reduce these emissions, in line with our
corporate responsibilities. We believe the
principal risks and opportunities for our business
relate to the investment strategies we employ on
behalf of our clients. For example, in a scenario in
which global governments undertake rapid action
to mitigate climate change, the financial
performance and future earnings capacity of
carbon-intensive companies could be negatively
affected, leading to declines in value of their
securities. As stewards of our clients’ capital we
have a role to play in the transition to a
low-carbon economy.
We believe we can mitigate these risks and
capture opportunities most effectively through
our security selection and portfolio construction,
and by active engagement with the companies in
which we invest, both directly and through
partnerships with other institutions. These
factors, along with engagement with our clients
and stakeholders, have also informed our decision
to establish a net zero target for our full range of
investments and operations. We believe that
targeting net zero, which we have expressed by
joining NZAM, is the most effective way in which
we can build resilience into our strategy across a
range of climate scenarios.
To date, we have not described the resilience of
our strategy, taking into consideration different
climate-related scenarios, including a 2°C or lower
scenario, in line with ‘Strategy c’. We continue to
develop our approach to climate scenario analysis
as described in more detail in the risk
management section of our disclosures on page
47. However, data availability remains limited in
certain geographies and asset classes beyond
fundamental, long-only, developed market equity
strategies and this means we have not been able
to conduct scenario analysis across the entirety
of our assets under management, although we
have done so for the majority of the portfolios
we manage. We continue to develop our
approach over time with the goal of stating the
resilience of our strategy across a range of
scenarios in future.
Engagement and partnerships and
collective engagement
We actively engage with investee companies to
gain insights about their exposure to climate risks,
to encourage them to align their businesses with
net zero and successfully navigate the transition
to a low-carbon economy. Core considerations in
this dialogue include a company’s potential
ESG AND STEWARDSHIP
continued
46 Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
exposure to stranded assets, transition risks and
physical risks of climate change, and whether
management has a credible strategy to adapt to
the energy transition.
Jupiter is a member of Climate Action 100+, an
investor initiative which seeks to target collective
action around a selection of the world’s highest
emitting companies and coordinate shareholder
engagement with this subset.
Joining Climate Action 100+ allows us to play a
lead role in collective engagement with investee
companies on climate matters. We are also
members of the IIGCC. A core consideration for
becoming an IIGCC member was elevating our
engagement on climate issues by acting
collectively with other institutions.
Risk management
Potential material climate risks in our portfolios
are identified by a variety of sources including
the stewardship team, third-party ESG data, and
the Stewardship and CSR Committees. Climate is
included as a formal aspect of stewardship within
the annual review process conducted by the CIO
office. To provide integration within the overall
risk management framework, ESG data, including
climate risks where relevant, are monitored using
third-party providers in the quarterly challenge
meetings conducted by the investment risk
teams. These processes enable the identification
and potential escalation of investment-related
climate risks or opportunities which may be
deemed to impact the resilience of our overall
strategy. We will continue to develop the
integration of climate within our risk management
processes in 2022.
We have developed our understanding of, and
capabilities for, climate scenario analysis to
consider potential risks and opportunities for our
portfolios beyond our investment time horizon.
We have subscribed to MSCI’s climate model,
Carbon Delta, which analyses climate change risks
and opportunities, including both transition risks
and physical climate risks which could impact the
value of our portfolios over time. Scenario
analysis can give an indication of whether
investee companies are able to withstand rapid
energy transition and the potential impact of
other climate risks. We use scenario analysis to
assess our portfolios and highlight possible
exposure to climate risks, encouraging us to
consider these issues.
We have integrated data from the model into our
ESG Hub to enable our fund managers to identify
and manage potential climate risks within their
portfolios, including an assessment of the sector
allocations which are most exposed to both
transition risks and physical risks from climate
change. We have also conducted scenario
analysis on the portfolios included within the
scope of our initial net zero target framework.
The model indicates that these portfolios contain
companies which are exposed to material climate
risks which could negatively affect their
long-term value. The results support the decision
to increase the alignment of these portfolios with
net zero. However, the model makes a number of
simplifying assumptions and its results relate to
outcomes as far out as 2050. As such, its results
should be used with a degree of caution in both
the value and time horizon of potential risks and
opportunities identified. We expect our practice
in this area will continue to evolve as available
methodologies develop.
Metrics and targets
We have set an interim target for the proportion
of assets to be managed in line with the
attainment of net zero emissions by 2050 or
sooner. In line with the requirements of NZAM,
we will review our interim target at least every
five years, with a view to ratcheting up the
proportion of AUM covered until 100% of assets
are included.
We have included our fundamental, long-only,
developed market equities strategies within our
initial target scope. For this proportion of our
AUM, we have set an interim target for the
emissions intensity to be reduced by 50% by
2030, against a December 2020 baseline. It should
be noted that, due to more limited corporate
activities as a result of Covid-19, 2020 is likely to
represent a relatively low baseline for emissions.
These investment strategies, which represent
approximately 42% of Group AUM, as at the
baseline year, make up the core of our franchise
and this is also where the greatest GHG emission
disclosures lie. We will also be including funds
which are looking to be designated as Article 8 or
9 under SFDR classifications. The target scope will
be reviewed and expanded over time as more
GHG emission data becomes available and as net
zero methodologies for other geographies and
asset classes, such as fixed income, emerging
markets and our fund of funds range, develop. In
the meantime, we will continue to engage with
our investee companies in all jurisdictions to
encourage them to align their business models,
set forward-looking targets and disclose their
GHG emissions in readiness for a formal target
framework.
We have assessed our portfolios with input from
Carbon Intelligence and determined a 2030
portfolio emissions reduction target of 50%
which we believe constitutes a fair share of global
reductions needed to attain net zero by 2050.
Jupiter will look to reference the One Earth
Climate Model, a rigorous climate and energy
blueprint for keeping global warming to 1.5°C,
used to establish sector-specific decarbonisation
pathways that can be applied at the investment
strategy level. We will report on our progress
against these targets in our annual report and
stewardship report.
We have used MSCI’s Carbon Delta data to
formulate our net zero target framework and to
disclose the aggregate emissions profile of
approximately 60% of our assets under
management in our response to CDP’s annual
climate questionnaire.
Operational emissions
As well as working towards reducing the intensity
of carbon emissions in our portfolio companies,
we also actively seek to reduce our corporate
impact.
We have an ongoing target to reduce overall
Scope 1 and 2 emissions year-on-year by more
than 1%, in addition to our commitment to
achieving net zero emissions by 2050 across our
full range of investments and operations. This
year, we have set a target of reaching net zero
across Scope 1 and 2 emissions by 2030, with a
1.5°C reduction pathway in place for Scope 3.
For the last ten years we have worked with our
sustainability partner, Carbon Intelligence, to
measure and verify progress in improving our
operational footprint.
2021
(tCO
2
e)
2020
(tCO
2
e) % change
Direct emissions
(Scope 1)
1
120.9 87.8 +38%
Indirect emissions
(Scope 2): location-
based
264.7 346.4 -24%
Indirect emissions
(Scope 2): market-
based
2
0.0 0.0 –
Total Scope 1 and 2 385.6 434.2 -11%
Other relevant
indirect emissions
(Scope 3)
3
156.2 235.8 -34%
1. Direct emissions (Scope 1) comprised of building gas
combustion, fugitive emissions from refrigeration and air
conditioning equipment and owned vehicles.
2. Direct emissions (Scope 2) is building electricity
consumption.
3. Direct emissions (Scope 3) comprised of business travel,
waste disposal and water consumption.
Overall, our total Scope 1 and 2 emissions
declined by 11% compared to 2020. This is due to
a number of factors, including a lower headcount
in our headquarters in London and more efficient
power usage throughout the building. The
increase in direct Scope 1 emissions compared to
2020 is due to our employees returning to the
office after spending much of the prior year
working remotely.
47Jupiter Fund Management plc | Annual Report and Accounts 2021
Our measured Scope 3 emissions reduced by 34%
in 2021. This was partly due to a reduction in air
travel due to the ongoing impact of Covid-19.
Water usage in our London headquarters was also
reduced by over 90% following the
reintroduction of the greywater system.
Our emissions have been verified to a limited
level of assurance by Carbon Intelligence, an
external third party, according to the ISO 14064-3
standard. Our chosen GHG methodology (Defra’s
Environmental Reporting Guidelines) takes the
operational control approach. We have applied a
materiality threshold of 5% for the purposes of
reporting GHG data, in line with market practice
for similar firms. As a result, locations with six or
more staff are defined as material and included in
the disclosure.
We remain committed to the continual reduction
of our corporate emissions, including our move in
2015 to a new ‘BREEAM Excellent’-rated building,
investment in a sustainable fit-out (SKA Gold
rated) and our commitment to the RE100
initiative, committing us to sourcing 100% of the
energy from renewable sources in our offices
with over six employees.
We have also partnered with Forest Carbon, a
not-for-profit scheme providing woodland
carbon capture projects in the UK, to plant more
than 10,000 trees over seven hectares in the UK.
By investing in woodland creation in the UK, we
are not only removing carbon emissions but also
facilitating flood alleviation, habitat creation,
employment, public access and cleaner air,
benefiting wider society in line with our
corporate purpose.
Jupiter’s environmental policy statement
(www.jupiteram.com/environmental-policy)
guides our approach to managing our carbon
footprint, use of natural resources such as water
and energy, and waste.
2030 portfolio reference target
Proportion of AUM to be managed in line with
net zero initially
41.6% (as at baseline year)
Strategies included Fundamental, long-only, developed market equities strategies
Target year 2030
Baseline date 31 December 2020
Quantified target to be achieved by target
year
Emissions intensity of AUM within target reduced by 50% by 2030
Baseline year performance 47.7 tCO2e/$m invested (Scope 1 & 2)
Financed emission coverage Scope 1 and 2 portfolio emissions. Scope 3 will be incorporated in time as data availability improves, in
line with the guidance provided by the IIGCC’s Net Zero Investment Framework
Underlying science-based net zero scenario
from which target is derived
Jupiter’s portfolio reference target adopts the Intergovernmental Panel on Climate Change (IPCC)
report’s (2018) modelled global pathways for reaching net zero by 2050. Jupiter will look to reference
the One Earth Climate Model (2020) for determining sectors pathways at the investment strategy level
Forward looking alignment methodology Strategies included in the initial target scope will apply the IIGCC’s Net Zero Investment Framework
TCFD recommendations: progress and priorities
FY2021 progress FY2022 priorities
Governance ESG governance structures / responsibilities in place Group Head of Sustainability appointed and
team expanded
Strategy Board and Executive Committee approve strategy to achieve net zero emissions
across our operations and investments by 2050
Third party-consultant appointed to advise on net zero implementation to
investments and deliver net zero curriculum to employees
Stewardship team & data science increase headcount
Appointment of ESG investment directors
Formulate and disclose net zero target framework
for participating investment strategies
Increase proportion of AUM participating in net
zero target
Set Group-wide target for investment in climate
solutions
Use stewardship to increase proportion of
portfolio companies aligned with net zero
Conduct scenario analysis and assess resilience of
our strategy under a range of scenarios
Risk Management Carbon data integrated within ESG Hub
Scenario analysis conducted on selected portfolios
Integrate net zero target framework within risk
management processes
Metrics & Targets Initial proportion of AUM participating in net zero target disclosed
Interim target of 50% reduction in portfolio carbon intensity of targeted AUM by
2030
Participating investment strategies to apply IIGCC’s Net Zero Investment
Framework (publicly available methodology)
Carbon footprint of 60% of Group AUM disclosed in CDP climate questionnaire
2030 operational emissions target disclosed
Operational Scope 3 emissions disclosure enhanced
See strategy section above
ESG AND STEWARDSHIP
continued
48 Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
A range of international products focused on Sustainability and ESG
Article 6 Article 8 Article 9
All other
Jupiter
international
funds
Dynamic
Bond ESG
Global Sustainable
Equities
Global Ecology
Growth
Global Ecology
Bond
GEM Focus Emerging Market
Corporate Bond Fund
Global Ecology
Diversified
European Growth Emerging Market Short
Duration Bond Fund
Europe ex-UK Equity Pan European Smaller
Companies
Europe ex-UK Smaller
Companies
Although all of our product range has ESG risks
considered as part of their investment processes,
we also offer a range of products which are
specifically focused on sustainable investing.
Across our sustainable investing and
environmental solutions teams, these products
are focused on investing in companies that are
leading the transition to a more sustainable
world, while still seeking the best risk-adjusted
returns for our clients.
The first product in our environmental solutions
range, the Ecology Fund, was launched to the
market more than 30 years ago. This range seeks
to invest in companies which are focused on
providing solutions to the environmental
challenges we are facing, whether that is clean
energy, green mobility or more sustainable
agriculture and oceans.
We have broadened this product range with the
launch of the Global Ecology Bond fund in early
2022.
Our sustainable investments team invests in
high-quality companies that are at the forefront
of leading the transition to a more sustainable
world. The team look to companies that address
key societal needs such as gender and social
inequality, decarbonisation and improving access
to healthcare.
In 2021, we launched a Luxembourg-domiciled
SICAV vehicle for Global Sustainable Equities and
the strategy saw inflows of over £200m in the
year.
A product range well placed for changing
regulation
As client demand has shifted towards products
more focused on sustainability and ESG, this has
been reflected in a changing regulatory focus.
Regulators and industry bodies have sought to
standardise approaches in an area with often
inconsistent taxonomy.
The most prominent example of this has been
the launch of SFDR, which applies to funds
domiciled within the EU or those marketed to
EU-based clients. This regulation defines and
labels funds which have ESG factors integrated
(Article 6) and those which either promote
environmental or social characteristics or have
sustainable investment as their objective (Articles
8 and 9). Other regulators, including the FCA in
our home market, are working towards
comparable product definitions, and we are well
placed to position our product range when these
definitions are confirmed.
Amid a significant increase in the intensity of
debate around sustainable investments and
evolving client expectations, we believe it is our
responsibility to clearly articulate and
differentiate our approach.
Having engaged with our clients, our over-arching
approach is one of authenticity. We have not
amended investment processes or objectives for
existing strategies in which our clients are already
invested. However, we have in some cases looked
to launch Article 8- or 9-compliant versions of
existing strategies, such as with the Article 8
Dynamic Bond ESG.
All of Jupiter’s EU-domiciled funds are defined at
least as Article 6. Full details are in the table
below, but Article 8 funds include a range of
products investing in European and emerging
market equities, emerging market debt, as well as
Global Sustainable Equities and Dynamic Bond
ESG. Article 9 products include the Global
Ecology Growth and Diversified funds, as well as
the newly launched Global Ecology Bond fund.
2. OUR SUSTAINABILITY-FOCUSED
PRODUCT RANGE
49Jupiter Fund Management plc | Annual Report and Accounts 2021
The principle of active responsibility means that
we must hold ourselves to the same high
standards as we expect of our investee
companies. This means acting responsibly for our
people, for our communities and for the
environment.
This year, we are reporting in line with the UNGC
framework, detailing how their ten principles are
embedded throughout our activities and
operations. Our inaugural communication on
progress can be found from page 52.
Our business is built on the value of our people.
As we return to the office after almost two years
of intermittent remote working, the importance
of a strong culture led by inclusivity and
collaboration cannot be overstated. Full details
on how we are supporting our people,
developing our culture and promoting diversity
and inclusion can be found from page 36.
Our CSR committee is dedicated to driving active
responsibility across the Group. Full details of its
membership can be found on page 43, with its
key activities and outcomes in the table opposite.
Protecting our environment
Jupiter’s operations do not produce significant
levels of GHG emissions. However, we are
committed to operating on a net zero basis by
2050, including within our operations. Details on
our current emissions and our targets can be
found in the TCFD section from page 45.
In addition to this, we have partnered with Forest
Carbon, a not-for-profit scheme providing
woodland carbon capture projects in the UK. By
investing in woodland creation in the UK, we are
not only removing carbon emissions but also
facilitating flood alleviation, habitat creation,
employment, public access and cleaner air,
benefiting wider society.
Supporting our communities
We strongly believe that we have responsibility
to positively contribute to the local communities
in which we operate, both through direct
activities and through empowering our people to
provide support.
In 2019, we introduced an employee volunteering
scheme, allowing our people leave to support
local charitable efforts, the allowance for which
was doubled the following year. Although the
pandemic made this more challenging, the
scheme will be actively promoted through 2022
to help our people find and support causes.
Jupiter has a well-established charity committee,
sponsored by a member of the Executive
Committee.
Over the course of 2021, Jupiter gave over
£200,000 to charity, the majority of which has
been donated through Jupiter’s Give as You Earn
scheme, operated by the Charities Aid
Foundation. This scheme provides Jupiter
employees with the opportunity to support the
charities of their choice either by donating a
nominated amount each month through payroll
or through one-off donations for certain events
or activities. Jupiter then double matches the
employee contribution up to a maximum amount.
The Company decided last year to increase the
amount by 50% to £1,500 per employee per year.
Each year, we also work closely with a charity
partner, which is nominated and chosen by our
employees. The criteria for selection asked that
the charity should be small enough for Jupiter to
have a meaningful impact and provide good
opportunities to engage in volunteering and fund
raising. This year, we have supported the
Momentum Children’s Charity, which supports
seriously ill children and their families.
We are proud of the imaginative activities
organised and the enthusiastic support they
received from staff in terms of participation and
giving. Walking challenges ‘Move for Momentum’
and ‘Miles for Momentum’ early in the year
supported staff health and mental wellbeing
during lockdown, while also providing a chance
for lots of employee engagement. Later in the
year, a staff quiz provided an excellent
opportunity as part of our return to office
reconnection plans. Jupiter has worked closely
with the charity to maximise their profile within
the business through another challenging year.
Jupiter has also worked closely with two charities
local to our headquarters in London, which are
making a valuable contribution to our local
community. We have donated plants, materials
and planters to the ‘KSP Community Garden’, a
voluntary project led by residents of the
Westminster Cathedral Area. We have also
donated gifts provided by our employees as part
of the Jupiter Giving Tree initiative to ‘The
Passage’, an organisation that has been caring for
homeless people in London for over 40 years.
Our work has continued with St Andrew’s Youth
Club, a local community-based youth club which
aims to enrich young lives and provide an
informal education to help youths contribute to
society.
Acting with integrity
The principle of acting with integrity is embedded
within our values and applies to all aspects of
how we conduct ourselves.
Jupiter is a constituent part of the FTSE4Good
Index, a group of companies adjudged to have
scored highly in terms of transparency and quality
of ESG policies, across environmental
sustainability, relationships with stakeholders,
attitudes to human rights, supply chain labour
standards and the countering of bribery.
We are a member of the Good Work Coalition.
This is an initiative run by ShareAction, focusing
on workforce issues such as the Living Wage,
diversity and inclusion and insecure working
practices.
We are also an accredited London Living Wage
employer. Throughout the Covid pandemic, we
did not furlough any of our staff and we worked
with our contracting companies to ensure that
any furloughed staff received full pay and
benefits.
Recognition for our commitment to
sustainability
Our commitment and expertise across
sustainability has been recognised externally this
year.
Jupiter was accepted as a signatory to the
Stewardship Code. The FRC stated that the
strongest areas of our submission were our
overall quality of reporting on engagement,
approach to systemic risk and our disclosures
covering the promotion of a well-functioning
market.
In November, the FRC published a report into
Effective Stewardship Reporting, which identified
best practice in both activities and disclosure. We
were pleased that Jupiter was cited twice in this
report, concerning both a collective engagement
case study on BP plc and the manner in which we
outlined integration of stewardship across our
asset classes.
Our commitment in this area also continues to be
recognised by the PRI. Jupiter has been awarded
an A+ PRI rating for our overall strategy and
governance, and either A+ or A for all but one of
our rated investment strategies.
We also saw an improvement in our third-party
ESG rating agency scores this year. We were
rated as “Advanced” by Morningstar in our ESG
commitment level, one of only five asset
managers to achieve that rating. We also earned a
ratings upgrade from Sustainalytics, to put us
among the top four asset managers which have
achieved the most to reduce exposure to
material ESG risk.
3. OUR CORPORATE COMMITMENTS
ESG AND STEWARDSHIP
continued
50 Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
Memberships and signatories
CSR committee
Activities Outcomes
H1 2021 Update on UNGC signatory process Creation of internal working group comprised of procurement, stewardship,
finance, HR and facilities colleagues to align responsible business practice and
share knowledge.
Update on stewardship engagements concerning Boohoo
(supply chain) and Kingspan and Bellway (Grenfell /
cladding related)
On Boohoo, engaged with the remuneration committee to reach agreement on
changes to performance conditions for their long-term incentive plan.
Engaged with CEO and Chair of Bellway to discuss cladding issues with respect
to company and industry response.
Direct and collaborative engagement with Kier Group, voted against
remuneration report due to remuneration outcome concerning outgoing
director responsible for the insulation business.
Update on operational emissions and approach to business
travel as we consider strategy and behavioural changes
from the pandemic
Jupiter has embraced the changes to both working and travel practices that have
arisen out of the pandemic. Staff are encouraged to use technology instead of
travel where appropriate.
We have invested in establishing an in-depth appraisal of our Scope 3 emissions
(cat 1-14) and are developing a 1.5°C aligned pathway. We are also aligning the
reduction of our operational Scope 3 emissions with our commitment for our
Scope 1 and 2 emissions to be net zero by 2030.
Discussion centred on findings and guidance from Carbon
Intelligence on measuring Jupiter’s Scope 3 emissions
Update on ESG regulatory reporting under SFDR Internal Working Group established consisting of operations, distribution,
stewardship, and data science teams to strengthen ESG reporting.
H2 2021 Update on and approach positioned around corporate
interim net zero target
Analysis undertaken with consultant Carbon Intelligence to position interim
target. Carbon Intelligence have also been engaged to carry out an in-depth
assessment of our Scope 3 emissions from 2020 and 2021.
Discussed further clarity on governance processes to
oversee fund categorisation and oversight of EU SFDR
products
Creation of an internal Jupiter SFDR Article 8 framework which acts as a
reference guide for investment strategies to establish positioning around the
promotion of environmental and social characteristics. This framework also aids
internal oversight functions to develop their monitoring approach.
Update from legal department on industry issues of
greenwashing and regulatory focus
Update on HM Treasury Greening Finance Roadmap and
FCA Sustainability Disclosure Regulation
Jupiter responded to the FCA Discussion Paper in January 2022. In constructing
this response, Jupiter engaged with the FCA as part of wider industry roundtables
organised by the UK Sustainable Investment and Finance Association and Latham
& Watkins.
Sustainability Disclosure Regulation
Update from product development team regarding
progress around EU SFDR rules
Although the SFDR timeline has been pushed back to 1 January 2023 work on our
data infrastructure, product development and client reporting has continued.
Charity committee update focusing on donation target
for 2022
The charity committee is working towards expanding our charitable activities, to
support both charities local to our headquarters in London and those close to
our regional offices.
51Jupiter Fund Management plc | Annual Report and Accounts 2021
Jupiter became a signatory to the
UNGC in February 2021. Below, we
present our inaugural
communication on progress,
detailing how we incorporate the
ten principles into our business
operations and investment
strategies.
“Jupiter Fund Management plc remains committed
to upholding and embedding the UNGC’s ten
principles into our strategy, culture and day-to-day
operations. We are pleased to present our inaugural
communication on progress within the 2021 Annual
Report.”
Andrew Formica
Chief Executive Officer
February 2022
UN GLOBAL COMPACT – COMMUNICATION ON PROGRESS
The following pages outline our ongoing support and commitment
to upholding the ten principles of the UNGC in the areas of:
HUMAN
RIGHTS
ENVIRONMENT
LABOUR
ANTI-
CORRUPTION
Human rights & modern slavery
Upholding human rights across our business
model is embedded in our culture. This includes
both how we treat individuals and how we
encourage individuals within the Group to
interact with each other.
We protect the rights of our employees through
our employment policies and practices, which
prohibit discrimination and promote inclusivity.
At Jupiter, diversity and inclusion remains a key
priority for our stakeholders and an area of focus
for the Group. More details on Jupiter’s culture
and the ways in which we are promoting
diversity and inclusion can be found from
page 36.
Jupiter began participating in the Workforce
Disclosure Initiative (WDI) in 2019. The WDI
survey has been designed to gather information
on the issues most crucial to decent work and
human rights in the workplace, such as evidence
of efforts to improve health and safety
standards, policies and practices related to
employee wellbeing, and actions relating to
supply chain management.
We have due diligence procedures in place to
ensure our suppliers uphold human rights both in
their own organisations and, in turn, in those of
their suppliers. We have worked to enhance our
ability to assess any emerging risks of modern
slavery or potential human rights abuses
anywhere within our supply chain.
During 2021, we developed a new framework,
policy and code of conduct for supplier
relationships. Together, these require that ESG
factors will be considered in the evaluation of all
new providers, ensure that ESG due diligence will
be undertaken on a regular basis and request that
suppliers conform to our code of conduct.
We have committed to further work during 2022
to embed ESG consideration deeper into our
range of guiding frameworks.
Working with regulators and state
authorities
Compliance with all relevant legal and regulatory
requirements is of critical importance to our
business. Our culture supports ethical behaviour
and individual accountability. We encourage
employees to raise any concerns through our
confidential whistleblowing arrangements.
All entities within the Jupiter Group deal with
respective regulators and state authorities in an
open and cooperative way. The Group discloses
to its regulators and state authorities anything
relating to the Group of which that regulator or
state authority would reasonably expect notice.
As an investment firm, our policies and
procedures designed to combat financial crime
are of material importance to our business.
Financial crime includes money laundering,
terrorist financing, bribery and corruption, tax
evasion and fraud. We have numerous policies
and procedures designed to reduce the extent
to which Jupiter’s products could be used in
connection with financial crime and a dedicated
financial crime team within the compliance
department.
Taxation
We do not tolerate tax evasion, nor do we
tolerate the facilitation of tax evasion by any
person acting on the Group’s behalf. We seek to
manage our tax affairs in a straightforward way,
which means that we comply with our tax filing,
reporting and payment obligations in all
jurisdictions in a timely manner.
Our corporate structure and operating model
ensure that our tax affairs are transparent to the
tax authorities. Our approach is governed by a
Board-approved tax strategy. We ensure this
strategy, and the procedures and controls which
underpin our approach, are appropriate,
monitored and fully implemented. All of our
employees are required to undergo training in
preventing the facilitation of tax evasion.
ESG AND STEWARDSHIP
continued
52 Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
Human Rights
Principle 1:
Businesses should support and respect the protection of internationally proclaimed
human rights
Highlights
• Please see Jupiter’s Modern Slavery Act and Human Trafficking Statement, published in accordance with Section 54 of
the Modern Slavery Act 2015 (the ‘Act’), which sets out the actions that we have taken to understand all potential
modern slavery risks related to our business, and to implement steps to ensure that slavery and human trafficking are not
taking place in our business or supply chains.
Information Source(s)
Modern Slavery Act and
Human Trafficking Statement.
Principle 2:
Make sure that they are not complicit in human rights abuses
Procurement
• During 2021, we developed a new framework, policy, and code of conduct, which together require:
– ESG to be part of any evaluation of a new provider;
– ESG due diligence to be undertaken for certain suppliers prior to onboarding;
– Ongoing due diligence for certain suppliers on an annual basis; and
– Suppliers to conform to the supplier code of conduct.
• We have committed to further work during 2022 to embed ESG consideration deeper into our range of guiding
frameworks.
• Training: During the period, we rolled out targeted human rights-focused training across the business to those in regular
contact with suppliers, to improve awareness and to provide employees with the tools needed to identify potential risks
of modern slavery and human trafficking.
• Modern slavery: We are seeking updates to disclose modern slavery in the employee handbook, provided to each
employee and details our conduct rules framework and how employees can report unethical behaviour or practices,
such as suspected modern slavery, through internal and external channels set out in our ‘whistleblowing policy’. Modern
slavery is also part of our supplier risk assessment, creating a more targeted approach to due diligence for higher risk
providers.
HR
• Employment policies: Our employment policies adhere to relevant employment laws and best practices, protect our
employees’ human rights and ensure a modern employment proposition including fair terms and conditions and a
comprehensive provision of employee benefits. The Employee Handbook sets out Jupiter’s employment policies, which
is provided to all employees and includes details of our conduct rules framework and our expectation that each
employee acts with integrity, due skill, care and diligence.
• Whistleblowing: We have a whistleblowing policy and service, details of which can be found on our website, adopted
to foster a culture of openness and transparency and to encourage employees to raise concerns about any suspected
wrongdoing.
Investment and stewardship
• We systematically assess and monitor our investments against the human rights agenda. This utilises third-party datasets
to consider investee company approaches and behaviours. During the year we have also increased data resource that is
targeted at scrutinising companies for UNGC violations and other recognised global norms.
• These protocols apply across strategies. However, during the period Jupiter has established its EU SFDR Framework. Our
Article 8 and 9 products also reference company behaviours around the UNGC.
• During the period, we sought to strengthen ESG integration in line with asset classes, with a particular focus on fixed
income. We developed a proprietary Sovereign ESG Rating Framework as a tool for fund managers and analysts to use as
part of their investment process. Over 15 different indicators linked to reputable global data sources span across ESG
themes.
Information Source(s)
Modern Slavery Act and
Human Trafficking Statement.
2020 CSR Report
2021 Stewardship Report
Whistleblowing Policy
Further information on
Human Rights investment
case studies will be available
in the 2021 Stewardship
Report
53Jupiter Fund Management plc | Annual Report and Accounts 2021
Labour
Principle 3:
Businesses should uphold the freedom of association and the effective recognition of
the right to collective bargaining
We support the principles of freedom of association and collective bargaining. The total percentage of employees covered
by collective bargaining agreements can be found within Jupiter’s CSR Report.
Jupiter also operates Connections, our collective consultation staff forum, which has its own terms of reference. Members
of the forum are all employees and represent each department and business area and are directly elected by the relevant
business area.
Information Source(s)
2020 CSR Report
Principle 4:
The elimination of all forms of forced and compulsory labour
As stated above, Jupiter’s modern slavery statement sets out the actions that we have taken to understand all potential
modern slavery risks related to our business, and to implement steps to ensure that slavery and human trafficking are not
taking place in our business or supply chains.
Information Source(s)
Modern Slavery and Human
Trafficking Statement
Principle 5:
The effective abolition of child labour
As stated above, Jupiter’s modern slavery statement sets out the actions that we have taken to understand all potential
modern slavery risks related to our business, and to implement steps to ensure that slavery and human trafficking are not
taking place in our business or supply chains.
Information Source(s)
Modern Slavery and Human
Trafficking Statement
Principle 6:
The elimination of discrimination in respect of employment and occupation
Investments / stewardship:
• To address key labour risks associated with workforces, supply chains, human capital and diversity and inclusion, we
actively work with industry stakeholders to promote continued improvement in these areas. We are an investor
supporter of the WDI, an UK Investor Working Group member of the 30% Club, and joined the ShareAction Good Work
Coalition in 2021. For further information on the roles we played in these industry initiatives and how they have informed
our stewardship practices, please refer to the 2020 Stewardship Report and further information will be disclosed within
our 2021 Stewardship Report.
Procurement:
• London Living Wage is paid to all supplier staff that provide services at our London Head Office.
HR:
• Jupiter operates an equal opportunities policy which includes a commitment to providing equal opportunities in
employment and to not discriminating unlawfully against job applicants, employees, workers or contract workers on the
grounds of their age, disability, gender reassignment, marriage or civil partnership, pregnancy or maternity, race (which
includes colour, nationality and ethnic or national origins), religion or belief, sex or sexual orientation (any of the
characteristics protected by law). Jupiter also operates policies in respect to victimisation and harassment and employees
are encouraged to report any concerns to their line manager, head of department, or HR or use the Whistleblowing
facilities available.
Information Source(s)
2021 Stewardship Report
2020 Stewardship Report
Whistleblowing policy
Diversity & Inclusion
statement
ESG AND STEWARDSHIP
continued
54 Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
Environment
Principle 7:
Businesses should support a precautionary approach to environmental challenges
Investments / stewardship:
• Since joining the NZAM initiative in February 2021, we have disclosed that our fundamental, long-only, developed market
equities strategies (42% of AUM) will be included in the initial target scope and disclosed an interim target of a 50%
reduction in emissions by 2030, against a December 2020 baseline.
We are currently working towards setting asset alignment targets for individual investment strategies, to be disclosed
within Jupiter’s 2021 Stewardship Report (published in April 2022).
• In addition to our robust risk management and governance process, details of which can be found within the 2021
Stewardship Report, during the year the stewardship team have been incorporated into the established quarterly Fund
Management Challenge meetings to enhance ESG scrutiny.
Information Source(s)
2021 Stewardship Report
Principle 8:
Undertake initiatives to promote greater environmental responsibility
Investments / stewardship:
• Collaborative initiatives: In 2021, we became signatories to the following environmental focused initiatives: Finance for
Biodiversity Pledge, FAIRR initiative, NZAM Initiative and Forest Carbon Initiative. For a comprehensive list of market
initiatives that we are involved with, please see Jupiter’s 2021 Stewardship Report.
• Jupiter is represented in the Policy Committee of the UKSIF. This is a committee of policy and ESG experts from the
asset owner and manager community that looks to promote the sustainable finance agenda across government and
policy makers.
• SFDR: As an approach to promoting the environmental and social agenda, Jupiter’s approach to Article 8 status under
SFDR will feature the following ESG characteristics:
1. Transition to a low carbon economy
2. Promotion of a positive stakeholder agenda.
• Regulation: In light of changing best practice and ESG regulation, to increase oversight and firm-wide connectivity on
topics such as environment, our various internal governance forums will now include oversight of the sustainability
performance and approach of our financial products.
Operations:
• We are a founding member of the RE100 initiative and purchase renewable electricity in all of our material offices with
the exception of Hong Kong, where we purchase International Renewable Energy Certificates.
• Waste initiatives – in our headquarters in London, waste volume is tracked through each waste stream and on average
we are recycling 94.8% of waste.
• The Board has committed that our operations will be net zero in Scope 1 and 2 emissions by 2050.
• Please refer to Jupiter’s Environmental Policy Statement and CSR Report for further information on how we are
managing the direct impacts of our activities on the environment and embedding ESG in our operations.
• 2021 Scope 1, 2 and 3 GHG reporting can be found within our 2021 CSR Report.
Suppliers:
• Jupiter assesses the environmental performance of suppliers as part of its purchasing policy and suppliers are expected
to abide by Jupiter’s Supplier Code of Conduct which includes adhering to our ESG values and efforts to reach net zero.
Information Source(s)
2021 Stewardship Report
2020 Environmental Policy
Statement
2021 CSR Report
Principle 9:
Encourage the development and diffusion of environmentally friendly technologies
Investments / stewardship:
Jupiter’s Environmental Solutions strategy seeks to generate long-term capital appreciation and income by investing in
listed equity and fixed income securities that focus on making a positive impact towards environmental and sustainable
objectives. We seek to do this through investment in organisations focused on solving one, or both, of the two main
environmental challenges of our time: climate change and natural capital depletion. The starting point for the analysis
methodology is to establish an investment universe of opportunities that align to one or more of our seven environmental
solution themes: Circular Economy, Clean Energy, Energy Efficiency, Water, Sustainable Agriculture, Nutrition & Health,
Environmental Services, and Sustainable Mobility. Five of our seven themes relate to climate mitigation and adaptation and
are informed by the text of the Paris Climate Agreement data from the IPCC reports.
Information Source(s)
Transparency-Code_
UK_2021_Jupiter-Ecology-
Fund-Global-Ecology-
Growth-Global-Ecology-
Diversified.pdf (eurosif.org)
55Jupiter Fund Management plc | Annual Report and Accounts 2021
Anti-Corruption
Principle 10:
Businesses should work against corruption in all its forms, including extortion
and bribery
Compliance:
• Jupiter has risk-based policies and procedures in place to combat financial crime. These include but are not limited to
anti-money laundering (AML), sanctions, anti-bribery and corruption, fraud, market abuse and tax evasion.
• Training: All Jupiter employees receive regular financial crime training, which includes but is not limited to AML, market
abuse, sanctions, fraud, anti-bribery and corruption, and preventing the facilitation of tax evasion.
• Governance: All policies are subject to at least an annual review by the Financial Crime Compliance Team and follow the
Jupiter Policy Framework. All policies are owned and approved by a Senior Manager or applicable Board/Committee.
However, Senior Managers may delegate certain responsibilities provided that adequate oversight is applied.
• Other policies: As mentioned above, we also have a Modern Slavery Act and Human Trafficking Statement,
Procurement Framework, Policy, and Code of Conduct.
Whistleblowing: As mentioned above, Jupiter has a whistleblowing policy and independent service, details of which can be
found on our website.
Investments / stewardship:
• Our investments are systematically assessed and monitored against corruption risks, utilising third-party datasets and
company engagement opportunities. Our proprietary ESG data platform, ESG Hub, utilises data which assesses company
risk for corruption and flags any material risk incidents. As mentioned above, we have increased our data resources to
improve our scrutiny of companies. Where a company is accused of any form of corruption, we consult the available
information and take appropriate action on a case-by-case basis.
Information Source(s)
2020 CSR Report
www.jupiteram.com/
board-and-
governance/#statement-
and-policies
2021 Stewardship Report.
ESG AND STEWARDSHIP
continued
56 Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
The non-financial information required
to be disclosed under the Companies
Act is detailed below and certain
information is included by reference to
the following locations in the Annual
Report and Accounts:
Jupiter has a number of policies and statements which are in place
to support the effective governance of the organisation. For the
purpose of the non-financial reporting requirements these are
included in the table below together with the impact and
outcome for each policy.
Clients
Treating
Customers
Fairly
This Policy is to ensure that the Group consistently
embeds the principle of treating customers fairly,
which includes commitment to dealing with
investors in its products and its discretionary
clients honestly, openly, competently and with
integrity.
Conflicts
of Interest
This policy is designed to ensure that we operate
to high standards and take all appropriate steps to
identify and prevent, or manage conflicts of
interest that may occur between the interests of
one client and another or between the interests of
a Group company (or an employee) and clients.
Our People
Diversity
and Inclusion
There is a Diversity and Inclusion statement for
both the Board and the wider Company which sets
out our approach to promoting a culture of
diversity and inclusion.
Conduct Rules The Conduct Rules are high-level overarching
requirements that apply to individuals on how
they conduct themselves in relation to their
activities at Jupiter and, where relevant, their
personal conduct. They are designed to ensure our
people act with integrity and uphold the highest
standards of conduct.
Health and
Safety
The policy is designed to protect the health, safety
and welfare of our employees and to provide and
maintain safe working conditions.
Whistle
Blowing
The purpose of the policy is to outline the
channels through which employees can raise issues
or concerns about the activities of Jupiter or its
employees. It has been adopted to foster a culture
of openness and transparency and to encourage
employees to raise concerns of suspected
wrongdoing.
Environment and Society
Environmental This policy provides a commitment to mitigate the
direct impacts of our activities on the environment
wherever possible.
Stewardship The stewardship policy details how we incorporate
voting, governance and sustainability
considerations into our investment management
process to improve the outcomes for our clients.
Tax Strategy This strategy ensures that we comply with our tax
reporting and payment obligations in a timely
manner and that we engage with tax authorities in
a co-operative and transparent way.
NON-FINANCIAL INFORMATION
Human Rights
Human
Rights
We strongly support the protection of individuals’ human rights
and this is embedded in our corporate values. Our employment
policies and practices are designed to protect our employees’
human rights.
Modern
Slavery
Our modern slavery statement details the steps we have taken to
manage the risk of instances of modern slavery in our workplace
and throughout our supply chain.
Data Protection This policy is designed to ensure we protect any personal
information that the Group may hold related to individuals.
Financial Crime
Anti-Bribery
and Corruption
This policy ensures that the Group operates to high ethical
standards and complies with all applicable anti-bribery and
corruption laws.
Anti-Money
Laundering
and terrorist
financing
The Group’s AML framework is designed to ensure that it complies
with the requirements and obligations set out in relevant
legislation, regulations, rules and industry guidance and mitigates
the risk of the Group being used to facilitate financial crime.
Anti-Tax
Evasion
The Group is committed to acting professionally, fairly and with
integrity in all its business dealings and relationships wherever it
operates and implementing and enforcing effective systems to
counter the facilitation of tax evasion.
Market Abuse The purpose of this policy is to ensure Jupiter staff observe the
proper standards of market conduct, protect the integrity of the
markets in which we operate and do not obtain an unfair advantage
from the use of inside information to the detriment of third parties
who are unaware of such information.
Policy implementation
We ensure the effective implementation of our policies by:
• fostering a culture of integrity and accountability;
• clear communication of our policies through our employee induction, training,
management briefings and our intranet, through which we make our key policies
available to our people;
• our governance framework, including our Board, management and reporting
committees, which provide us with a robust structure within which we oversee
the implementation of the policies;
• workforce training programmes, covering areas such as anti-bribery and
corruption, money laundering, market abuse and tax evasion, which employees
are required to complete each year;
• our employee handbook, which assists with contractual terms, expected conduct
and our policies; and
• reviewing the majority of our policies at least annually to ensure they are in line
with best practice, meet our regulatory requirements and are updated with any
changes required for their effective implementation.
The business is responsible for implementing these policies, principles and codes and
their effectiveness is reviewed by our Risk and Compliance monitoring team (second
line of defence) and our Internal Audit function (third line of defence). For further
information on how our three lines of defence model operates, please see the Risk
section on page 60.
We operate an independent whistleblowing line enabling our employees to
confidentially raise any concerns, including non-compliance with our policies and
procedures. The Chairman of our Audit and Risk Committee is responsible for
overseeing the investigation of any whistle-blowing reports.
Non-financial information Section Page
Business Model Our Business Model 6
Principal risks Our Approach to Risk
Management
60
Key performance indicators Key Performance Indicators 18
TCFD Statement ESG and Stewardship 40
57Jupiter Fund Management plc | Annual Report and Accounts 2021
ENGAGING WITH
OUR STAKEHOLDERS
STRATEGIC REPORT
Engagement with our stakeholders in order to understand their views and priorities is critical
to our success and enables us to make better informed decisions. Why we engage, the key
priorities of our stakeholders and the ways in which we engage with them can be found below.
CLIENTS
Why we engage
Our clients are the people and firms that invest in
our funds and segregated mandates. We engage to
help us understand their needs, investment
objectives and priorities, and how these will evolve.
What is important to them
• Investment capabilities.
• Investment returns net of fees.
• Our ESG approach and practices.
• Client service and reporting.
How we engage
• Primarily through our Distribution and Investment
Management teams, who are key to building
relationships with current and potential clients.
• We have held virtual and physical meetings,
conferences and road shows.
• We publish podcasts and articles to
provide clients and potential clients
with our insights into markets.
STATE AND REGULATORS
Why we engage
State authorities set the legal, regulatory and tax
frameworks within which we operate, and regulators
are responsible for supervising their respective
financial systems and the entities which operate in
them. They have an interest in ensuring we act with
integrity, comply with requirements and are effective
stewards of our clients’ investments. We also engage
with regulators and policy makers to help develop
and understand evolving regulatory requirements.
What is important to them
• Protecting the interests of clients.
• Maintaining the integrity of markets and ensuring
their smooth operation.
• How we run our business, including our
governance, control environment and ESG
approach and practices.
How we engage
• Primarily through our Risk and Compliance
and Legal teams, overseen by the
relevant boards of directors.
• Meetings with senior managers and
Directors, where appropriate.
• Regular filings and submissions
regarding investment and business
activities and certain changes thereto.
SHAREHOLDERS
Why we engage
Our shareholders are the people who own the
business and we rely on their support and
engagement to help us deliver our long-term
strategy. Understanding their views and providing
regular updates to them on the performance of the
business is of key importance to the success of the
Company.
What is important to them
• Long-term sustainable business.
• Our ESG approach and practices.
• Attractive returns.
• High standards of governance and effective risk
management.
How we engage
• Our results presentations and roadshows with
investors, which are a critical part of our investor
relations programme.
• Meetings with Directors and senior
management.
• Our shareholder engagement webinar,
which was held before our AGM,
provided shareholders with the ability
to engage with the Board of Directors
before voting at the AGM.
£117.0m
Regulatory capital
surplus
17.1p
Dividends paid
£16.5bn
Gross sales
> Details of how the Board has engaged with and considered stakeholders’ interests in key decisions can be found on pages 81 to 82.
58
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
BUSINESS PARTNERS
Why we engage
Our business partners include our distribution
partners (fund of funds, platforms, global financial
institutions, advisers, wealth managers, life
companies, private banks and consultants) and our
suppliers. They are critical to ensuring the effective
distribution and servicing of our products and they
supplement our operational infrastructure, which
enables us to benefit from their expertise and scale.
What is important to them
• A product range which meets their clients’
requirements and delivers outperformance.
• Development of beneficial and effective
long-term business relationships.
• Prompt payment for services and commissions.
• Accurate and timely information, in order to fulfil
their obligations.
How we engage
• Our Distribution and Investment teams engage
regularly with our distribution partners through
meetings and briefings.
• Direct and regular contact with the relevant
business areas to which the services/goods are
supplied.
• Our Procurement team who implement
the governance framework for
managing the relationships.
• Direct meetings with senior
managers and directors.
SOCIETY
Why we engage
We have a responsibility to make a wider
contribution to society. This includes the effective
stewardship of the assets we invest on behalf of our
clients, which we believe is the biggest potential
impact we can have on society.
What is important to them
• The impact we and our investee companies have
on the environment and wider society.
• Our plans to improve and enhance the impact we
have and achieve better outcomes for our
stakeholders.
• Our initiatives to support diversity and inclusion
across the industry.
How we engage
• Our Investment managers, supported by our
Stewardship team, regularly hold meetings with
investee companies on ESG matters to help drive
benefits for society.
• We have direct engagement with our
charitable partners, including through
our volunteering partnership scheme.
• The information we publish and our
responses to direct queries.
PEOPLE
Why we engage
It is our people who enable us to deliver for our clients
and make a positive difference in the world. We
engage with them to understand their priorities which
helps us to retain, develop, motivate and recruit
talented individuals who are aligned with our culture.
What is important to them
• Opportunities for career progression and
development.
• Working in a diverse and inclusive culture.
• Fair reward and supportive benefits package.
• Our ESG approach and practices.
• Flexible working arrangements.
How we engage
• We have an employee forum, ‘Connections’,
who feedback and discuss employee views
and initiatives to support our employees.
• All-employee townhalls and staff reconnection
events.
• Employee surveys.
• Through our management structure including our
Senior Leadership Group.
• Our CEO holds ‘Meet the CEO
session’ with staff from across
all areas of the business.
• Our all-employee magazine.
76%
Employee
engagement
score
10
Critical supplier
relationships
£200k
Charitable
donations
Section 172 Directors’ Duty
The Directors have continued to discharge their duties in accordance with section 172 of the Companies Act, which includes the need to consider the
interests of the Company’s wider stakeholders. Details of how the Directors have fulfilled their duties can be found throughout the Strategic and
Governance reports. The content above on stakeholder engagement and further details on how the Directors’ duties are discharged, and the oversight of
these duties, are included in the Governance section starting on page 68.
59
Jupiter Fund Management plc | Annual Report and Accounts 2021
RISK AND FINANCE
COMMITTEE
The Risk and Finance Committee is
responsible for the oversight of the
Group’s risk profile relative to its agreed
risk appetite. It is accountable for
overseeing the design and operating
effectiveness of the Group’s risk
management and capital management
frameworks and policies, including
compliance with relevant regulations.
The Committee reports material findings,
recommendations and escalations to
the Executive Committee and, for
certain matters, to the Audit and
Risk Committee.
EXECUTIVE COMMITTEE
The Executive Committee is responsible
for implementing the strategy and
objectives set by the Board and
communicated by the Chief Executive
Officer, and ensuring the implementation
of a sound system of internal governance,
control and risk management. This
includes monitoring compliance with the
regulatory framework of the markets in
which it operates. It is also responsible
for implementing the Group’s culture,
values and standards.
AUDIT AND RISK
COMMITTEE
The Audit and Risk Committee is
responsible for reviewing and monitoring
the integrity of the Group’s financial
statements. It is also accountable for
reviewing the effectiveness of the
Group’s risk management and its internal
control systems, oversight of the Internal
Audit function and the Group’s
relationship with external auditors.
STRATEGIC REPORT
OUR APPROACH TO
RISK MANAGEMENT
Managing risk in a manner which helps Jupiter achieve its strategic goals whilst protecting our
clients, business and stakeholders.
The Board and executive
management are responsible for
establishing and maintaining a
strong risk management and
compliance culture that embeds
and supports a high level of risk
awareness and a strong internal
control environment. This is
achieved through leadership
behaviours which establish the
tone from the top, our governance
structure, a clear definition of roles
and responsibilities, and a robust
risk management framework.
The Group has a comprehensive approach to
identifying, monitoring, managing and mitigating
risk.
Risk governance and responsibilities
The Group operates a three-tier risk governance
framework, generally known as the Lines of
Defence model, which distinguishes between risk
management and risk oversight. This approach
provides a clear and concise separation of duties,
roles and responsibilities.
The Board has ultimate responsibility for
oversight of the risks of the Group and for
determining the risk appetite limits within which
the Group must operate. It delegates day-to-day
responsibility of risk management and control
activities to the Chief Executive Officer assisted
by the Executive Committee and the Risk and
Finance Committee, with oversight from the
Audit and Risk Committee.
The Enterprise Risk Management Framework
(ERMF) clearly defines the roles and
responsibilities for risk management and provides
a process for escalation through our governance
structure, which enables ongoing and robust
oversight.
THREE LINES OF DEFENCE
FIRST LINE
RISK AND CONTROL
MANAGEMENT
The business functions and line managers
across the Group are responsible
and accountable for the identification,
assessment and management of the
individual risks and associated
controls within their respective
areas of responsibility.
SECOND LINE
RISK AND CONTROL
OVERSIGHT
Risk and Compliance, supported by additional
control and oversight functions, provides
independent oversight and challenge with
respect to the first line’s management of
their risks, and provides assurance that
the Group’s regulated activities are
undertaken in accordance with
regulatory requirements.
THIRD LINE
INTERNAL AUDIT
Internal Audit is an independent provider
of assurance over the effectiveness of the
Group’s processes and governance with
regards to risk and internal control, assessing
whether they are adequately controlled
and challenging management to
improve their effectiveness.
60
Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
1. Risk appetite
The Group’s risk appetite defines the level and type of risk
that the Group is prepared to accept in pursuit of its
strategic objectives and business strategy, taking into
account the interests of its clients, shareholders and other
stakeholders, as well as capital and other regulatory
requirements.
An important part of the Board’s remit is to determine the
Group’s risk appetite, taking into account its strategic plans,
the business environment, and the current and likely future
condition of our business and operations.
2. Top-down risk assessment (TDRA)
The TDRA identifies the Group’s material risks and monitors
the profile of these risks. It is informed by relevant data and
information pertinent to the specific risk category, which is
used to assess the residual risk impact and the likelihood of
the residual risk crystalising.
The individual residual ratings applied to each risk, and the
qualitative rationale, are utilised to create a consolidated
view of the Group’s risk profile which is presented to the
Risk and Finance Committee for their oversight and
approval, before being presented to the Audit and Risk
Committee.
3. Risk and control self assessment (RCSA)
The detailed, bottom-up identification and assessment of
operational risk is performed by individual organisational
units via an RCSA. The assessment identifies and monitors
material risks and associated key controls by considering
the operating environment, processes, roles and
responsibilities, as well as risk incidents. Risks are assessed
on both an inherent and a residual basis with ratings
determined for potential impact and likelihood. Where
processes or controls are seen to be insufficiently robust,
line management is required to take appropriate action and
define improvements to the operating environment to
ensure they pose a minimal (or acceptable) level of risk to
the Group.
The ERMF enables Jupiter to identify and manage the material risks to which it is exposed. The ERMF supports the effective management of risks to ensure that the Group’s risk profile
remains within its risk appetite; protects and enhances stakeholder value by contributing to the achievement of our objectives; and informs the Three Lines of Defence to ensure
effective escalation of material risk issues.
Enterprise
Risk Management
Framework
1. Risk
Appetite
6. Key Risk
Indicators
5. Risk
Incidents
2. Top-Down
Risk
Assessment
4. Operational
Risk Scenario
Analysis
3. Risk and
Control Self
Assessment
ENTERPRISE RISK MANAGEMENT FRAMEWORK (ERMF)
2021 enhancements
During 2021, a number of initiatives were undertaken to enhance the way we monitor, assess and manage risk. These included:
• Enhancement of our enterprise risk taxonomy to ensure a consistent methodology and approach for the assessment and reporting of risks;
• Further development of the qualitative components of our risk appetite statement;
• Redevelopment of our TDRA process;
• Further enhancement of our framework for the management of liquidity risk;
• Building our framework to support the assessment of ESG risks; and
• Development of our processes to support operational resilience.
4. Operational risk scenario analysis
Operational risk scenario analysis is a forward-looking
assessment of exposures to severe but plausible operational
risk events. It is used by the Group to identify and quantify
the material risks that have the potential to impact Jupiter,
based on the experience and opinions of internal subject
matter experts. These are collated via a series of workshops
and are further supported by internal and external event
histories. A variety of scenarios (differing in nature, severity
and duration) is used to estimate the impact of events on
capital requirements. The Group also uses scenario analysis
to ensure that we understand our exposure to high-severity
events and implement mitigating actions, in line with our
risk appetite.
5. Risk incidents
A risk incident is a failure of process, people or systems
which results in an actual or potential impact. Incidents are
reported, recorded and investigated to determine root
causes, impacts (e.g., financial losses, regulatory/legal
breaches, etc.), themes and to ensure appropriate
remediation work is completed to enhance the process,
improve the control environment, and make good any
negative outcomes that have resulted from the failure.
Incidents are monitored and captured across the business
and independently reviewed to ensure completeness and
accuracy. Analysis of incidents is used to support our TDRA,
RCSA and operational risk scenario analysis processes.
6. Key risk indicators (KRIs)
KRIs are used by the Group to provide an early signal of
changing risk exposure. We set thresholds and use them to
monitor those exposures, which informs our overall
assessment of the risk.
Leading and lagging KRIs are employed to help identify
trends and emerging risks which are used to inform and
support management decision making.
The Group’s suite of KRIs is a key input into the TDRA, as
their performance helps in determining the view of the
Group’s risk profile.
Risk reporting
Our view of the risk profile of the Group is reported
regularly through our governance structure to ensure it
receives an appropriately high level of senior management
and Board attention. The Board takes action where a risk is
deemed to be outside of appetite.
Emerging risks
Emerging risks are a condition, situation or trend that could
significantly affect the Group’s financial strength,
competitive position or reputation. These risks are raised by
the business and challenged to consider likelihood, impact
and action required.
Emerging risks are captured through the quarterly TDRA
process, as well as the RCSAs, to ensure that we are fully
prepared should they begin to crystallise.
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Jupiter Fund Management plc | Annual Report and Accounts 2021
OUR APPROACH TO RISK MANAGEMENT continued
RISK PROFILE
The Group is exposed to various risk types in
pursuing its business objectives which can be
driven by internal and external factors.
Understanding and managing these risks is both a
business imperative and a regulatory requirement.
Our taxonomy defines and describes these risks,
providing a consistent methodology for
assessment and reporting.
Some risks are pursued to support the business
plan, such as the risks relating to investment
performance. Other risks are inherent in routine
business activities, such as the risk of financial
crime. The differing risks faced by the Group are
documented within our taxonomy and managed
through the Group’s ERMF in line with risk
appetite.
The type and severity of the risks we face can
change quickly in a complex and competitive
environment, therefore the framework for
managing these risks is dynamic and
forward-looking to ensure it considers both
current and emerging risks which could
potentially impact the Group.
Enterprise risk taxonomy
As an asset management firm, Jupiter’s most
material risk exposures are in the strategic, market
and operational (including regulatory) risk
categories. However, our exposure to capital
adequacy, liquidity, and credit/counterparty risks
is also monitored to ensure they are managed on
a prudent basis and remain within regulatory
requirements and the Group’s risk appetite.
In addition, the Group is exposed to transversal
risks, including ESG, operational resilience,
reputational and conduct. These risks, and
associated harm, can crystalise across multiple
areas within our taxonomy. We assess these risks
as part of the TDRA, RCSAs and risk incidents.
ESG risk
The Group defines ESG risk as the risk that we do
not meet our ESG obligations. The Group is
committed to managing the direct impacts of its
activities on the environment and has sought to
embed ESG considerations into the broader
governance ethos and culture of the Group.
Our wider approach to ESG and Stewardship is
set out on page 40 and our approach to the
management of potential material climate risk is
described on page 47.
Operational resilience risk
The Group defines operational resilience as the
Group’s ability to prevent, adapt, respond to,
recover, and learn from operational disruption.
Operational resilience addresses how the
continuity of the services that the Group
provides are maintained regardless of the cause
of disruption and helps to ensure that it is
prepared for the inevitability of disruption, rather
than only trying to minimise the probability of
disruption occurring. It includes preventative
measures and the capabilities in terms of people,
processes and organisational culture to adapt and
recover when things go wrong.
Reputational risk
The Group defines reputational risk as the risk of
loss or other adverse impact arising from
unfavourable perception of the firm on the part
of customers, counterparties, employees,
regulators, shareholders, other stakeholders, the
media or the general public.
For example, reputational risk can arise as a result
of operational risk incidents, strategic decisions,
or generally as a result of inappropriate behaviour
of the Group, as perceived by various stakeholder
groups.
Conduct risk
The Group defines conduct risk as those which
can arise from action, or inaction, which results in
customer detriment, negative impact to market
stability or restricts effective competition. The
Group takes steps to mitigate the occurrence of
conduct risks that could have a detrimental
impact on our clients, markets or Jupiter itself.
Harm
The Group recognises that harm can be the result
of the crystallisation of any of the risks to which
it is exposed and takes steps to mitigate the
impact on our clients, the markets in which we
operate and on Jupiter itself. The ERMF considers
both financial and non-financial impacts, which
provide important insight when considering these
three elements of harm.
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Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
Principal risks
2021 risk
direction
1
Strategic Risk
2
Market Risk
Operational Risk
3
People Risk
4
Client and Fiduciary Duty Risk
5
Execution, Processing and Reporting Risk
6
Product Risk
7
Model Risk
8
Data Management Risk
9
Technology and Information Security Risk
10
Outsourcing and Supplier Risk
11
Regulatory Risk
12
Legal Risk
13
Financial Crime Risk
Increasing Impact
Increasing Likelihood
PRINCIPAL RISK HEAT MAP
The heat map illustrates the relative impact and likelihood of a risk
crystalising on a residual basis, which is considered to be the risk exposure
after the application of existing, mitigating controls.
9
1
2
11
4
6
13
3
8
5
7
10
12
The heat map reflects the principal risk types to which the Group is
exposed (as defined within our taxonomy) based on the potential impact
and likelihood of them crystallising. We monitor all risks within the
taxonomy, as well as additional transversal risks, through our regular TDRA
of our risk profile.
Overall, our risk profile remained stable during 2021, despite the ongoing
headwinds from Covid-19 and we remain well-placed to adapt to further
geo political challenges and the pace of global change.
Technology and Information Security risk, and particularly the potential
threat of a cyber-attack, remains one of our most material risks; however,
the perceived likelihood of this risk has remained stable from 2020, as we
continue to invest in our control environment and seek to reduce
vulnerabilities where possible.
Regulatory risk remains an area of focus, linked to continuing regulatory
change, and has increased during the year. The Group’s regulatory footprint
continues to evolve in line with our strategic activity, increasing in both
complexity and geography, however this area remains well understood and
managed.
Our exposure to market risk remains stable, and arises on seed investments
which are hedged for beta risk, where it is possible to do so. Gains and
losses therefore generally arise from under or overperformance against a
fund’s benchmark.
Understanding and managing our People risk is essential to the success of
our business. This risk remained broadly stable during the year as we moved
from the relaxation of Covid-19 restrictions into our new hybrid working
model.
Further details on the assessment of each risk are included in the tables on
the following pages.
Increasing Decreasing Stable
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Jupiter Fund Management plc | Annual Report and Accounts 2021
PRINCIPAL RISKS
Strategic Risk Market Risk Operational Risk
Risk
• The risk to our business as a result of
matters inherent in the nature of our
business model or the financial and
competitive markets in which we
operate.
• The risk of underperformance of funds
managed by the Group relative to
benchmarks, objectives or competition
is included in this definition.
• The risk of loss arising from market
movements. This includes the risk that
any market risk mitigation techniques
prove less effective than expected.
• Investment performance risk is included
under strategic risk.
• The risk of actual or potential loss and
or client harm emanating from
weaknesses or failures in our systems
and controls, related to people, systems
or processes, or from external events.
These include risks arising from failing to
properly manage key outsourced
relationships and cyber-security.
• Regulatory (failure to comply with
regulatory obligations) and legal risk are
included in this definition.
Potential
Impact
• Failure to grow AUM.
• Loss of client confidence.
• Reputational damage.
• Loss of revenue.
• Unexpected losses from seed
investments in funds, foreign currency
exposures or interest rates on cash
deposits.
• Impact on the Group’s operating
environment which in turn can lead to
client dissatisfaction or harm.
• Financial implications.
• Reputational damage.
• Increased regulatory scrutiny if a theme
or systemic failure is identified.
Mitigation
• The Board sets the strategy and ensures
the organisation has the right structure,
leadership, culture and resources to
execute it.
• The Board and Executive Committee
regularly review the strategic plan,
opportunities and threats, budgets and
targets.
• Independent second line oversight of
investment risks.
• Progress is monitored and, where
required, corrective action is taken.
• Hedge investment to limit relative
volatility across the seed capital
portfolio.
• Seed investments, redemptions and
hedging are reviewed and approved by
the seeding committee.
• We continue to invest in our control
environment and maintain efficient and
well-controlled processes. We operate
a comprehensive ERMF which enables
the business to understand where risks
lie and focus its efforts on key activities.
• Regular review of control environment
with corrective action taken where
required.
• We maintain a robust risk and
compliance culture and require all
employees to undertake training on
relevant risk matters.
2021
Summary
• Overall investment performance over
three years has been positive with 58%
of mutual fund AUM performing above
the median peer group. We remain
committed to delivering superior
long-term investment performance and
monitor this closely in order to ensure
that we understand and challenge
appropriately and are able to take
prompt actions as necessary. We have
seen continued uncertainty in markets
during 2021, but believe we are
well-placed to weather the increasing
likelihood of further geo political
events, as we have a diverse range of
products, distribution channels and
flexibility in our business model to
respond to significant market disruption.
Our Investment Risk team continued to
work closely with fund managers to
challenge fund risk profiles, and
independently assess the portfolio risk.
We continued to diversify the business
in 2021 across regions and asset classes
as we successfully implemented
initiatives to enter new markets that
provide further growth opportunities
and reduce our reliance on individual
markets, supported by enhanced
monitoring of the related risks.
• The Board continues to set aside an
amount of seed capital to be used to
invest in Jupiter funds to support and
grow our investment offering. We
monitor these positions regularly, and
maintain appropriate hedges and limits,
linked to our risk appetite, to ensure
that our capital is not put at undue risk.
• See pages 65 to 66 for summaries.
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Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
Operational Risk
3. People Risk 4. Client and Fiduciary Duty Risk 5. Execution Processing
and Reporting Risk
Risk
• The risk of failures or poor practices
relating to people management.
• The risk of inadequate client
management including sales
misrepresentation, suitability
assessments, on-boarding, client service
obligations and Treating Customers
Fairly. Ensuring that our products are
both suitable and appropriately
represented to clients is key to ensuring
that they can make informed decisions
on the funds they invest in.
• The risk of failures related to
transaction capture, execution,
maintenance, and reporting.
2021
Summary
• Jupiter prides itself on its culture, the
quality of its workforce and ensuring
that all staff feel valued and rewarded.
Our culture is a key differentiator,
enabling us to attract, motivate and
retain talented individuals. We give
autonomy, coupled with personal
accountability, and encourage
independence of thought and challenge.
We actively manage succession and
succession plans are in place for critical
staff.
• We have embedded diversity and
inclusion goals and continue to invest in
the development of our culture and
staff. We remain committed to
supporting our staff through the
Covid-19 pandemic and have rolled out
initiatives such as the hybrid working
model to provide additional flexibility.
• The Group undertakes market testing to
ensure the products we are creating and
distributing meet client needs and
demand. We have a robust suite of
policies and procedures to manage
client and fiduciary duty risk, which
must be followed by the business.
Remote working continues to provide a
challenging backdrop to maintaining
client engagement. However, we have
adapted our engagement model and
developed our use of technology to
ensure we remain connected to our
clients and understand their needs.
• We continue to invest in people,
systems and processes to ensure that
we are able to efficiently provide the
quality of services our clients expect, as
well as meet our ongoing regulatory
requirements. Our operating model was
strengthened during the year by
consolidating a number of services and
platforms, allowing us to better support
future growth opportunities and to
ensure that we are appropriately
operationally resilient.
6. Product Risk 7. Model Risk 8. Data Management Risk
Risk
• The risk of product flaws or defects, or
failure to adhere to specification.
• The risk of poor design or
implementation of models.
• A data risk is a potential for business
loss related to the governance,
management and security of data.
2021
Summary
• Throughout 2021 we continued to
review our product offering to assess
performance in line with client
expectations. We have a strong product
development and management
framework and have developed a
robust framework to support the
implementation of SFDR and the new
article classifications, including both
existing funds and the launch of new
SFDR-compliant funds. As the
requirements of the UK Directive
become clearer, we will further develop
and enhance our framework, evolving
where necessary.
• Models are used throughout the
organisation to help support decision
making and oversight of key activities.
Where investment models are used, we
continually challenge the controls,
governance oversight and resilience to
ensure appropriate validation is
performed and the output is consistent
and accurate.
• Ongoing work has been undertaken to
ensure that we remain able to
appropriately govern and manage our
data and that of our clients. This has
included projects to enhance our
processes and systems across product
types and clients, as well as a review of
our enterprise-wide data warehouse
and the development of the ESG Hub.
We continue to invest in industry-
leading tools and cloud-based data
solutions, managed by a dedicated data
governance team.
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Jupiter Fund Management plc | Annual Report and Accounts 2021
OUR APPROACH TO RISK MANAGEMENT continued
Operational Risk
9. Technology and Information
Security Risk
10. Outsourcing and Supplier Risk 11. Regulatory Risk
Risk
• The risk of deliberate attacks or
accidental events that have a disruptive
effect on interconnected technologies
(excluding third-party failures, which are
covered under Outsourcing and
Supplier).
• The risk of incidents or failure of
providers of services to deliver on their
obligations, or inadequate selection or
oversight of providers.
• The risk of failing to comply with our
regulatory obligations. This includes
failures to implement changes required
to meet new regulatory requirements.
2021
Summary
• Our strategy for the management of
information security and cyber security
continues to evolve, to ensure that
vulnerabilities are identified and
remedied as quickly as possible. We
have invested in ongoing training and
awareness on the risks of phishing and
similar attacks, and we continue to work
with our third-party suppliers to ensure
that they are able to demonstrate
compliance with Group standards and
internationally recognised good
practice. Jupiter is certified in
accordance with the UK government-
backed Cyber Essentials Plus scheme,
demonstrating our ongoing
commitment to reducing the likelihood
of a successful cyber security attack,
despite the rising number of external
attacks seen across the industry.
• Work has continued to ensure that our
overarching framework for the
delegation of activities to third parties
remains in line with regulatory
requirements. Third-party outsourcing
remains a key part of Jupiter’s business
model, and we successfully completed
two significant migrations during the
year in order to consolidate support for
our UK and European funds. During the
year, we developed a new supplier
management framework, incorporating
an enhanced approach to third-party
risk assessments, in order to ensure that
we are able to identify, manage and
monitor our outsourced arrangements
in line with internal and external
expectations.
• Regulatory change remains significant as
we continue to see a high volume of
regulatory activity across the industry
alongside our expansion into new
markets, which further increases our
regulatory footprint. To ensure we
remain well placed to meet these
challenges, we continue to invest in
education, training and a robust second
line function. We have a cohesive and
holistic approach to managing the
evolving landscape of regulatory risk
across jurisdictions and utilise industry
insight and specialist expertise as
required.
12. Legal Risk 13. Financial Crime Risk
Risk
• The risk of failing to comply with our
legal obligations.
• The risk of financial crime such as
money laundering and terrorist
financing, bribery and corruption, fraud,
market abuse or tax evasion.
2021
Summary
• New funds, strategies and jurisdictions
have increased the quantum and
complexity of the legal risk Jupiter faces,
specifically with our increasing presence
in the US. Through our dedicated and
experienced legal support team we are
able to continue to support the
business to navigate through these new
challenges and strike a balance between
maintaining a standardised business
model whilst meeting both client and
local geographic needs.
• Regulatory change, delegation to third
parties and geographical distribution
continue to increase the complexity of
the financial crime requirements with
which we must comply. We continue to
enhance our capabilities through
changes to our operating model and
greater use of technology where
appropriate.
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Jupiter Fund Management plc | Annual Report and Accounts 2021
STRATEGIC REPORT
ESG risk
Our ESG risk is increasing as a result of client focus, the uncertainty around regulatory requirements and industry challenges on data. Management of
ESG risk is built on a combination of effective monitoring of significant holdings, application of expertise to identify risks and awareness of wider
implications from a communication and client perspective. In the first line, individual fund managers are supported by experienced ESG Investment
Directors, as well as the stewardship team. Oversight is conducted by the CIO office and Risk and Compliance to ensure the supporting framework
remains relevant and robust.
The Group completed several regulatory initiatives to ensure that we adapted to the evolving ESG-related regulatory and legal risk brought about by
developments in local and overseas environments. Amongst these initiatives were developments to our SFDR product framework, transitioning of
several products from SFDR Article 6 to Article 8, continuing development of our proprietary ESG data hub, and publicly disclosing the Group’s net
zero target framework under the NZAM initiative.
Conduct risk
We have evolved our approach to managing conduct risk, linking it to individual and corporate behaviours, supported by monitoring by Internal Audit
and Risk and Compliance. Our assessment of conduct risk has remained stable during 2021 and the Group continues to take steps to mitigate conduct
risks that could have a detrimental impact on our risk profile. We have worked to ensure that risks related to the integration of staff into our
corporate culture as part of the Merian acquisition were appropriately managed. We believe that all staff should act with integrity and have
developed senior management accountabilities and a governance framework to promote appropriate behaviours. We have further developed our
organisational visions and values to further these outcomes and reduce the potential for detrimental impact to our clients, the Group or the markets
in which we operate.
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Jupiter Fund Management plc | Annual Report and Accounts 2021
CHAIRMAN’S INTRODUCTION
TO GOVERNANCE
How these cultural pillars have been embedded
across the organisation and the initiatives to help
drive our culture has been an area of focus for
the Board during the year. This has been
particularly important in light of the remote
working environment, which makes embedding
culture across the organisation more challenging.
Culture was a key part of our Board strategy
off-site discussions and has been monitored
throughout the year. The Group has a cultural
dashboard which provides a qualitative and
quantitative view of our culture linked to our
cultural pillars. It includes consideration of a
variety of metrics including employee survey
results, employee turnover, appraisal processes,
diversity and inclusion, incidents, staff training
and development, control effectiveness, overdue
actions from the business control forums and
phishing test results. This helps the ongoing
monitoring of the Group’s culture by both the
Board and management.
Nichola Pease
Chairman
“Our purpose has
not changed; we
exist to help our
clients achieve their
long-term
investment
objectives. This
puts our clients at
the centre of
everything we do.”
requirements to ensure we have a range of
products and operate our business in a way which
meets their investment objectives.
At the 2021 Board strategy off-site held in June,
we reviewed and refined our strategic priorities.
Whilst this has not changed our overall strategy,
it has sharpened our priorities. We believe that
delivering on these key strategic priorities (as per
page 16) will ensure the long-term sustainable
success of our business. Details of the key Board
activities during the year, how these link to our
strategic priorities, principal risks and the key
stakeholders impacted can be found on page 77
to page 80.
Culture
Ensuring we have a culture which supports our
purpose and the delivery of our strategy, whilst
enabling us to attract and retain the best talent, is
a top priority for the Board. We have clear and
defined cultural pillars which underpin how we
do business; they put our clients first and ensure
we recognise the value of our people who work
collectively in order to succeed together, and
that we challenge ourselves to ensure innovation
and continuous improvement.
Dear Stakeholder
Good governance is critical to the development
of a sustainable business and leads to better
outcomes for all stakeholders. As part of our
stewardship activities, we engage with the
companies we invest in on governance matters, a
key part of which is ensuring transparency over
their governance arrangements. I am therefore
pleased to present our corporate governance
report for the year ended 31 December 2021. This
report details how we have applied the provisions
of the UK Corporate Governance Code and
provides an overview of our governance
framework and the work undertaken by the
Board and its Committees during 2021.
Purpose and strategy
It is the Board’s responsibility to set the
Company’s purpose and strategy. Our purpose
has not changed; we exist to help our clients
achieve their long-term investment objectives.
This puts our clients at the centre of everything
we do and ensures our business is focused on
their long-term investment objectives which will
evolve over time. In turn we have to evolve our
business and strategy in line with their
68
Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
Board and Senior Executive changes
There have been a number of changes to our
Board and Senior Executive team during 2021.
Edward Bonham Carter and Jonathon Bond did
not seek re-election from shareholders at the
2021 AGM and therefore stepped down from the
conclusion of the meeting in May. Edward has
played a significant part in Jupiter’s development
over the last 26 years, including seven years as
CEO. Jonathon was our Senior Independent
Director and had served on the Board for seven
years before stepping down in 2021. On behalf of
the Board, I would like to thank both Edward and
Jonathon for their significant contribution to the
Company and wish them all the very best for
their future endeavours.
We were delighted to welcome David
Cruickshank and Dale Murray to the Board,
effective 1 June 2021 and 1 September 2021
respectively. David was the former Chairman of
Deloitte’s UK and then Global Boards and brings
very broad experience and a detailed
understanding of business transformation, people
management and ESG matters. Dale is a
technology entrepreneur who co-founded the
British mobile telecoms software business Omega
Logic. Dale brings technology expertise and a
wider range of business expertise, primarily from
outside financial services. Upon joining the Board,
both David and Dale have also become members
of our Nomination and Audit and Risk
Committees.
Polly Williams, having served on the Board for
seven years, will not be seeking re-election at this
year’s AGM and will therefore step down from
the Board at the conclusion of the meeting. Polly
was appointed to the Board and as Chairman of
the Audit and Risk Committee in March 2015. She
has made a significant contribution to the
Company over her tenure and has been an
excellent Chairman of the Audit and Risk
Committee. I would like to extend our gratitude
for her contribution to Jupiter’s development
which has benefited all of our stakeholders.
With effect from the conclusion of the AGM,
David Cruickshank, who has served on the Audit
and Risk Committee since 1 June 2021, will be
appointed Chairman of the Audit and Risk
Committee.
We are delighted to confirm the appointment of
Suzy Neubert with effect from 1 March 2022.
Suzy has had a distinguished career within asset
management, having started as an analyst she
then moved into sales and marketing at Merrill
Lynch and J O Hambro Capital Management,
where she served as the Global Head of
Distribution until 2020. Her detailed
understanding of the sector and her expertise in
distribution will be invaluable to the Company as
we pursue our growth strategy.
At the Executive Committee level our CIO
Stephen Pearson and our HR Director Andy
Robinson announced their retirement from the
firm during the year. Both have made a significant
contribution to Jupiter during their tenure,
particularly Stephen who has been with the firm
for over 21 years and has been our CIO since 2015.
We have welcomed our new CIO, Matthew
Beesley, and our new HR Director, Tracey Kinsella,
and were delighted to appoint our Deputy CIO,
Katharine Dryer, and Deputy Head of Distribution,
Warren Tonkinson, to the Executive Committee.
Diversity and inclusion
Ensuring that we have an inclusive culture where
every one of our employees feels included, able
to be themselves and bring their own diversity
and independence of thought is a key part of our
business model. We believe that having a diverse
workforce leads to better decision making,
increased creativity, innovation and productivity.
Diversity and inclusion has therefore remained a
key area of focus across all levels of the
organisation and more information on our
initiatives to improve diversity within the Group
and the industry can be found in our people
section on page 39.
At a Board level we have improved our gender
diversity from last year with the appointment of
Dale Murray and currently 33% of the Board are
women. If Chris Parkin, who is a shareholder
nominated Non-Executive Director, is excluded
from the calculation the percentage of women
on the Board increases to 38%. The appointment
of Suzy Neubert will also improve the Boards
diversity, with one Director on the Board from an
ethnic minority. The gender diversity of the
Board will not be impacted over the long term as
Polly Williams will step down in May. The Board’s
diversity and inclusion policy can be found on
page 87.
Compliance with the Code
The Group is a strong supporter of the UK
Corporate Governance (the Code), which is
applied on a comply or explain basis. This year
there are two provisions of the Code with which
the Company did not fully comply throughout
the year. These provisions relate to the
composition of the Group’s Audit and Risk and
Remuneration Committees, following Jonathon
Bond’s decision to step down at the 2021 AGM in
May. This resulted in the Committees not
meeting the recommended minimum number of
independent Directors, in accordance with
provisions 24 and 32 of the Code, for part of the
year. This is due to the timing of Board changes
and the need to ensure that each Committee has
the right balance of skills and experience.
The Audit and Risk Committee comprised two
independent Non-Executive Directors, rather
than three, for the period 6 May 2021 to 1 June
2021. No meetings were held during this period
and an additional independent Non-Executive
Director, David Cruickshank, was appointed to
the Committee on 1 June 2021. The Committee
was further strengthened in September 2021 with
the appointment of Dale Murray, who brings
both financial and technology expertise which are
core areas of the Audit and Risk Committee’s
oversight.
In relation to the Remuneration Committee, the
Committee is comprised of two independent
Non-Executive Directors and the Chairman of the
Board, who was independent on appointment,
rather than three independent Non-Executive
Directors. Upon appointment to the Board on 1
March 2022 Suzy Neubert will be joining the
Remuneration and Nomination Committees. This
will mean the composition of the Committee
complies with all provisions of the Code going
forward.
“We believe that having a diverse
workforce leads to better decision
making, increased creativity, innovation
and productivity. Diversity and inclusion
has therefore remained a key area of
focus.”
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Jupiter Fund Management plc | Annual Report and Accounts 2021
Subsidiary governance
As a Group with multiple regulated entities in
various jurisdictions, we have a corporate
governance framework which applies across our
organisation, including with respect to such
regulated subsidiaries. The boards of our
regulated management companies based in the
UK, Luxembourg and Ireland all have independent
Non-Executive Directors appointed, who bring
valuable industry and governance experience, as
well as supporting the broader oversight of our
regulated activities, with a focus on serving our
client’s best interests. These entities leverage our
Group governance framework and receive regular
reporting and recommendations from our
governance committees, to enable them to
discharge their legal and regulatory
responsibilities with respect to Jupiter products
and activities within their remit. We are holding a
strategy day, for the independent Non-Executive
Directors across all of Jupiter’s legal entities and
our key fund Boards in March 2022. This will
enable all of our Non-Executive Directors to
further engage on the Group’s strategy and
priorities whilst receiving updates from across
the business.
Legal and regulatory
The legal and regulatory landscape in which we
operate is becoming increasingly complex. This is
in part as we expand our business internationally
and are subject to new requirements, for instance
our registration with the SEC in the US, but also
due to the pace of regulatory change across all
the jurisdictions in which we operate. Our Legal
and Risk & Compliance teams help us to ensure
that we comply with these evolving requirements
and engage with regulators in an open and
transparent manner.
Stakeholder engagement
Engaging with our stakeholders and understanding
their views about all aspects of our business is
critical to our success. We have had to continue
to adapt our way of engaging due to the global
pandemic and changing restrictions but further
information on how Jupiter engages with
stakeholders can be found on page 58 to page 59
and the Board’s engagement and how stakeholder
interests have been considered in key decisions
on page 81 and page 82.
The Board has engaged with Connections, our
employee forum, to hear directly from our
people on their views of the firm’s culture,
strategy and business operations. We have
completed two employee surveys at the start
and the end of 2021. We were disappointed that a
number of metrics, particularly on engagement,
had decreased between these surveys. The
results of the survey are being discussed with the
Connections forum and management are
implementing action plans to address items raised
in the survey. This is particularly focused on
communication across the organisation, which
has understandably been impacted by the remote
working environment. Progress against these
plans will continue to be a focus of the Board
throughout the year.
Due to the pandemic, we were once again not
able to hold our AGM in person. In order to
provide our shareholders with the opportunity to
hear presentations and ask the Directors
questions before they were required to submit
their proxy votes, we held a shareholder
engagement webinar in advance of the AGM.
Andrew Formica and I, as CEO and Chairman,
gave the presentations which would have been
provided at the AGM and all Directors attended
to answer any shareholder questions. The
webinar was held two weeks before the formal
AGM and details of the shareholder engagement
webinar were contained within the Notice of
AGM and were also available on the Company’s
website. The formal AGM was then held as a
closed meeting with the quorum requirements
being met by the Chairman and Company
Secretary.
CHAIRMAN’S INTRODUCTION TO GOVERNANCE continued
At the 2021 AGM we had one resolution which
received less then 80% approval. Resolution 14,
which provides Directors with the authority to
allot shares in the Company, passed with almost
78% of votes in favour. This result was primarily
driven by our largest single shareholder, who we
have engaged with both pre- and post- the AGM,
and we understand their views regarding
potential dilution of their shareholding. However,
the authority we seek is lower than the maximum
recommended levels contained within the UK
Investment Association’s share capital
management guidelines and prevailing voting
guidelines of leading corporate governance
agencies. The majority of our shareholders are
supportive of the authority sought which is in line
with standard market practice in the UK.
We believe that this authority is important to
provide the Directors with flexibility in the capital
management of the Company and would only
exercise this authority if it were considered in the
best interests of shareholders. We are therefore
seeking approval for the Directors to have the
authority to allot shares in line with previous
years.
We hope to hold an in-person AGM this year, but
we will also arrange for a live audio-cast so
shareholders have the opportunity to listen to
the meeting and ask questions, without being
physically present, should that be their
preference. Due to the continued uncertainty we
ask our shareholders to review our
announcements and Company website, for any
changes to the proposed arrangements.
This will be my first in-person AGM since my
appointment as Chairman and I hope to have the
opportunity to meet with our shareholders and
discuss our business.
Nichola Pease
Chairman
24 February 2022
70
Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
COMPLIANCE STATEMENT
Throughout the accounting year ended 31 December 2021, Jupiter complied with the provisions of the Code, with the exception of provisions 24 and 32
which relate to the composition of key Committees (please see page 69 for further information). Further information on how the Company has applied
the principles of the Code is set out in this Governance section.
Code principle
Page
reference
Board Leadership and Company Purpose
A successful company is led by an effective and entrepreneurial board, whose role is to promote the long-term sustainable
success of the company, generating value for shareholders and contributing to wider society.
72
The board should establish the company’s purpose, values and strategy, and satisfy itself that these and its culture are aligned.
All directors must act with integrity, lead by example and promote the desired culture.
68
The board should ensure that the necessary resources are in place for the company to meet its objectives and measure performance against
them. The board should also establish a framework of prudent and effective controls, which enable risk to be assessed and managed.
77
In order for the company to meet its responsibilities to shareholders and stakeholders, the board should ensure effective engagement with,
and encourage participation from, these parties.
58
81
The board should ensure that workforce policies and practices are consistent with the company’s values and support its long-term sustainable
success. The workforce should be able to raise any matters of concern.
36
57
Division of Responsibilities
The chair leads the board and is responsible for its overall effectiveness in directing the company. They should demonstrate objective
judgement throughout their tenure and promote a culture of openness and debate. In addition, the chair facilitates constructive board
relations and the effective contribution of all non-executive directors, and ensures that directors receive accurate, timely and clear information.
77
The board should include an appropriate combination of executive and non-executive (and, in particular, independent non-executive)
directors, such that no one individual or small group of individuals dominates the board’s decision making. There should be a clear division of
responsibilities between the leadership of the board and the executive leadership of the company’s business.
76
Non-executive directors should have sufficient time to meet their board responsibilities. They should provide constructive challenge,
strategic guidance, offer specialist advice and hold management to account.
89
The board, supported by the company secretary, should ensure that it has the policies, processes, information, time and resources
it needs in order to function effectively and efficiently.
77
Composition, Succession and Evaluation
Appointments to the board should be subject to a formal, rigorous and transparent procedure, and an effective succession plan should be
maintained for board and senior management. Both appointments and succession plans should be based on merit and objective criteria and,
within this context, should promote diversity of gender, social and ethnic backgrounds, cognitive and personal strengths.
86
The board and its committees should have a combination of skills, experience and knowledge. Consideration should be given to the length of
service of the board as a whole and membership regularly refreshed.
86
Annual evaluation of the board should consider its composition, diversity and how effectively members work together to achieve objectives.
Individual evaluation should demonstrate whether each director continues to contribute effectively.
85
Audit, Risk and Internal Control
The board should establish formal and transparent policies and procedures to ensure the independence and effectiveness of internal and
external audit functions and satisfy itself as to the integrity of financial and narrative statements.
91
The board should present a fair, balanced and understandable assessment of the company’s position and prospects. 98
The board should establish procedures to manage risk, oversee the internal control framework, and determine the nature and extent of the
principal risks the company is willing to take in order to achieve its long-term strategic objectives.
60
Remuneration
Remuneration policies and practices should be designed to support strategy and promote long-term sustainable success. Executive remuneration
should be aligned to company purpose and values, and be clearly linked to the successful delivery of the company’s long-term strategy.
102
A formal and transparent procedure for developing policy on executive remuneration and determining director and senior management
remuneration should be established. No director should be involved in deciding their own remuneration outcome.
102
Directors should exercise independent judgement and discretion when authorising remuneration outcomes, taking account of company and
individual performance, and wider circumstances.
102
Jupiter supports the principles of corporate governance as set out in the 2018 version
of the UK Corporate Governance Code (the Code) issued by the Financial Reporting
Council, which can be found on the FRC website at www.frc.org.uk.
71
Jupiter Fund Management plc | Annual Report and Accounts 2021
BOARD OF DIRECTORS
As at 31 December 2021
GOVERNANCE
2. ANDREW FORMICA
Chief Executive Officer
3. WAYNE MEPHAM
Chief Financial Officer
6. CHRIS PARKIN
Non-Executive Director
1
1. NICHOLA PEASE
Non-Executive Chairman
NC
RM
4. DAVID CRUICKSHANK
Independent Non-Executive Director
AR
NC
5. DALE MURRAY
Independent Non-Executive Director
AR
NC
7. KARL STERNBERG
Independent Non-Executive Director
AR
NC
RM
8. POLLY WILLIAMS
Independent Non-Executive Director
AR
NC
9. ROGER YATES
Independent Non-Executive Director
NC
RM
1. Nominated representative of TA Associates
72
Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
AR
AR Member of Audit and Risk Committee
RM
Member of Remuneration Committee
NC
Member of Nomination Committee
Denotes Chair of Committee
1. NICHOLA PEASE
NC
RM
Appointed
Non-Executive Chairman in March 2020
Skills and experience
Nichola has over 35 years’ experience in asset management,
including at Chief Executive level, and the wider financial
sector. With her extensive experience, Nichola brings strong
leadership skills and a deep understanding of investment
management to the Board.
Previous appointments
Nichola’s most recent role was as an independent
Non-Executive Director of Schroders plc from September
2012 to November 2019, where she was also Chairman of the
Remuneration Committee. She was previously the Chief
Executive of J O Hambro Capital Management Ltd from 1998,
until her appointment as Deputy Chairman in 2008. Her
previous experience includes Kleinwort Benson, Rowe
Price-Fleming, Citibank and Smith New Court where she built
the European broking business and subsequently joined the
Board.
Current external appointments
Nichola is currently Chair of the Investment20/20
Apprenticeship Scheme and Jumo Ltd.
2. ANDREW FORMICA
Appointed
Chief Executive Officer in March 2019
Skills and experience
Andrew has over 27 years’ experience in the investment
management industry and is a qualified actuary, both in
Australia and in the UK. He brings strong leadership skills and
has a proven track record of implementing successful
business strategies.
Previous appointments
Before joining Jupiter Andrew was CEO of Henderson Global
Investors, becoming Co-Chief Executive of Janus Henderson
on the merger with Janus Capital in 2017. During his time at
Henderson and its predecessor businesses he held various
roles including equity fund manager and head of equities.
Current external appointments
Andrew is currently a Non-Executive Director of Hammerson
plc and of the Investment Association.
3. WAYNE MEPHAM
Appointed
Chief Financial Officer in September 2019
Skills and experience
Wayne has over 26 years’ experience in the asset
management and across the financial services sector gained in
senior financial roles and as a chartered accountant.
Previous appointments
Wayne began his career at PricewaterhouseCoopers where
he progressed to lead audits in the Insurance and Asset
Management practice. Prior to joining Jupiter, he worked at
Schroders for nine years and was responsible for the Global
Finance function as well as Procurement and Investor
Relations.
Current external appointments
Wayne has no external appointments.
4. DAVID CRUICKSHANK
AR
NC
Appointed
Independent Non-Executive Director in June 2021
Skills and experience
David Cruickshank spent his executive career at Deloitte and
retired from the firm in June 2020. He qualified as a Chartered
Accountant in 1982 and specialised in advising on large
international corporate transactions. He was appointed a
partner in 1988 and led the UK Tax Practice from 1998 until
2006. He was elected Chair of Deloitte’s UK Board in 2007 and
served two terms before being elected Chair of Deloitte’s
Global Board in 2015. During this period David led the Boards
through a period of major regulatory change and business
transformation and has broad experience across different
industry sectors and geographies.
Previous appointments
David is the former Chairman of Deloitte’s UK Board and then
Deloitte’s Global Board and previously served as Co-Chair of
the Partnering Against Corruption Initiative at the World
Economic Forum.
Current external appointments
David is the current Chair of the Social Progress Imperative
Inc and the Education and Employers charity. He is also a
member of the Council of the Institute of Chartered
Accountants of Scotland.
5. DALE MURRAY
AR
NC
Appointed
Independent Non-Executive Director in September 2021
Skills and experience
Dale Murray is a qualified accountant and technology
entrepreneur who co-founded the British mobile telecoms
software business Omega Logic. Following Omega Logic’s sale
to Eposs Ltd, then First Data Corporation, Dale served as CEO
of the enlarged Group until 2005. She then made a number of
investments in the digital sector and was awarded the British
Angel Investor of the Year in 2011.
Previous appointments
Dale was previously a Non-Executive Director at Peter Jones
Foundation, UK Trade & Investment, Sussex Place Ventures
Ltd and the Department for Business, Innovation and Skills.
Current external appointments
Dale currently serves as a Non-Executive Director of Xero
Limited, Lendinvest plc, The Cranemere Group Limited, Rated
People Limited and Lightspeed Commerce Inc.
6. CHRIS PARKIN
Appointed
Non-Executive Director in July 2020
Skills and experience
Chris Parkin has 15 years of experience in the private equity
industry with a primary focus on financial services companies,
particularly in fund management, wealth management and
insurance, as well as on consumer facing business, including
education services, consumer goods and retail. He brings
detailed knowledge of the financial services sector with a
strong client focus and significant experience of business
transformation.
Previous appointments
Before joining TA Associates, Chris was an investment
manager at Lazard Private Equity and prior to that he spent
seven years with Bain & Company in London and New York.
Chris’ previous Non-Executive Directorships include, amongst
others, DNCA Finance, PhysIOL, Internationella Engelska
Skolan and Hana Group. Chris also served on the Board of
Jupiter Fund Management from 2007-2010 and Merian Global
Investors until early 2021.
Current external appointments
Chris is co-head of TA Associates’ EMEA Services Group and is
a Non-Executive Director of Inspired Education Holdings
Limited, Biocomposites, Surfaces Group, Fairstone Group Ltd,
Soderberg and Partners, and Nactarome.
7. KARL STERNBERG
AR
NC
RM
Appointed
Independent Non-Executive Director in July 2016
Skills and experience
Karl brings some 30 years’ international experience in the
investment industry gained through both executive and
non-executive roles.
Previous appointments
Karl was a founding partner of institutional asset manager
Oxford Investment Partners, which was bought by Towers
Watson in 2013. Prior to that, Karl held a number of positions
at Morgan Grenfell/Deutsche Asset Management between
1992 and 2004 including Chief Investment Officer for London,
Australia, Europe and the Asia Pacific. Since 2006 he has
developed his Non-Executive Director career, with a focus on
investment management and the investment trust sector in
particular. From 2010 to 2015 he was a Non-Executive Director
of Friends Life Group plc where he was Chairman of the
Investment Oversight Committee. Karl was Chairman of
JPMorgan Income & Growth Investment Trust plc until
November 2016.
Current external appointments
Karl is Chairman of Monks Investment Trust plc and Clipstone
Industrial Reit plc and a Non-Executive Director of Herald
Investment Trust plc, JPMorgan Elect plc and Howard de
Walden Estates.
8. POLLY WILLIAMS
AR
NC
Appointed
Independent Non-Executive Director in March 2015
Skills and experience
Polly has a wealth of relevant experience, including roles with
particular responsibility for audit and risk oversight, and is a
chartered accountant. Previously, Polly was a partner at
KPMG, with responsibility for the Group Audit of HSBC
Group plc. Polly has significant, recent and relevant financial
experience which is invaluable in her role as Chairman of the
Audit and Risk Committee. She actively engages with senior
management outside of the Board meeting cycle.
Previous appointments
Polly’s previous Non-Executive Directorships include TSB
Banking Group plc, Worldspreads Group plc, APS Financial
Limited, Z Group plc, National Counties Building Society (as
Chairman), Scotiabank Ireland Limited and Daiwa Capital
Markets Europe Limited.
Current external appointments
Polly is a Non-Executive Director of RBC Europe Limited, XP
Power Limited and the Rugby Football Union, where she
Chairs the Audit and Risk Committee. Polly also serves as a
Trustee of the Guide Dogs for the Blind Association.
9. ROGER YATES
NC
RM
Appointed
Senior Independent Director in May 2021
Independent Non-Executive Director in October 2017
Skills and experience
Roger has considerable knowledge of the asset management
business with over 30 years’ experience in the industry having
served as a fund manager, senior executive, Non-Executive
Director and Chairman. Having led two global asset managers,
Roger also brings significant understanding of international
business management to the Board.
Previous appointments
Roger started his career at GT Management in 1981 and
subsequently held positions at Morgan Grenfell and Invesco
as Chief Investment Officer. He was appointed Chief
Executive Officer of Henderson Group plc in 1999 and led the
company for a decade. Most recently Roger was a
Non-Executive Director of IG Group Ltd, Chairman of Electra
Private Equity plc and Chairman of Pioneer Global Asset
Management S.p.A. He was also a Non-Executive Director of
JPMorgan Elect plc from 2008 – 2018.
Current external appointments
Roger is the Senior Independent Director of St James’s Place
plc where he chairs the Remuneration Committee, Senior
Independent Director at Mitie Group plc and Non-Executive
Director of The Biotech Growth Trust plc.
73
Jupiter Fund Management plc | Annual Report and Accounts 2021
EXECUTIVE COMMITTEE
As at 24 February 2021
1. ANDREW FORMICA
Chief Executive Officer and Chairman
of the Executive Committee
Responsible for the strategic development of the Group and
for the management of the overall business.
See page 73 for Andrew’s full biography.
6. VERONICA LAZENBY
Chief Risk Officer
Veronica joined Jupiter in February 2020 and is the Group’s
Chief Risk Officer. Before joining Jupiter she held senior risk
management roles at Schroders, Royal Bank of Scotland,
Barclays and BNY Mellon. She is responsible for the
management of the Group’s risk profile and compliance
function.
2. WAYNE MEPHAM
Chief Financial Officer
Responsible for financial management, capital management,
tax, investor relations, financial regulatory reporting, HR, and
strategy and corporate development.
See page 73 for Wayne’s full biography.
5. TRACEY KINSELLA
HR Director
Tracey joined Jupiter in October 2021 as HR Director.
Previously, Tracey was Head of HR and Internal
Communications at Architas and also held senior HR positions
at AXA UK and Ireland, Amazon and Nokia. Tracey is
responsible for the global HR function at Jupiter, which
includes reward and SMCR.
3. MATTHEW BEESLEY
Chief Investment Officer
Matthew joined Jupiter in January 2022 as Chief Investment
Officer. He was previously Chief Investment Officer at
Artemis and has held senior investment roles at GAM and
Henderson Global Investors. Matthew is responsible for the
oversight of all of Jupiter’s investment teams and key areas
such as stewardship, data science and dealing.
4. KATHARINE DRYER
Deputy Chief Investment Officer
Katharine joined Jupiter in December 2013 as Head of
Investments, Fixed Income and Multi-Asset and was
appointed Deputy CIO in October 2018. Before Jupiter
Katharine worked as a managing director in BlackRock’s Euro
Fixed Income and Multi-Asset Client Solutions teams. Prior to
this, she worked at Morgan Stanley and Deutsche Asset
Management, where she was a fixed income specialist.
74
Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
7. PAULA MOORE
Chief Operating Officer
Paula joined Jupiter in 1997 and has held many senior roles
within the Group. She is the Chief Operating Officer and is
responsible for the Group’s day-to-day operations including
operations, IT and the facilities teams.
8. MINESH PATEL
Head of Strategy and Corporate
Development
Minesh joined Jupiter in July 2019 as the Head of Strategy and
Corporate Development. Before joining Jupiter he was Head
of Corporate Development at Janus Henderson and
previously held roles at Man Group and Merrill Lynch. Minesh
oversees strategic initiatives and corporate development
across the Group.
11. PHIL WAGSTAFF
Global Head of Distribution
Phil joined Jupiter in June 2019 as the Global Head of
Distribution. He was previously Global Head of Distribution at
Janus Henderson and has held senior distribution roles at
Gartmore, New Star and M&G. Phil is responsible for the
distribution of all of Jupiter’s products, which includes
management of the distribution, marketing and
communication teams.
9. JASVEER SINGH
General Counsel
Jasveer joined Jupiter in November 2016 as General Counsel.
Before joining Jupiter he was General Counsel and a member
of the Executive Committee at Man Group. He is responsible
for the legal, governance & secretariat, Luxembourg and Irish
teams.
10. WARREN TONKINSON
Deputy Global Head of Distribution
Warren previously served as the Global Head of Distribution
for Merian Global Investors and joined Jupiter upon the
completion of the acquisition of Merian. He joined as Jupiter’s
Distribution Managing Director and was appointed Deputy
Global Head of Distribution in October 2021. Prior to his role
at Merian, Warren was Managing Director at UBS Global Asset
Management.
75
Jupiter Fund Management plc | Annual Report and Accounts 2021
OUR GOVERNANCE FRAMEWORK
BOARD
Chairman Chief Executive
Officer
Chief Financial
Officer
Senior Independent
Director
Independent Non-
Executive Directors
• Leads the Board, ensuring its
effective discharge of duties
• Supports the CEO in the
execution of duties
• Ensures effective governance
• Engages with stakeholders and
ensures their views are
understood by the Board and
decisions consider their
interests
• Proposes the strategy and
ensures its execution
• Runs the business within the
delegated authorities, risk
management and internal
control frameworks
• Builds and maintains an
effective management team
• All aspects of financial and
capital reporting and the
integrity thereof
• Supports the CEO in the
execution of the strategy
• Responsible for Investor
Relations, HR and
Procurement teams
• Sounding board for the
Chairman
• Leads the Chairman’s
performance appraisal and
succession
• Available to shareholders,
should they have concerns
not resolved through normal
channels
• Contribute to and
constructively challenge
management on the
development and
implementation of the
strategy
• In conjunction with
management, establish the
Board’s risk appetite and
monitor the control
framework
• Constitute the Board’s
governance committees
The Board delegates the day-to-day management of the Group to the CEO, with the exception
of matters which it specifically reserves for its decision. There is an effective governance
framework in place to support the operation of the Group.
The chart below provides an overview of how our Board governance framework has operated during the year, which includes a summary of the matters
reserved for Board decision together with the key roles and responsibilities. The roles of the Chairman, Chief Executive Officer and Senior Independent
Director are clearly defined in writing, approved by the Board and available on our website at www.jupiteram.com.
BOARD GOVERNANCE FRAMEWORK
Schedule of matters reserved
• Establishing the Group’s commercial objectives and strategy
• Setting the Group’s purpose, culture and values
• Approving significant capital projects, expenditure and borrowings
• Overseeing the Group’s operations and management, and maintaining an effective
system of internal controls and risk management
• Setting the annual budget
• Approving the dividend policy and dividend payments
• Overseeing financial reporting, including approving the Annual Report and interim
financial statements
• Ensuring adequate succession planning, including agreeing Board and other senior
appointments and the appointment or removal of the Company Secretary
• Deciding major acquisitions, disposals and investments
The full schedule of matters reserved for the Board can be found on our website at
www.jupiteram.com.
Executive Committee
• Operates under the authority
and direction of the Chief
Executive Officer and
comprises senior management
from key functions
• Responsible for the operational
and financial performance of
the Group
• Formulates strategy and agrees
business plans, budgets, policies
and procedures for the
day-to-day management of the
Group
• The Executive Committee has
delegated certain authorities to
a number of operating
Committees under the Group’s
governance framework
Audit and Risk
Committee
• Board Committee comprises
four independent Non-
Executive Directors
• Responsible for overseeing
financial reporting, risk
management and internal
control framework, compliance
and external and internal audit
• Read how we are delivering our
priorities from page 91
Remuneration
Committee
• Board Committee comprises
two independent Non-
Executive Directors and the
Chairman of the Board, who
was independent on
appointment
• Responsible for overseeing the
remuneration of Executive
Directors, senior management
and Group-wide policies
• Read how we are delivering our
priorities from page 102
Nomination
Committee
• Board Committee comprises all
independent Non-Executive
Directors and is chaired by the
Chairman of the Board
• Recommends changes to the
structure of the Board, oversees
succession planning for the
Board and senior management,
and talent and diversity policies
across Jupiter
• Read how we are delivering our
priorities from page 86
76
Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
BOARD ACTIVITIES
In addition to the five scheduled meetings the
Board held two additional meetings which were
convened to consider certain ESG-related and
product development matters. Polly Williams was
not able to attend one of the ad-hoc meetings
due to prior commitments, but read all papers
and provided input outside of the meeting.
Director Meetings attended
Nichola Pease 7/7
Jonathon Bond 3/3
Edward Bonham Carter 3/3
David Cruickshank 4/4
Andrew Formica 7/7
Wayne Mepham 7/7
Dale Murray
Chris Parkin
3/3
7/7
Karl Sternberg 7/7
Polly Williams 6/7
Roger Yates 7/7
The following pages provide an overview of the Board’s activities during the year and detail the
key items considered by the Board and, where appropriate, the outcomes of these discussions,
together with the link to the relevant strategic priorities, principal risks and impacted
stakeholder groups.
The Board also held a two-day strategy off-site in
June which provided the opportunity for a
deep-dive review on key strategic items, industry
trends and our culture. A Board briefing session is
held in the day or so before a Board meeting and
these sessions are designed to assist with Director
training and knowledge of the business. Further
information can be found within the Director
training and induction section on page 83.
The Chairman has held meetings with just the
Non-Executive Directors, some of which included
the CEO. Individual Non-Executive Directors have
also met with senior members of management on
an individual basis. This engagement has been
supported by the Company’s Non-Executive
Director pairing system, under which each
Non-Executive Director is paired with a member
of the Executive Committee. They hold between
four and six meetings a year and the scheme is
designed to give the Non-Executive Directors
greater understanding of the relevant business
unit and help the Executives to gain a better
understanding of the Board and its objectives and
views. The Senior Independent Director has also
met with other Directors to evaluate the
Chairman’s performance.
At each meeting the Board receive an update
from the CEO, CFO, CIO, Head of Distribution
and COO, which considers the performance of
the relevant business area and any key areas of
focus. The CEO also provides fortnightly updates
to the Board members on developments within
the business and any matters to raise to the
Board’s attention.
Key
Link to core objectives
1
Investment performance
2
Client relationships
3
Investment offering
4
Talent and Culture
5
Operating model
6
Financial resources
Relevant stakeholder group
1
Clients
2
People
3
Shareholders
4
Business partners and
suppliers
5
Society
6
State and regulators
Link to principal risks
1
Strategic Risk
2
Market Risk
Operational Risk
3
People Risk
4
Client and Fiduciary Duty Risk
5
Execution, Processing and Reporting Risk
6
Product Risk
7
Model Risk
8
Data Management Risk
9
Technology and Information Security Risk
10
Outsourcing and Supplier Risk
11
Regulatory Risk
12
Legal Risk
13
Financial Crime Risk
77
Jupiter Fund Management plc | Annual Report and Accounts 2021
Item
Outcomes Link to core objectives and principal risks Stakeholders
Strategy and Business Development
Strategy
development
Agreed the agenda for the 2021 Board two-day offsite, which
focused on the key opportunities for growth and risks facing the
business. Discussed the current strategy in light of the wider market
environment.
ALL
1
1
2
3
6
ESG-related
initiatives
> See page 40 for
further information
Approved participation in the NZAM initiative, UNGC and Good
Work Coalition. Agreed the initial targets for the net zero initiative
and challenged management’s approach to ensuring the Company
and its investments were net zero by 2050.
Reviewed and challenged the Group’s approach to the
implementation of the SFDR, including the classification of funds,
disclosures and governance processes.
Reviewed and discussed the Group’s sustainable fund range and
potential developments thereof and received presentations from
fund managers responsible for our sustainable investing range.
Received updates on the Group’s stewardship activities and the
implementation of the new UK Stewardship Code, including
approving the 2020 Stewardship Report.
Reviewed and challenged the work undertaken in order to prevent
modern slavery within the Group’s operations, supply chain and
investee companies and approved the Group’s modern slavery
statement.
1
3
5
1
3
4
10
11
ALL
Strategic growth
initiatives
Approved additional investments in key growth areas for the
business including sustainability, fixed income and institutional
business, and received regular updates on the implementation
thereof.
1
2
3
4
6
1
1
2
3
4
5
Distribution Received regular reports from the Head of Distribution on sales
activities and flows.
Considered the re-brand of Jupiter and Merian under the refreshed
Jupiter brand identity.
Received presentations from regional distribution functions including
the UK, US, Continental Europe and Asia, and tested plans to enter
the Australian market.
Agreed to establish in-house business development managers to
better support smaller clients.
Undertook various deep-dive reviews including top client reviews
and analysis, institutional sales and team development, redemptions
from funds, the featured fund list which drives greater focus on key
funds, and fund pricing and charges.
2
3
1
4
1
3
4
6
Growth funds Received updates on business plans for funds identified as key to the
Group’s growth plans and ensured suitable resources were deployed
to support the teams.
1
3
6
1
3
4
1
2
3
NZS Capital
business
update
Received an update on the NZS Capital strategic partnership and
reviewed progress against the original business plan.
1
3
5
6
1
4
1
3
Institutional
Global Equity
Reviewed the Group’s global equity strategies, suitability for client
types and potential thematic investing opportunities.
1
2
3
4
6
1
4
1
3
BOARD ACTIVITIES continued
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Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
Item
Outcomes Link to core objectives and principal risks Stakeholders
Performance
Monitored financial
performance and
capital position
Ongoing monitoring of financial performance including revenue,
profit and cost forecasts against budget and KPIs, and considered
performance against market consensus.
Monitored forecast liquidity and regulatory capital surplus to ensure
it remained within the Board’s risk tolerance.
Received updates on the Group’s seed capital portfolio and
performance of associated hedging and forward contracts.
5
6
1
2
1
2
3
6
Investment
performance
Regularly reviewed investment performance across all fund ranges
and investment trusts, and assessed funds against expected
performance outcomes in light of the market environment.
Received presentations from a range of fund managers.
1
3
1
2
4
13
1
3
4
6
Capital and
dividend policy
Considered, challenged and approved a revised capital and dividend
policy which provided further clarity on additional returns of capital
to shareholders and approved that future year-end dividends were
subject to shareholder approval.
Approved the interim and special dividends and recommended the
final dividend to shareholders.
1
3
6
2022 Budget and
five-year financial
plan
Challenged and approved the 2022 budget and five-year financial
plan, having reviewed the underlying assumptions for net flows,
revenue margins, investment performance, costs and various scenario
analysis including consideration of the impact of growth initiatives.
3
4
5
6
1
2
3
4
2
3
Merian integration Oversaw the integration of Merian into the Jupiter Group, including
product changes and the rationalisation of suppliers.
ALL
1
3
4
5
1
2
3
4
6
People & Culture
Culture Assessed and monitored culture through regular updates from the
CEO, Connections Chairman, employee surveys and dedicated
culture and people updates from the HR Director, which included an
update on the structures implemented to support staff during the
pandemic.
ALL
ALL
ALL
Employee
engagement
The Board engaged with the Chair of Connections, the Group’s
employee forum, to discuss employee views and the Non-Executive
Directors also met privately with the Connections Chair.
4
3
2
Diversity and
inclusion
The Board reviewed the plans to improve diversity across the
business and ensure an inclusive culture for our people and other
stakeholders. The Board considered the diversity targets and progress
thereon.
2
4
3
ALL
Covid related Reviewed and agreed the plans for staff to return to the office and
approved the new ongoing hybrid working model. Discussed impacts
to the operating model and the initiatives to support staff during the
pandemic and approved a £1,000 allowance for 2021 to all staff for
home office equipment.
4
3
1
2
4
6
Director
appointments
Approved the appointment of two new Non-Executive Directors. ALL
ALL
ALL
Risk Management
> For further information see the Audit and Risk Committee Report starting on page 91
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Jupiter Fund Management plc | Annual Report and Accounts 2021
Item
Outcomes Link to core objectives and principal risks Stakeholders
Risk Appetite
Statement
Reviewed, challenged and approved the revised Risk Appetite
Statement and associated metrics.
ALL
ALL
ALL
Enterprise Risk
Management
Framework
Reviewed, challenged and approved the revised Enterprise Risk
Management Framework which included a new risk taxonomy further
aligned to the Group’s operations.
ALL
ALL
ALL
Principal and
Emerging Risks
Discussed the principal and emerging risks and reviewed and
approved the risk management disclosures in the annual and interim
reports as recommended by the Audit and Risk Committee.
ALL
ALL
ALL
Assessed
effectiveness of
internal controls
Reviewed the effectiveness of the internal control environment
including consideration of risk incidents, the output from the risk and
control self-assessment, compliance and internal audit findings. There
was specific consideration of the internal control operation in light
of the remote working environment.
5
ALL
1
2
3
4
6
Governance
Investment
oversight
Received an update on the governance processes in place to ensure
appropriate oversight of investment management. This included
consideration of the structure of the Group’s Unlisted Assets
Valuation Committee (UAVC), which oversees the valuation of
unlisted assets held by funds managed by the Group. The Board
decided that an independent Chairman should be appointed to the
UAVC.
1
2
3
4
5
1
4
6
13
1
2
3
6
Board Evaluation
> For further
information please
see page 85
Reviewed and discussed the results from the annual Board evaluation
and agreed action plans.
ALL
1
ALL
Health and Safety Received an update on health and safety across the Group, with a
focus on steps taken to welcome our people back to the office
safely.
4
3
2
Tax Strategy Reviewed and approved the Group’s tax strategy and the publication
thereof.
6
13
ALL
External Reporting
> For further information see the Audit and Risk Committee Report starting on page 91
Annual Report &
interim results
Reviewed and approved the 2020 Annual Report and 2021 interim
results.
1
2
3
5
6
Appointment of
auditors
Resolved to recommend to shareholders the appointment of EY as
the Group’s external auditors with effect from the year ending 31
December 2023, as per the Audit and Risk Committee’s
recommendation.
5
10
11
12
1
2
3
5
6
ICAAP Reviewed and approved the Group’s ICAAP. ALL
3
6
BOARD ACTIVITIES continued
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GOVERNANCE
CONSIDERING STAKEHOLDERS
IN DECISION MAKING
CLIENTS
How does the Board engage?
The Board has primarily delegated
responsibility for client engagement to Senior
Management and our Distribution and Fund
Management teams. At each meeting the
Board receives updates from our Global Head
of Distribution and CIO which includes
information on client engagement and views.
The CEO meets with a variety of clients and
provides updates to the Board on these
engagements. We also receive updates
directly from our clients, who attend and
speak at Board briefings and internal
governance committees and forums, where
appropriate.
PEOPLE
How does the Board engage?
Jupiter has an established employee forum
’Connections’, which is the primary method of
workforce engagement. The Chairman of
Connections meets with the Board, the
Remuneration Committee and separately with
only the Non-Executive Directors present.
Our CEO regularly attends Connections
meetings and the forum also engages directly
with the Executive Committee. During the
year, due to the ongoing challenges presented
by the global pandemic, we undertook two
employee surveys and the Board and
Executive Committee have reviewed and
discussed the results and proposed action
plans to address identified issues.
Section 172 of the Companies Act 2006 requires the directors to act in the way that they consider, in good faith, would be most likely to promote the
success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:
• the likely consequences of any decision in the long term
• the interests of the company’s employees
• the need to foster the company’s business relationships with suppliers, customers and others
• the impact of the company’s operations on the community and the environment
• the desirability of the company maintaining a reputation for high standards of business conduct and the need to act fairly as between members of
the company.
The Company’s section 172 statement of compliance can be found on page 58, together with an overview of our key stakeholders, their key priorities
and how, we as a Company, engage with them.
Details of how the Directors have fulfilled their duties can be found throughout the Strategic and Governance reports on the following pages:
• The likely consequences of any decision in the long term – pages 58 to 59, 77 and 82
• The interests of the company’s employees – pages 36 to 39, 58 to 59, 79 and 81
• The need to foster the company’s business relationships with suppliers, customers and others – pages 30 to 33, 40 to 56 and 58 to 59
• The impact of the company’s operations on the community and the environment – page 40 to 56, 58 to 59 and 77 to 82
• The desirability of the company maintaining a reputation for high standards of business conduct – pages 40 to 57
• The need to act fairly as between members of the company – pages 58 to 59 and 77 to 82
SHAREHOLDERS
How does the Board engage?
Jupiter has a dedicated Investor Relations
department who are responsible for running a
programme of shareholder events. Our CEO
and CFO provide Board representation at the
majority of shareholder meetings. We have
engaged with shareholders to seek their views
on the preferred method of returning capital
to shareholders and it is our intention that
future returns of capital will be through a
share repurchase programme. Our Chairman
engages with major shareholders on
governance matters and the Chairman of the
Committees meet with shareholders when
appropriate or requested. All parties report
back to the Board on any shareholder
engagement. All of the Directors attend our
AGM which has been disrupted over the last
two years by the global pandemic. Rather than
hold in-person meetings, the Board have held
an interactive online shareholder webinar in
the weeks prior to the AGM and before the
voting proxy deadline.
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Jupiter Fund Management plc | Annual Report and Accounts 2021
Growth strategy
The Board approved additional investments in
key areas of the business in order to drive the
Group’s growth agenda.
In reaching this decision the Board considered
the following stakeholder groups:
1
2
3
These investments were a key decision taken
by the Board to promote the success of the
Company for the benefit of our shareholders,
people and wider stakeholder groups. The
decision to invest in organic growth does
reduce the amount of profit available for
distribution to our shareholders in the short
term; however, over the longer term we
believe the investments will deliver far greater
growth and returns for shareholders. We have
focused our investments in areas which are
important to our clients, such as enhancing
our clients’ servicing abilities and ESG matters.
KEY BOARD DECISIONS
BOARD ACTIVITIES continued
Net zero
The Board decided to join the NZAM initiative
and have committed to achieving net zero
emissions by 2050 across all of our
investments and operations. The Board also
reviewed and agreed the proposed initial
targets under the NZAM initiative, further
information on which can be found from page
45.
In reaching this decision the Board considered
the following stakeholder groups:
1
2
3
4
5
6
Environmental matters are an increasingly
material issue for all of our stakeholders, from
our clients who want to invest in a sustainable
way, to our people who want to work for a
company which has a positive impact on the
world. This view is shared by our shareholders,
business partners and regulators.
In making this decision the Board carefully
considered the views of our stakeholders and
all potential implications for this complex
area, including potential impacts to
investment performance, the costs of
implementation for our investee companies
and any reputational risks.
Aligning to net zero is important to all of our
stakeholders. The Board considers that this
will help mitigate climate related risks within
our clients’ portfolios, will help to attract and
retain talented people and aligns with the
expectations of our shareholders, business
partners, society and our regulators.
Return to office
The Board approved and oversaw the return
to the office and the transition to a hybrid
working model.
In reaching this decision the Board considered
the following stakeholder groups:
2
5
6
The Board primarily considered the views of
our employees and the need to ensure their
safety and well-being. We considered the
impact to society, including the need to
restrict the spread of Covid and the impact
on local businesses from people working at
home. We ensured our plans were aligned to
government guidance and adaptable should
such guidance change. We implemented
rigorous Covid-19 safety measures across our
offices and enhanced our working
environment to provide a collaborative space
for employees to reconnect.
How are stakeholder interests
considered?
We believe that, in order to be managed and
considered effectively, stakeholder interests
need to be embedded across all levels of the
organisation. This means that decisions taken
below Board level also consider the interests of
our stakeholders and help to ensure the
appropriate escalation of stakeholder
considerations through the Group’s governance
framework. Our culture, values, governance
framework, code of conduct and training all help
to support this.
At a Board level, the Board considers and
discusses information from across the Group to
understand the impact of its decisions.
This includes regular reporting on the Group’s
performance, key risks and legal and regulatory
compliance. Where decisions are taken, the
impacts to different stakeholders are clearly
identified within Board papers and discussed by
the Board.
Stakeholders can have different and sometimes
competing interests, priorities and views, and
these need to be balanced with each other and
within the wider duty of the Board to promote
the long-term sustainable success of the
Company. Not all decisions can deliver the
desired outcomes for all stakeholders.
We have included information on some of the
key decisions taken by the Board during the year,
and how stakeholder interests were considered.
Relevant stakeholder Group
1
Clients
2
People
3
Shareholders
4
Business partners and suppliers
5
Society
6
State and regulators
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Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
BOARD EFFECTIVENESS
INDUCTION, TRAINING AND PROCESS
Q&A with Dale Murray, Non-
Executive Director
See induction summary overleaf for an
overview of the key meetings held as part of
the induction programme.
What were the key components of your
induction?
I met with members of the Board, Executive
Committee and their teams as well as key
third parties. It was really interesting to meet
people and develop a greater understanding
of their teams, how they support Jupiter’s
strategy and their views of the business,
industry and markets. Very early in my tenure,
I was invited to join a Board dinner with the
Senior Leadership Group and it was fantastic
to meet with a wider range of senior
management.
There was very useful pre-reading for each
meeting, which helped to ensure meetings
were focused on key areas and resulted in
richer discussions and more focused
questions.
How did the induction prepare you to
discharge your duties?
In order to effectively discharge your duties
you need a thorough understanding of the
whole business and the induction programme
has helped deliver this. This was particularly
valuable to me, given my previous experience
is outside asset management. I learnt about
our investment strategies, our clients and
product distribution, and how this is enabled
by our operations and overseen within our
governance and control frameworks. One of
the biggest benefits was starting to develop
relationships with people across the
organisation, which is critical for a Non-
Executive Director.
Did you develop any insights into
Jupiter’s culture during your induction?
Yes, definitely, and I think this is one of the
most valuable aspects of the induction.
Throughout the process I was struck by how
passionate people are about delivering for our
clients, how generous people were with their
time, and their very open and transparent
approach. It really provided me with an
opportunity to see Jupiter’s cultural pillars in
action. From my conversations with senior
management, it was clear to see the focus on
our clients, on our people and the desire to
innovate for the benefit of all of Jupiter’s
stakeholders.
Most of the induction meetings could be
organised in Jupiter’s head office in London,
where fortunately the majority of staff are
based. Whilst we all adjusted to virtual
meetings, you can better understand a
company’s culture by meeting people in
person and walking round the offices, so I was
grateful to be able to do this.
Induction
A tailored induction programme is provided to all
new Non-Executive Directors and is designed to
provide a thorough understanding of the Group’s
strategy, business, operations, key stakeholders,
the governance structure and the regulatory
environment. During the year, two Board
induction programmes were run for David
Cruickshank and Dale Murray. A Q&A session with
Dale Murray, who undertook our most recent
induction provides an insight into her induction
experience.
Under the induction programme each Director
meets with members of the Board and senior
management, to gain an understanding of their
business areas and professional advisors, and has
the opportunity to meet key stakeholders. Due
to the nature of the business, specific site visits
are not necessary and all meetings are undertaken
at the Group’s headquarters in London.
In addition, each Director is provided with key
documents including the strategy, business plans
and budgets, business performance reports, team
overviews, information on the corporate
structure and governance framework, key policies
and governance documents, and is given access
to previous Board and Committee papers and
minutes.
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Jupiter Fund Management plc | Annual Report and Accounts 2021
Training
Last year we introduced a Board briefing session
which is held prior to each Board meeting. These
sessions are designed to provide ongoing training
and education to the directors. The Board
briefing is structured so that each briefing
includes three sessions, which are a mixture of
internal and external presenters. Subjects are
organised in the context of the items to be
considered at the Board meeting. For example,
when the Board discussed the Group’s sustainable
fund range, the briefing session included a
briefing from external experts on ESG industry
trends and competitor analysis, and a briefing
from our Head of Sustainable Investing on the
fund range. During 2021 the briefing sessions
included subjects on:
• Industry trends
• The competitive landscape
• The value assessment process
• Investor Relations and sessions led by our
brokers
• Presentations from our fund managers on their
funds and market developments
• NZAM
• Regulatory changes
• The UK retail market
Directors regularly attend external training and
update programmes and the Board is able to
obtain independent advice, at the Company’s
expense, where this is necessary to discharge
their duties effectively.
Induction summary
Meeting Summary
Board members, including the Chairman, SID
and Chairman of the Audit and Risk Committee
Recent Board and Committee activities, key priorities, Board and Executive dynamics.
Executive Directors CEO and CFO to discuss Jupiter’s strategy, performance, forecasts, stakeholders, recent developments and current priorities within the business.
Chief Investment Officer Jupiter’s investment strategies, performance, approach to ESG and control framework. Introduction to central teams within the CIO’s office
including Data Science and Stewardship teams.
Chief Operating Officer Overview of the teams within the department, how they support the business and recent initiatives and key priorities going forward.
Chief Risk Officer Group’s risk appetite statement, enterprise risk management framework, internal control environment, recent risk and compliance incidents
and overview of team.
Global Head of Distribution Overview of the Distribution team, our clients, distribution strategy and current priorities.
General Counsel & Company Secretary Overview of respective teams, corporate structure, governance framework and Board processes.
Head of Strategy & Corporate Development Details of recent strategic initiatives and key priorities going forward.
HR Director Initiatives to support our people, increase diversity, employee engagement and key challenges and priorities.
Audit Met with the Head of Internal Audit and the External Audit Lead Partner to discuss audit plans, recent findings and management actions and
views of Jupiter more generally.
Board process
The Board all have access to the Company
Secretary who advises on governance matters,
board policies and processes and helps to ensure
the timely flow of information.
The Board have a rolling agenda in place which
maps key topics for the next 12 months. This is
developed by the Chairman, CEO and Company
Secretary with input from the Board and
Executive Committee. Key items for the
Company’s financial year, Board evaluation
priorities, matters arising and key strategic project
updates are captured within the rolling agenda. It
is then updated throughout the year to ensure
consideration of new items.
The Chairman, CEO and Company Secretary
agree the final agenda for each meeting and
papers are distributed one week before the
meeting.
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Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
BOARD EVALUATION
In line with the provisions of the Code the Board undertakes an annual evaluation every year and every third year this is facilitated by an external
evaluator. The 2020 Board evaluation was facilitated externally by Clare Chalmers and therefore this year’s Board evaluation was undertaken internally.
The diagram below provides details of the process followed for the 2021 evaluation.
Design
The Company Secretary prepared annual evaluation questionnaires for the Board, its Committees and individual directors, in consultation with
relevant stakeholders. The questionnaires were developed in line with the FRC’s guidance on Board effectiveness and also asked specific questions
on activities undertaken during the year, actions arising from previous evaluations and areas of suggested improvement or focus.
Design Approval
The Nomination Committee reviewed and agreed the final questionnaires and process for completion.
Responses
Questionnaires were circulated and completed by the Directors.
Review
Responses, comments and suggestions were collated, on an unattributed basis, by the Company Secretary. These were then discussed
with the Chairman who provided feedback and final reports were drafted and submitted to the Board and each Committee.
1-2-1 meetings
The Chairman met with Directors individually to discuss the evaluation and their individual contribution and performance. The SID met with the
Chairman to discuss her performance.
Reporting
Reports on the outcome of the Board and Committees evaluations were discussed at the respective Board and Committee meetings in December.
Areas of improvement and focus were agreed and approved.
An update on the actions arising from the 2020 Board evaluation can be found below, together with an overview of the outcomes from the 2021
evaluation.
2020 priorities 2021 status
Focus on the Group’s ESG offerings to clients and the
framework for managing ESG risks.
This has been a key area for the Board during the year, with several Board sessions on ESG matters, and a number of
Directors noted the progress on this key issue during the year.
Continue to monitor culture and ensure it remains embedded
across the organisation; drive improvements to the appraisal
process to reflect appropriate performance management.
The firm’s culture was a deep-dive topic at the Board off-site and has been monitored closely by the Board
throughout the year. Board responses highlighted the amount of change within the organisation and the remote
working environment which had impacted Jupiter’s culture.
Improvements to the appraisal process would also be facilitated through the new Finance and HR system which is due
to be introduced in 2022.
Give more focus to long-term strategic
challenges and opportunities.
The Board have focused on this in much greater depth throughout the year with an increasing focus on strategic
challenges and opportunities, which was the primary focus of the Board off-site.
The 2021 evaluation highlighted the good progress made in ensuring an appropriate balance between immediate
business matters and long-term strategy.
Review the operation of the current process for employee
engagement now that it has been implemented for two years,
especially in light of the remote working environment.
The Chairman discussed this with the Connections Chairman who felt that, given the level of change in the
organisation and in the Connections membership, together with the remote working environment, this should be
undertaken in 2022. This will therefore be carried over as an action item into 2022.
Non-Executive Directors and Executive management should
instigate more one-to-one and informal sessions to continue to
build relationships, especially while working remotely.
Non-Executive Directors and Executive Committee members have held more informal meetings and calls during the
last year, which has helped to build effective relationships, especially between new members.
In addition, the Non-Executive Director and Executive Committee pairing arrangements have been in place throughout
2021 and will continue into 2022.
Continue to enhance Board papers and make greater use of KPIs
to facilitate reporting and accountability. Streamline the paper
preparation process.
The 2021 Board evaluation demonstrated that Board papers had continued to be enhanced, with clearer and more
concise papers. In addition, the Board paper process had been streamlined with greater responsibility within the
relevant teams.
2021 evaluation conclusions
The 2021 evaluation demonstrated that the Board was working effectively
and that:
• There was an open and transparent culture with rigorous debate and
challenge.
• There is an appropriate split between strategic, performance, and
governance matters with a well-balanced and thought-out agenda.
• The Board felt very well informed on all aspects of the Group’s
performance with the CEO’s regular updates being particularly
welcomed.
• There was a good understanding of stakeholder views and
considerations of stakeholder interests in decision making.
• Board meetings were operating well and the transition to and from
virtual meetings had been well managed.
• The induction programme was thorough and well organised
(further details are set out on page 83).
The following items were identified for further action during 2022:
• Ensure rolling agendas have sufficient flexibility and that the objective
and required outcome of the agenda item is clear.
• Update fund manager presentations to include further information
on the fund’s business plan and required resources.
• Improve data being sent to the Board on peer and industry flows and
risk management.
• Ensure an appropriate delineation between Board briefings and
meetings.
• Increase the amount of external expertise brought into Board briefings
and meetings.
• Review process for employee engagement.
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Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
NOMINATION COMMITTEE REPORT
COMMITTEE MEMBERS AND REGULAR ATTENDEES
During the year, the Committee held six meetings, three of these were scheduled meetings and
three further meetings were convened in order to consider matters relating to Board
appointments.
Meetings Meetings attended
Nichola Pease (Chair) 6/6
Jonathon Bond
1
4/4
David Cruickshank
2
2/2
Dale Murray
3
1/1
Karl Sternberg 6/6
Polly Williams 5/6
Roger Yates 6/6
1. Jonathon Bond stepped down from the Board and Committee on 6 May 2021
2. David Cruickshank was appointed to the Board and Committee on 1 June 2021
3. Dale Murray was appointed to the Board and Committee on 1 September 2021
All of the independent Non-Executive Directors are members of the Nomination Committee
and the Chairman of the Board also chairs the Nomination Committee, except where the
Chairman’s succession is being considered. The CEO and the HR Director are invited to attend
Committee meetings where appropriate and to facilitate informed debate.
Polly Williams was unable to attend one meeting of the Nomination Committee in December.
Polly reviewed all of the papers and provided input outside of the formal meeting.
COMMITTEE’S KEY RESPONSIBILITIES
• Keep the composition of the Board and its
Committees under review to ensure a correct
balance of skills, knowledge, experience and
diversity is in place.
• Lead the search and selection process for new
Board appointments, including identifying the
skills and experience required.
• Oversee succession planning for Directors and
Senior Executives.
• Review the Company’s policies and practices
for talent management, development and
diversity.
• Consider each Director’s performance and
continuing contribution, including the review
of their external time commitments and, when
appropriate, recommending their re-election
to shareholders.
• Consider and, if appropriate, approve potential
additional external appointments and conflicts
of interest.
A full copy of the Committee’s terms of
reference, which are reviewed by the Committee
and approved by the Board on an annual basis,
can be found at www.jupiteram.com
Nichola Pease
Chairman
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Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
Dear Stakeholder
It has been another busy year for the Committee,
with the key focus being the continued
succession management for both the Board
and the Executive Committee.
Board changes
We were delighted to welcome David Cruickshank
and Dale Murray to the Board in June and
September respectively. Our new Directors bring
financial, technological and ESG-related experience
and entrepreneurial skills to the Board, which
were key attributes identified by the Committee
at the start of the recruitment processes.
Towards the end of the year we commenced a
further search for an independent Non-Executive
Director, as part of our succession planning for
Polly Williams, who has served on the Board for
seven years. We were pleased to conclude the
search process in early 2022 and are delighted
that Suzy Neubert will be joining the Board on 1
March 2022 as an independent Non-Executive
Director.
Further details of the search and recruitment
process for these appointments can be found
on page 90.
The Committee has also kept under review
the composition of the Board’s key committees
and has recommended a number of changes
in light of the Board changes during the year.
The Committee recommended the appointment
of David Cruickshank and Dale Murray, both of
whom are qualified accountants, to the Audit
and Risk Committee. In addition to their financial
experience, David brings a detailed understanding
of ESG-related risks and Dale of technology, both
of which are key areas of focus for the Audit and
Risk Committee. Both Dale and David have also
joined the Nomination Committee.
Suzy Neubert will join the Nomination and
Remuneration Committees upon her appointment.
Suzy has extensive experience in the asset
management industry, having been an analyst
before moving into sales and marketing roles at
Merrill Lynch and most recently as Global Head of
Sales & Marketing at J O Hambro Capital
Management, a position she held until 2020.
Senior management
In addition to the formal meeting schedule, the
Non-Executive Directors met with the CEO on a
number of occasions to discuss changes to the
composition of the Executive Committee and
Board diversity
Policy Statement
A culture which is inclusive and supports
diversity is essential to the long-term success
of our business and better enables us to
respond to our stakeholder needs. We
understand that a diverse Board brings a
broad range of perspectives, insights and
challenge which supports sound decision
making. The Board sets the tone for inclusion
and diversity across the business and we
believe in having a diverse leadership team
and an open and inclusive culture.
We believe a truly diverse Board will include
and make good use of differences in the skills,
experience, background, race, gender,
disability, sexuality and other distinctions
between Directors. These differences will
be considered in determining the optimum
composition of the Board and when possible
should be balanced appropriately. All Board
appointments are made on merit, in the
context of the skills, experience,
independence and knowledge which the
Board as a whole requires to be effective.
Implementation
In reviewing Board composition, the
Nomination Committee will consider the
benefits of all aspects of diversity in order
to enable the Board to discharge its duties
and responsibilities effectively.
In identifying suitable candidates for
appointment to the Board, the Committee
will consider candidates on merit against
objective criteria and with due regard for
the benefits of diversity on the Board.
As part of the annual performance evaluation
of the effectiveness of the Board, Board
Committees and individual Directors, the
Board will consider the balance of skills,
experience and independence and the
diversity representation of the Board,
including gender, how the Board works
together as a unit, and other factors relevant
to its effectiveness.
“At Jupiter we pride ourselves on having an inclusive culture
and have always actively encouraged independent thinking
by our people.”
members of the Committee and wider Board met
with candidates as appropriate. Following these
changes, updating succession planning for senior
management has been identified as a key priority
for the Committee in 2022.
We have continued to develop the depth of
talent across the organisation and particularly
below the Executive Committee. In 2020 we
established the Senior Leadership Group,
which consists of our senior leaders below
the Executive Committee, and the first Senior
Leadership Conference was held in 2021. We have
also refreshed our Senior Leadership Programme
and these initiatives are aimed at ensuring a
strong pipeline of talent across the organisation.
Diversity and inclusion
We have continued to focus on diversity and
inclusion and the Board and Committee have
overseen the initiatives to improve diversity
across the organisation. Further information on
this can be found on pages 34, 35 and 39. At
Jupiter we pride ourselves on having an inclusive
culture and have always actively encouraged
independent thinking by our people. We believe
diversity encompasses all elements of cultural
differences, in the belief this leads to more
innovation and better decision making. The
Board’s diversity policy can be found within the
orange box.
Following the appointment of Dale Murray,
33% of the Board is comprised of women, which
is in accordance with our Board diversity target
and the recommendations of the Hampton-
Alexander Review. Following the appointment
of Suzy Neubert, the Board’s gender diversity
will remain at 33%, as Polly Williams will retire
from the Board, and 11% of the Board will be
from an ethnic minority.
This report provides an overview of the current
Board composition and provides insights into the
work of the Committee during the year, together
with a summary of the Committee’s evaluation.
Nichola Pease
Chairman of the Nomination Committee
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NOMINATION COMMITTEE REPORT continued
Executive Committee composition as at 31 December 2021
Gender Ethnicity
White
Asian
9
2
Female
Male
4
7
Risk
Management
Asset
Management
CEO/Chair
Experience
Accounting/
auditing
Technology
9
7
6
4
1
Chris Parkin
Dale Murray
Nichola Pease
Karl Sternberg
Polly Williams
Roger Yates
David Cruickshank
0.3
0.5
1.5
1.8
4.8
5.5
6.8
Chris Parkin
Dale Murray
Nichola Pease
Karl Sternberg
Polly Williams
Roger Yates
David Cruickshank
0.3
0.5
1.5
1.8
4.8
5.5
6.8
BOARD COMPOSITION AS AT 31 DECEMBER 2021
Independent Non-Executive Directors
Non-Executive Directors
Executive Directors
Chairman
5
2
1
1
White
9
Female
Male
3
6
Independence EthnicityGender
Board experience Chair and Non-Executive tenure
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GOVERNANCE
Key activities during the year
• Reviewed the Board skills, experience and
knowledge, and assessed the composition
of the Board and its Committees.
• Led a recruitment process for two additional
Non-Executive Directors and recommended
to the Board the appointment of David
Cruickshank and Dale Murray as Directors
and members of the Nomination and Audit
and Risk Committees.
• Reviewed the performance, contribution and
independence of Polly Williams who had
completed six years on the Board.
• Assessed the contribution, independence and
performance of Directors and recommended
to shareholders their election or re-election
to the Board.
• Engaged with the CEO on proposed changes to
the Executive Committee and succession plans.
• Oversaw the annual Board evaluation process.
• Agreed the operation of the Non-Executive
Director and Executive Committee pairing
scheme for 2022.
• Commenced a further Non-Executive Director
search which concluded in early 2022, with the
recommendation to appoint Suzy Neubert as
an independent Non-Executive Director and
member of the Remuneration and Nomination
Committees.
Board and committee composition
The Committee reviewed the composition of the
Board and its Committees during the year, taking
into account all relevant best practice and the
views of shareholders, together with the skills
and experience of Board members. It was agreed
that the size, composition and skills of the Board
was appropriate. The Committee recommended
the appointment of David Cruickshank and Dale
Murray to the Audit and Risk Committee. David
and Dale are both qualified accountants and
David also brings ESG experience and Dale
technology expertise which will be highly
valuable to the Audit and Risk Committee.
Whilst the composition of the Remuneration
Committee was not fully compliant with the
Code throughout the year, it was agreed an
additional Non-Executive Director be appointed
as part of the Board’s further succession planning.
The Committee therefore recommended
the appointment of Suzy Neubert to the
Remuneration Committee with effect from
1 March 2022.
Director re-election
In line with governance requirements and the
Company’s Articles of Association, all Directors
stand for annual re-election at the Company’s
AGM. Each Director’s performance, including the
results of the annual Board evaluation, and
independence is considered by the Committee,
who recommend to the Board their re-election.
In addition, a more detailed review of each
Directors’ performance, contribution and
independence is undertaken when they are
considered for re-appointment after serving
three and six-year terms.
Directors’ external commitments
A schedule of Directors’ external appointments,
which includes details of the time commitments
to those roles, is reviewed by the Committee
to ensure all Directors can commit enough time
to their duties. This includes consideration
of the need for Directors to have sufficient
capacity to be able to address non-standard
business situations arising in different roles at
the same time, which could increase the time
requirements of the Director. Any significant
new appointments are required to be approved
by the Committee. The Committee is satisfied
that all Directors have sufficient time to dedicate
to their duties and have demonstrated this
through their attendance record, responsiveness
to Jupiter business and additional time dedicated
to Jupiter outside the formal Board meeting
structure.
Conflicts of interest
The Company’s Articles of Association permit the
Board to consider and authorise situations where
a Director has an actual or potential conflict of
interest in relation to the Group. The Board has
a formal system to record potential conflicts and,
if appropriate, to authorise them. Conflicts of
interest are included as a standing agenda
item at each Board and Committee meeting.
When authorising conflicts or potential conflicts
of interest, the Director concerned may not take
part in the decision making.
Board and committee evaluation
Details of the Board and Committee evaluation process can be found on page 85. The table below provides an update on the priorities identified
in the Committee’s 2020 evaluation and also a summary of the conclusions from the 2021 evaluation.
2020 priorities 2021 status
Continue to evolve the strategic approach to
Executive succession planning, talent and
development.
There have been a number of changes to the Executive Committee during the year which has
impacted succession planning for senior management. There has been increasing focus on talent and
development, particularly at the level below the Executive Committee. This has included the inaugural
Senior Leadership Group conference and the development of a refreshed Senior Leadership
Programme.
The Board’s strength of experience in the asset
management sector was highlighted and focus
should be given to increasing the breadth of
backgrounds in future recruitment searches.
The Committee recommended the appointment of two additional Non-Executive Directors during
the year, both of which had experience outside the asset management sector (for further information
please see page 90).
Consider the frequency of Nomination
Committee meetings and ensure appropriate
balance of substantive discussion and
governance.
The Committee previously held four scheduled meetings per year and, following last years’ evaluation,
a review of the key items considered at each meeting was undertaken. It was agreed that this process
could be streamlined and that the frequency of Committee meetings be reduced to three scheduled
meetings per year. Additional ad-hoc meetings to consider recruitment matters would be scheduled
as and when required.
2021 evaluation conclusions
The evaluation process demonstrated that the Committee was operating effectively and that recent Board and Executive Committee changes had
been very well managed. The evaluation did highlight the amount of change at Board and Executive Committee level and, whilst the changes and their
implementation were viewed positively, it was noted that effective relationships and dynamics needed to be built with new members. The Committee
identified a number of priorities for 2022:
• Succession planning at all levels and particular consideration to be given to developing a strong diverse pipeline of talent below the refreshed
Executive Committee.
• Keep under review Board and Executive Committee dynamics given the level of change across the organisation.
• Initiatives to improve diversity and inclusion across all levels of the organisation and industry.
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NOMINATION COMMITTEE REPORT continued
The Committee considered the composition and skillset of the Board and identified
the skills and considerations for each role, which are summarised below.
For each appointment Board diversity and dynamics were key considerations.
New Director appointments
The Committee has overseen the recruitment process for three additional Non-Executive Directors since the Committee’s last report to
shareholders. An overview of the processes followed and key considerations for each appointment is detailed below:
Role 2
• Technology and cyber experience
• Experience of a disrupted sector
• Experience outside asset management
• ESG experience
• Entrepreneurial or innovative approach
Appointed RR as executive
search firm
Role 1
• Board or Committee
Chairmanship experience
• Qualified accountant and
financial experience
• Understanding of risk management
• ESG experience
Appointed Russell Reynolds (RR)
as executive search firm
Role 2
Dale Murray
as an independent Non-Executive
Director and member of the
Audit and Risk and
Nomination Committees.
Role 1
David Cruickshank
as an independent Non-Executive
Director and member of
the Audit and Risk and
Nomination Committees.
Role 3
• Sales, distribution or marketing
background
• Client engagement
• Experience in an intermediated business
• Current or recent executive
management experience
Appointed Heidrick & Struggles (HS)
as executive search firm
Role 3
Suzy Neubert
as an independent Non-Executive
Director and member of
the Remuneration and
Nomination Committees.
With the exception of recruitment, neither RR or HS has any further connection with the Company or any individual director.
For each recruitment process a role specification was prepared by the respective search firms using the above-mentioned criteria.
A long-list of candidates was prepared and reviewed by the Committee following which a short-list was developed incorporating the Committee’s views.
For each role a sub-committee of the Nomination Committee was established, which comprised the Chairman and two
other Non-Executive Directors, who interviewed the short-listed candidates. The final candidates then met with other Committee and Board members.
The Committee met to discuss feedback and review references obtained on the final candidates. The Committee recommended, and the Board approved
the appointments as detailed below, which were then announced to the market.
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GOVERNANCE
COMMITTEE MEMBERS AND REGULAR ATTENDEES
Members Meetings attended
Polly Williams (Chair) 7/7
Jonathon Bond
1
2/2
David Cruickshank
2
3/3
Dale Murray
3
2/2
Karl Sternberg 7/7
1. Jonathon Bond stepped down from the Audit and Risk Committee on 6 May 2021
2. David Cruickshank was appointed to the Audit and Risk Committee on 1 June 2021
3. Dale Murray was appointed to the Audit and Risk Committee on 1 September 2021
The Committee is comprised solely of independent Non-Executive Directors in accordance
with the UK Corporate Governance Code. As disclosed on page 69, the Committee’s
membership was below the minimum requirement for a very brief period, during which no
meetings were held. The Committee as a whole is considered to have the competence relevant
to the asset management sector and Polly Williams and David Cruickshank, both of whom are
qualified accountants, are considered to have recent and relevant financial experience. Karl
Sternberg is also a member of the Remuneration Committee, which helps to ensure the
identification of issues relevant to both Committees.
During the year, the Committee held seven meetings; five of these were scheduled and held
at key times in the audit and financial reporting schedule. Two other meetings were specifically
arranged to review and challenge changes to the Group’s Risk Appetite Statement and
Enterprise Risk Management Framework, and to receive, consider and discuss presentations
from firms participating in the external audit tender. All members had 100% attendance at
meetings. The Committee also met privately with each of the External Auditor, Internal Audit,
the Chief Financial Officer and the Chief Risk Officer.
AUDIT AND RISK
COMMITTEE REPORT
Polly Williams
Chair of the Audit
and Risk Committee
COMMITTEE’S KEY RESPONSIBILITIES
• Overseeing the Group’s financial reporting
processes, including reviewing significant
financial reporting issues, judgements,
statements and announcements concerning
its financial performance.
• Assessing the material risks which could
impact the Group’s business model,
future performance, liquidity and solvency.
• Reviewing and monitoring the effectiveness
and adequacy of the risk management
processes.
• Reviewing the Group’s internal controls and
risk management systems on an ongoing basis
including the adequacy and effectiveness of
the framework used to monitor the Group’s
significant outsourced relationships.
• Reviewing the Group’s whistleblowing
arrangements and ensuring the proportionate
and independent investigation of any matters
reported.
• Overseeing the appointment, performance,
remuneration and independence of the
External Auditors, including the provision
of non-audit services to the Group.
• Reviewing and approving the appointment
of the Group’s Head of Internal Audit
and oversight of the Group’s Internal
Audit function.
• Oversight of regulatory and compliance
matters across the Group.
A full copy of the Committee’s terms of
reference, which are reviewed by the Committee
and approved by the Board on an annual basis,
can be found at www.jupiteram.com.
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“ The Committee provides independent oversight and challenge
to ensure the integrity of financial reporting and the
effectiveness of the Group’s risk management processes and
internal control framework, in order to protect stakeholder
interests and support the Group’s strategy.”
Dear Stakeholder
As Chairman of the Audit and Risk Committee, I
am pleased to present my report on the activities
of the Committee throughout 2021, which will be
my last report to our stakeholders, before I step
down in May. It has been a privilege to lead the
Committee, especially through a period of such
change across Jupiter and I would like to thank
everyone who has supported me through my
tenure.
It has been a very busy year for the Committee.
As the events and challenging circumstances
experienced in 2020 continued into 2021, the
Committee continued to focus on risks arising
from the global pandemic and any resultant
changes to the Group’s operations and internal
control framework. In addition, there has been
an increased focus on sustainability risks and how
we manage and mitigate these.
A key priority for the Committee has been the
tender process for the external audit services,
which has been overseen by the Committee and
was conducted in accordance with the FRC’s Best
Practice Guide to Audit Tendering. Further details
of the process undertaken can be found on page
99. The Board have agreed the Committee’s
recommendation to appoint EY as the Group’s
External Auditors, subject to shareholder approval
at the 2023 AGM. I would like to take the
opportunity to thank all those firms who
participated in the audit tender process and
to all those across Jupiter, particularly our Finance
and Procurement teams, who contributed to the
process. Your hard work ensured a very thorough
and well organised audit tender.
As detailed within my report last year,
the Committee has overseen the transition
to a co-sourced Internal Audit model.
A comprehensive tender process for the
co-sourced provider was undertaken and the
Committee approved the appointment of BDO
LLP in this role. Our Head of Internal Audit has
built out an internal team, which is supported by
BDO LLP, and the new operating model is fully
implemented. I would like to thank our previous
internal audit partner and team at EY for their
support, and also take the opportunity to
welcome our new internal audit colleagues and
partner. Further information on the work of our
internal audit function can be found on page 100.
At a dedicated meeting in June, the Committee
reviewed and provided input on enhancements
to the Group’s Risk Appetite Statement and
Enterprise Risk Management Framework. There
have been several changes to enhance our
processes in line with emerging best practice,
regulatory requirements and to further support
our evolving business. The Risk and Compliance
team have really driven the enhancements, with
guidance and oversight from the Group’s Risk
and Finance Committee and this Committee. I
would like to thank them all for their efforts.
We have continued to oversee the integrity of
the Group’s financial reporting and challenged
our external audit firm to ensure that their audit
procedures and processes remain robust,
especially where any elements of the audit were
conducted remotely.
We keep the Group’s financial position and
levels of capital and liquidity under review, to
ensure that the Group has sufficient resources.
The Committee reviews and challenges all
elements of the Group’s ICAAP to ensure the
Group holds appropriate levels of regulatory
capital. We have prepared for the transition to
the new Internal Capital Adequacy and Risk
Assessment (ICARA) which will replace the ICAAP
in 2022.
An enhanced supplier management framework
was reviewed and approved by the Committee,
which has been developed by our Procurement
team. This has enhanced our management and
oversight of third-party suppliers and provides
us with additional assurance on the operational
resilience of our key suppliers. The team are
working to transition suppliers to the new
framework, starting with our most critical
suppliers, and the Committee will be updated
on progress during 2022.
The threat of cyber security breaches has
only accelerated throughout the pandemic.
The Committee assessed the Group’s
information security controls and measures
in place to help protect us from an attack,
which included an analysis of recent cyber
security incidents. We have also considered our
resilience in the event of a successful attack and
how we would restore our systems and business
operations as quickly as possible. Tailored
training sessions on phishing awareness were
rolled out to all staff across the Group to help
develop a positive cyber security culture,
increase staff awareness and prevent cyber
attacks. We will continue to focus on this key
area and will be further testing our operational
resilience, in the event of a cyber-attack,
through incident response exercises in 2022.
There have been a number of changes to the
composition of the Committee during the year.
Jonathon Bond stepped down from the Board
and Committee following the conclusion of the
AGM in 2021 and I would like to thank Jonathon
for his contribution to the Committee during his
seven-year tenure, especially for his diligent and
considered approach, and his commitment to
sustainability.
I am delighted to welcome David Cruickshank
and Dale Murray who were appointed to the
Committee on 1 June 2021 and 1 September 2021
respectively. Both are qualified chartered
accountants and have strengthened the financial
expertise on the Committee. David was the
former Chairman of Deloitte and brings extensive
leadership skills and a keen focus on sustainability.
Dale is a technology entrepreneur who brings
technology expertise and experience of disrupted
sectors.
David Cruickshank will be appointed Chairman of
the Committee with effect from the conclusion
of the 2022 AGM. I know David will continue to
drive focus on the Committee’s key areas of
responsibility.
This year there have been a number of important
initiatives and projects in the Committee’s areas
of oversight. I would like to thank my fellow
Committee members for their commitment and
diligence throughout the year and, most
importantly, the people across Jupiter who have
continued to innovate and drive progress
in the most remarkable circumstances.
I hope to be able to meet with shareholders in
person for my final AGM on 11 May 2022.
Polly Williams
Chair of the Audit and Risk Committee
AUDIT AND RISK COMMITTEE REPORT continued
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Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
COMMITTEE’S ACTIVITIES
The table below shows the key activities undertaken by the Committee throughout the year.
Activity Outcomes
Financial reporting
Annual and interim reporting
> See page 96 for further
information
Reviewed the annual and interim reports and recommended them to the Board, which included ensuring there
were effective financial controls operating across the Group to safeguard the integrity of the Group’s financial
reporting. The Committee reviewed and suggested changes to the annual and interim reports to ensure they
provided a true and fair view of the Company’s position and that they were fair, balanced and understandable.
Statement of viability and going
concern
> See page 98 for further
information
Considered, challenged and approved the Group’s statement of viability and the preparation of the annual and
interim accounts on a going concern basis. The Committee specifically focused on the uncertainty caused by the
Global pandemic and considered a variety of stress scenarios.
Significant accounting
judgements and estimates
> See page 96 for further
information
The Committee reviewed, challenged and approved all significant accounting judgements and estimates for both
the annual and interim reports. Before agreeing the accounting estimates and judgements the Committee engaged
with the External Auditors to seek their view on these key items.
Alternative Performance
Measures
> See page 98 for further
information
Challenged and approved the use of Alternative Performance Measures in the Annual Report and Accounts and
ensured that these were appropriate to provide users of the accounts with a clearer understanding of the Group’s
business. The Committee reviewed the disclosures to ensure that they were clear to the readers of the accounts.
Internal Capital Adequacy
Assurance Process
The Committee reviewed and approved the Group’s ICAAP and wind-down plan, with a focus on the operational
risk scenarios and stress testing.
Received a briefing from external advisors on the new requirements introduced by the move to the ICARA.
Risk and compliance
Risk Appetite Statement and
Enterprise Risk Management
Framework
This year the CRO led the process to revise our Risk Appetite Statement and Enterprise Risk Management
Framework, to better align our risk taxonomy with our business operations. The Committee have been fully
involved in this review with a dedicated additional meeting being held in June to provide input and challenge to
the proposed changes. The CRO also held a number of meetings with individual Committee members to discuss
their views during the process and ensure their feedback was incorporated. The final documents were then
reviewed and approved at the Committee’s October and December meetings.
Material and emerging risks Discussed the material and emerging risks and considered potential impacts to the Group. Reviewed and
approved the risk management disclosures in the annual and interim reports, which included the Top-Down Risk
Assessment and suggested a number of changes to provide further clarity to readers of the accounts.
Internal controls Reviewed the effectiveness of the internal control environment including consideration of risk incidents, the
output from the risk and control self-assessment, compliance and internal audit findings. There was specific
consideration of the internal control operation in light of the remote working environment.
Risk and compliance reporting The Committee receives a report at each meeting from the Group’s CRO which provides an update on risk and
compliance matters. This includes the review of the Top-Down Risk Assessment, a detailed overview of any risk
incidents or breaches, key priorities for the activities of the teams, compliance monitoring findings and an update
on any regulatory matters, engagement or change. The Committee requested follow-up reporting on a number of
matters to ensure they were resolved satisfactorily.
ESG risk management Considered ESG-related risks arising from the Group’s investment activities and how these are managed and
overseen within the Governance framework.
Liquidity risk management Monitored the Group’s implementation of the revised liquidity risk management procedures and liquidity stress
testing in line with the new liquidity risk management requirements and best practice.
Cyber risk The Committee received an update on Jupiter’s cyber defences and the operational resilience of the Group in the
event of a successful attack. This included reviewing specific incidents, outside of Jupiter, to identify areas of
improvements within Jupiter’s cyber risk management. The Committee added specific scenario requirements to
the planned cyber incident test to be undertaken in 2022.
Supplier management policy and
procedures
Reviewed and challenged the proposed changes to the Group’s supplier management policy and framework
which has been enhanced to improve oversight of third-party suppliers on a risk-based approach.
Compliance monitoring plan The Committee reviewed and approved the Group’s compliance monitoring plan, under which the compliance
team review and test key areas of the firm’s business as part of the second line of defence oversight.
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Jupiter Fund Management plc | Annual Report and Accounts 2021
Activity Outcomes
Legal and litigation risks Received an update from the General Counsel on potential legal and litigation risks across the Group.
AAF report The Committee oversaw the preparation of the Group’s annual assurance report on internal controls which was
audited by EY and approved the final report before it was sent to third parties.
Financial crime prevention The Committee received an update from the Head of Financial Crime on the policies and procedures in place to
manage money laundering and financial crime risks across the Group. It was noted that the framework and
management of the risks were considered to be effective.
Whistleblowing arrangements The Committee reviewed the firm’s whistleblowing policy and arrangements and found these to be effective and
in-line with best practice. The Chairman of the Committee is the whistleblowing champion and ensures, should
any reports be received, these are independently investigated.
Fraud deterrence policies and
procedures
The Committee assessed the effectiveness of the policies and procedures in place to prevent fraud across the
organisation, including measures designed to protect our clients. These were found to be effective; however, the
Committee highlighted the need to remain vigilant in light of the increasing sophistication of fraud cases. The
Committee also requested that specific warnings of known scams be better signposted on our website to help
protect clients and the public.
Rebate agreements The Committee reviewed the additional controls implemented to prevent errors in calculating payments to
clients under rebate agreements and found that the additional preventative and detective controls were
operating effectively and had helped to mitigate this risk. The Committee also received an update on the review
of rebate agreements which had transitioned from the legacy Merian business.
External audit
> Further information on page 99
External audit tender During the year the Committee oversaw a tender for the external audit services. The Committee approved the
tender process and oversaw its implementation. In November an additional meeting was held to consider
presentations from the participating External Audit firms, following which the Committee recommended to the
Board the appointment of EY as the Group’s external auditors.
External audit reporting The Committee receives regular reporting from the external auditors on the external audit plan, progress thereon
and any matters identified in the course of the audit. A key focus of the Committee was the effectiveness of the
external audit in light of the remote working environment.
External auditor effectiveness The Committee reviewed the effectiveness of the external auditor, which included the results from the internal
evaluation, as well as the FRC’s Audit Quality Review (AQR) on PwC. Overall the reports showed that the external
auditors were delivering an effective audit to the Group and its subsidiaries. Key areas for improvement related to
communication and the timings of subsidiary audits. The Committee challenged PwC on the findings of the FRC’s
AQR and their plans to address the items raised.
Independence of external
auditor
The Committee is responsible for maintaining policies and procedures to help ensure the independence of the
external audit function. In May this year the Committee refreshed the existing Auditor independence policies,
which included the provision of non-audit services, the recruitment of individuals previously employed by the
Group’s external auditor and the policy covering personal use of the external auditor. The policies were in
accordance with all regulatory requirements and best practice and were formally adopted by the Committee.
At each meeting the Committee considers the independence of the external auditors, which includes approving
non-audit related engagements and expenditure. The Committee is satisfied that the external auditor continues
to be independent.
External audit fee The Committee reviewed and challenged the proposed fees for the external audit of the Company and its
subsidiaries. This year the external audit fee has decreased by £200k, which is primarily due to the reduction in
complexity following the completion of the Merian acquisition.
Internal audit
> Further information on page 100
Internal audit reporting At each meeting the Committee receives a report from Internal Audit which provides an update on the internal
audit plan, an overview of all internal audit reports issued during the period and an update on identified and
outstanding management actions. The Committee reviewed the reports and challenged management on any
actions which had been identified as overdue.
Internal audit plan The Committee reviews and approves the internal audit plan, which is considered in conjunction with the
Compliance monitoring plan to ensure effective assurance reporting over all of the Group’s operations, with
appropriate focus on higher risk areas.
Internal audit transition Last year we confirmed our intention to move to a co-sourced internal audit function and we have now built out
our Internal Audit team, who will be supported in the delivery of their duties by an external co-sourced provider.
The Committee has overseen the transition to ensure that all planned audits were delivered effectively and that
there was minimum disruption to the business. The transition has progressed very smoothly and we are already
seeing the benefits of developing our in-house function. Due to the ongoing monitoring of the Internal Audit
transition by the Committee, a formal review of the effectiveness of Internal Audit was not undertaken during the
year.
AUDIT AND RISK COMMITTEE REPORT continued
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Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
Activity Outcomes
Internal Audit Charter Our new Head of Internal Audit reviewed and proposed a number of changes to the Group’s Internal Audit
Charter, which can be found on our website at www.jupiteram.com. The Committee reviewed and approved the
new charter, highlighting the improvements.
Internal Audit co-source tender Our Head of Internal Audit, supported by management, undertook a comprehensive tender for the co-sourced
Internal Audit provider. By having a co-sourced function we are able to leverage the wide expertise and depth of
resource of our co-sourced provider. The Committee oversaw the tender process and the Chairman of the
Committee met with finalist firms. The Committee approved the appointment of BDO LLP as the Group’s Internal
Audit co-sourced provider.
Other
Client Money and Custody Asset
Assurance (CASS) report
Each year the Group’s independent auditors are required to undertake a CASS audit which reports on the Group’s
compliance with the Client Assets Sourcebook. The Committee reviewed and approved the CASS Report and will
oversee the implementation of the control findings identified by PwC.
Unlisted Assets Valuation
Committee
> Please see page 98 for further
information
Reviewed the operation of the UAVC, including the structure of the UAVC, the valuation process and the
responsibilities of the relevant parties including the independent valuation experts, AIFM and, where relevant, the
independent Investment Trust or Fund Board.
Consultation – Restoring Trust in
Audit and Corporate Governance
Reviewed the consultation launched by the Department for Business, Energy & Industrial Strategy entitled
‘Restoring Trust in Audit and Corporate Governance’. The Committee oversaw the Group’s response to the
consultation as both a listed company and a major investor in UK equities. The Committee will continue to
monitor the outcome from the consultation and ensure appropriate preparation is undertaken for the
implementation of the new rules.
Tax strategy The Committee reviewed and approved the Group’s tax strategy which includes details of how we manage the
tax affairs and related risks to our business.
Terms of reference Reviewed its Terms of Reference to ensure they remained up to date and in accordance with best practice. A
small number of minor amendments were approved, but these did not change the roles and responsibilities of the
Committee.
Committee evaluation
> Please see page 101 for further
information
The Committee monitored the actions arising from the 2020 Committee evaluation and discussed the results of
the 2021 Committee evaluation, including the agreed actions and areas of focus for the Committee during 2022.
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Financial reporting
One of the core responsibilities of the Committee is to ensure the integrity of the Group’s financial reporting, which includes overseeing the effectiveness
of the financial control environment. Prior to recommending the year-end financial statements to the Board for approval, the Committee reviews the
accounting policies adopted by the Group and considers the principal areas of financial statement risk and challenges management on areas of estimation
and judgement. The significant judgement areas considered by the Committee are set out in the table below. In each case the Committee concluded that
the accounting treatment and disclosure in the financial statements are appropriate.
The Committee has also assessed the Annual Report and Accounts to ensure that, taken as a whole, it is fair, balanced and understandable and that it
provides the information necessary for shareholders to assess the Group’s position and performance, business model and strategy.
Key areas of estimation and judgements
Share-based payments
Assessment of area of estimation and
judgement
The most significant share-based payment accounting costs for the Group relate to Long-Term
Incentive Plans (LTIP), Deferred Bonus Plans and the Deferred Earn Out Awards. There have been no
changes in use of estimation in the Group’s share-based awards. The principal area of estimation
relates to the probability of vesting of performance-based awards.
Considerations The Committee considered the status of the Group’s outstanding LTIP awards and agreed that no
adjustments for lower future vesting expectations should be made for the year ended 31 December
2021.
Goodwill and intangible assets
Assessment of area of estimation and
judgement
The Group has goodwill of £570.6m on its balance sheet which is not amortised and remains
unchanged from year to year unless deemed impaired. A full impairment test using a discounted cash
flow model was conducted which demonstrates that there continues to be significant headroom
available between the fair value of the goodwill asset and its carrying value.
The Group’s intangible asset arising from the acquisition of Merian was £75.0m at the acquisition date.
The asset is being amortised over a period of four years. An assessment of whether the asset may be
impaired, with consideration having been given to internal and external factors, demonstrated that
there were no compelling indicators of impairment.
Outcome The Committee agreed with the Finance team’s recommendation that no impairment of the Group’s
goodwill and intangible assets is required.
Consolidation of seed investments
Assessment of area of estimation and
judgement
In accordance with IFRS 10 the Group is required to consolidate any entities under the control of the
Company. A number of factors are applied to identify the funds that require consolidation and there
has been no change to the methodology applied in 2020.
Outcome In applying the agreed methodology two changes were proposed to the list of funds to be
consolidated, with one additional fund being incorporated and one removed from the consolidation.
These were agreed by the Committee.
AUDIT AND RISK COMMITTEE REPORT continued
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Significant accounting matters
Merger relief reserve
Summary of significant accounting item In the 2020 Annual Report and Accounts and the 2021 Interim Report, the Group accounted for the
shares it issued in consideration for the Merian acquisition within the share capital and share premium
account. However, under s.612 of the Companies Act, where 90% or more of the consideration paid is
in equity then merger relief must be applied. This means that the share premium must be recorded in a
separate reserve. There was no impact on the overall financial position or distributable reserves of the
Group or Company.
Considerations The Committee agreed that a restatement of the consolidated and individual company balance sheet
and associated notes, together with an explanation of the impact of the reclassification, was required.
Performance fees
Summary of significant accounting item A significant part of the gross performance fee owed by the Chrysalis Investment Trust was paid to
the Group in Chrysalis shares. The number of shares transferred to the Group equalled the number of
shares needed by the Group to hedge the deferred compensation element (which are in the form of
Chrysalis shares), plus sufficient shares to hedge against national insurance and similar liabilities.
Considerations The Committee considered the principal accounting consequence of this, which means that the
Chrysalis shares will become assets of the Group until the deferred awards fully vest and will be
marked to fair value through the income statement, resulting in gains or losses for the Group offset by
changes in the value of the deferred awards and related taxes.
Consideration and related matters arising from the Merian acquisition
Summary of significant accounting item The consideration paid for the Merian acquisition is subject to potential adjustments that could arise
from an obligation for TA Associates to repay specific cash amounts back to the Group under the
Purchase Price Agreement (PPA) and in respect of Deferred Earn Out (DEO) obligations.
Considerations Under the terms of the PPA and DEO any obligation for TA Associates to repay cash amounts back to
the Group is offset by Merian related performance fees. The performance fees earned from Merian
funds up to 31 December 2021 exceeded any potential payments due from TA Associates under the
PPA and DEO.
Disclosure of exceptional items
Summary of significant accounting item The Committee reviewed management’s proposals to include a number of items as exceptional items
which are defined as “Items of income or expenditure that are significant in size and which are not
expected to repeat over the short to medium term”.
Exceptional items incurred in 2021 amounted to £33.0m and related to costs arising from the Merian
acquisition and the final stage of a restructuring programme that commenced in 2020.
Considerations The Committee agreed that the above-mentioned items meet the definition of exceptional items,
which was a view confirmed by the External Auditors. The costs relating to the Merian acquisition,
principally the amortisation of intangible assets, would be classified as exceptional items until the costs
were extinguished in 2024.
Notes to the cash flow statement
Summary of significant accounting item The reconciliation of the changes in liabilities arising from financing activities (note 2.2 to the cash flow
statement) in the 2020 Annual Report and Accounts excluded lease liabilities.
Considerations The Committee agreed with management’s proposal to amend the note in the 2021 financial
statements to reflect all financing activities (i.e. including leases), and the comparative amounts have
been restated.
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Going concern and statement
of viability
The Directors are required under UK law and the
UK Corporate Governance Code to conclude on
the Group’s ability to continue as a going concern
and to include a statement of viability in the
Group’s Annual Report and Accounts
respectively. They must satisfy themselves as to
the Company’s ability to continue as a going
concern for a period of 12 months from the date
of the approval of the financial statements. In
addition, the Company is required to provide a
statement of viability, which can be found on
page 26, and which reports on the viability of the
Company over a three-year period.
The Committee supports the Board in its
assessment of going concern and ongoing
viability by considering and reviewing a number
of factors such as the current financial position,
budget and cash flow forecasts, liquidity,
contingent liabilities and unfavourable market
scenarios, versus the Group’s core forecasts,
the Group’s ICAAP and wind-down plan,
and risks to the Group’s operations including
transition risk related to the Merian acquisition,
or balance sheet position.
The Committee considered and assessed the
Company’s viability under a combination of
severe stress scenarios including the impact of
multiple risks occurring simultaneously and
whether there was potential for further
pandemic-related market uncertainty.
The Committee recommended to the Board that
it was appropriate for the Group to adopt the
going concern basis of accounting in preparing
the half-year and annual financial statements for
the year ended 31 December 2021 and that the
Company would remain commercially viable over
a three-year period.
Fair, balanced and understandable
The Committee assessed whether, taken as a
whole, the 2021 Annual Report and Accounts was
fair, balanced and understandable and provided
the information necessary to assess the
Company’s position and performance, business
model and strategy.
To assist with the Committee’s assessment as to
whether the Annual Report and Accounts is fair,
balanced and understandable, the Committee
receives and discusses papers from management
outlining changes in the application of any
accounting policies together with material
estimates and judgements.
The Committee received and reviewed a full
draft of the accounts at its February meeting
and considered whether the performance and
position of the Group had been described in
a fair and balanced way in the financial review.
We believe that the tone and content accurately
reflect the performance of the business, while
also providing relevant information for users.
The Committee’s attention was given to the
disclosure in respect of the use of APMs (see
following paragraph for further detail) to ensure
that the disclosure in respect of APMs was clear
and transparent.
Following its review, the Committee was
of the opinion that the 2021 Annual Report and
Accounts was representative of the year and
presents a fair, balanced and understandable
overview. The Committee was also of the opinion
that the Annual Report and Accounts provides
a true representation to shareholders of the
Company’s position and performance, business
model and strategy.
Alternative performance measures
The Committee reviewed the approach proposed
by the Finance team for disclosure of APMs
specifically around the presentation of
exceptional items and performance fees in the
Group’s income statement. Exceptional items are
defined as items of income or expenditure that
are significant in size and which are not expected
to repeat over the short to medium term.
Such items were separately presented to enable
a better understanding of the Group’s ongoing
financial performance. The exceptional items for
the 2021 financial year are consistent with those
disclosed in 2020 and relate principally to a cost
reduction programme and to costs arising from
the Merian acquisition in 2020, that are required
to be recognised over multiple accounting
periods. The Committee reviewed and challenged
the costs proposed by management as
exceptional items for the period and agreed that
they met the principles for treatment as
exceptional items, which was also agreed by the
Group’s external auditors. Additional APMs have
been used in the presentation of the 2021 Annual
Report to exclude the impact of substantial
performance fees received and associated
variable compensation awards. Such fees are
unlikely to recur at the same levels in future years
and could therefore be seen as unrepresentative
of the Group’s core fee-earning potential as well
as its variable cost base. The Committee
considered whether the exclusion of such items
of income and cost from underlying performance
measures was appropriate, and whether this
resulted in more useful information for users of
the accounts. The Committee also considered
whether this treatment created an excess of
APMs in the Annual Report and Accounts which
could prevent it from being fair, balanced and
understandable. The Committee concluded that
the use and disclosure of APMs in the Annual
Report and Accounts was appropriate, and that
the definitions and explanations were clear.
Unlisted valuations
During 2021 the Committee considered the
process for the valuation of unlisted asset held by
products managed by Jupiter. This primarily
related to assets held by Chrysalis, whose fee
structure includes a performance fee.
The Chrysalis performance fees are earned based
on clear contractual criteria set out in the
Chrysalis prospectus and within their subsequent
financial reports and is not subject to clawback.
The Committee specifically considered the
valuation process in light of the valuation
responsibilities and potential performance fees,
which included:
• Valuations are determined in accordance with
International Private Equity and Venture
Capital Guidelines.
• Valuations are prepared by an independent
expert valuer, are subject to a clear control
framework and are considered and approved
by the UAVC of the AIFM.
• Enhancements to the process had been
identified that were implemented in 2021
including the appointment of an independent
non-executive chairman of the UAVC.
• Valuations are audited by the Chrysalis external
auditor as part of the statutory audit and are
approved by the Chrysalis Board.
In conjunction with the Board and the
Remuneration Committee, the basis of the
performance fee related pay was also considered.
For 2021, it was agreed with the Chrysalis Board
that the performance fee should be partially
settled in Chrysalis shares. The number of shares
was determined by reference to the Chrysalis
share price as at 30 September 2021, the date the
performance fee crystalised. 54% of the 2021
performance fee was settled in Chrysalis shares,
equivalent to the deferred awards to be granted
to the Chrysalis investment desk, including
related employer taxes.
As a result, the fair value of the deferred bonus
award was established as at 30 September 2021
and the value of that award has decreased based
on the Chrysalis share price at 31 December 2021.
The deferred awards vest over three years and
the actual fair value is determined based on the
Chrysalis share price at the exercise dates. The
accounting requirements for this award, including
the accounting timing recognition mismatch of
the reduction in the fair value of the asset and
the deferred bonus awards in accordance with
IFRS, were considered by the Committee.
External audit
PwC served as the Group’s external auditors
during the year. PwC was first appointed as
AUDIT AND RISK COMMITTEE REPORT continued
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GOVERNANCE
external auditor in 2007 and their reappointment
as the Company’s external auditor was confirmed
following a formal external audit tender process
in 2014. Colleen Local was appointed as lead audit
partner in January 2020. For the year ended 31
December 2021 only, Lindsay Gardiner provided
parental leave cover and led the external audit.
The Company is in compliance with the
requirements of the Statutory Audit Services
for Large Companies Market Investigation
(Mandatory Use of Competitive Tender Processes
and Audit Committee Responsibilities) Order 2014
and the Corporate Governance Code. Under
these requirements a tender for the external
audit must be undertaken no later than 2024.
During the year, the Company commenced and
completed the Audit Tender Process which was
overseen by the Committee (see below for
further detail).
The Committee met with representatives from
PwC without management present to ensure that
there were no issues that needed to be brought
to the attention of the Committee.
External audit tender
The Committee undertook a formal tender
exercise for the external audit services in the
second half of 2021 and conducted the tender in
accordance with the FRC’s Best Practice Guide to
Audit Tendering.
In May, the Committee reviewed and approved
the proposal for the audit tender process. They
considered and agreed the scope of the audit
tender along with which firms were to be invited
to tender for the audit and related services.
Five firms were invited to tender including two
firms outside the ‘big four’ audit firms. The
Committee focused on identifying which firm
would provide appropriate challenge and deliver
high-quality assurance whilst also providing the
best fit with Jupiter. The scope of the Request for
Proposal (RFP) comprised the provision of the
auditors’ report on the Annual Report and
Accounts of Jupiter Fund Management plc and
each of its corporate subsidiary undertakings,
along with audit-related services including the
interim review report, client assets reporting in
accordance with FCA requirements, and the AAF.
An assessment of each firm’s independence
was considered by the Committee taking into
account existing services currently being
provided to Jupiter, that would not be
permissible in the future, should the provider be
successful with the tender. Initial meetings were
held with management and each of the providers.
Throughout the audit tender process the
Committee monitored each firm’s independence
and assessed the plans for the transition of
existing services or new services where the
incumbent firm would need to be replaced.
In November, a meeting of the Committee was
convened specifically to receive and consider
presentations from the three audit firms
participating in the final stage of the audit tender.
The Committee used the meeting to challenge
and question each of the audit firms to ensure
that the preferred firm would provide the highest
quality, most effective and efficient audit and
would be the best fit for Jupiter. Each audit firm
was provided with the following guiding
principles for the structure of their presentations
to Jupiter:
• Highlight key areas of differentiation;
• Demonstrate the key strengths of your firm;
and
• Outline how your firm will deliver a high-
quality, efficient and effective audit.
The Committee sought responses to questions
relating to the audit firm’s available resources, the
management of conflicts in their time, the
development of effective working relationships
with key stakeholders whilst maintaining
appropriate rigour and the process for the audit
of overseas entities. The Committee also
considered areas of improvement for each audit
firm as identified by the FRC’s audit quality
review. At the December Committee meeting
the Committee agreed that EY would provide
the most robust and effective audit and was the
best fit for Jupiter, with two other firms also
being presented to the Board. The Committee
recommended to the Board that EY be
appointed as External Auditor with effect from
the year ended 31 December 2023, subject to
shareholder approval.
Throughout the process, and following the Board
decision, feedback was provided by the
Committee Chairman to each participant firm.
An overview of the timeline for the audit tender
process is detailed below:
Q2 2021 The Committee approved the Audit
Tender Plan, including the selection
of firms to involve.
Q3 2021 Audit tender process commenced.
Q4 2021 The Committee selected the chosen
audit firm for recommendation to
the Board.
2022 The selected firm to gain
independence and undertake
shadowing of PwC’s work.
2023
AGM
The selected firm recommended to
shareholders at the AGM.
External auditor independence policies
In 2016, the FRC issued its Revised Ethical
Standard 2016 which was updated in 2019.
These aimed to strengthen auditor independence
and prevent conflicts of interest in order to
improve audit quality with focus on threats to
the integrity, objectivity and independence of
the auditors.
In May, the Committee considered, reviewed
and approved three updated independence
policies, designed to help safeguard the
independence of the external auditor by limiting
the amount of influence the Group or those in
financial oversight roles can have over the
external auditor as follows.
• Provision of non-audit services by the Group’s
external auditors;
• Appointment of individuals formerly employed
by the Group’s external and internal auditor;
and
• Policy covering the personal use of the
external auditor.
External audit effectiveness
In October, the Committee conducted
a formal evaluation of the independence and
effectiveness of PwC as the Company’s external
auditors. The evaluation was fulfilled by means
of a questionnaire completed by key internal
stakeholders, in accordance with the FRC’s
guidance on assessing audit quality. This included
all services provided by PwC and enabled the
Committee to assess and discuss with relevant
parties (including the auditors) the key messages
and themes emerging from the evaluation. Four
criteria were used to assess audit quality; mindset
and culture; skills, character and knowledge;
quality control; and judgement. Overall, PwC was
found to have performed effectively during the
audit and to have upheld excellent standards in
respect of reputation, integrity and judgement.
Although there was a good level of satisfaction in
relation to the 2020 audit, a small number of
issues were identified. Overall the evaluation
indicated that there had been an improvement to
the scores from the previous year; however,
feedback from Committee members had
declined, which was primarily due to
communication between PwC and Jupiter being
impacted by the remote working environment.
The Committee considered how to improve
communication channels now that staff have
returned to the office. Whilst this did not impact
the quality of the audit, the Committee
challenged PwC to ensure a more comprehensive
round of planning meetings with Jupiter.
The Committee also reviewed the FRC’s Audit
Quality Review on PwC. In the FRC’s latest
inspection published in July 2021, the FRC
reviewed 20 audit engagements undertaken
by PwC, half of which related to FTSE 350 firms,
which showed an increase in the quality of the
specific audits they reviewed in 2020/21
compared with their assessment for those
audits they reviewed in 2019/20. Overall the
FRC assessed PwC’s audit process as of
a good standard.
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Jupiter Fund Management plc | Annual Report and Accounts 2021
External Audit Fees
£0.5m
£0.3m
20
21
Audit fee
£0.3m
£0.3m
20
21
Audit related assurance services
£0.8m
£0.8m
20
21
Audit fee for subsidiaries
£ 0.9m
£ 0.0m
£ 0.0m
£ 0.0m
20
21
Other assurance services
20
21
Other non-audit services
XX
Non-audit services
Services classified as non-audit services, as above,
include the review of the interim results, CASS
audit, and overseas regulatory audits.
To safeguard the external auditors’ objectivity
and independence the Committee has a
non-audit services policy, which sets out the
procedure for the provision of any non-audit
services by the external auditors to any entity
within the Group. The policy requires all
non-audit services to be approved by the
Committee, which can be facilitated by the
Committee Chairman should such approval
be required in between Committee meetings.
At each Committee meeting the non-audit
spend of the Group is reviewed and an
assessment made of the independence
of the external auditors.
With effect from 1 January 2017, the FRC
introduced new rules for auditors in respect
of the provision of non-audit services whereby
the proportion of non-audit service fees that
can be incurred in a year is limited by reference
to the average audit fee over a rolling three-year
period and prohibits non-audit services fees from
exceeding 70% over both UK standalone and
total Group bases. In December 2019, the FRC
published revised ethical standards which aim
to strengthen auditor independence, prevent
conflicts of interest and improve audit quality.
The revised standards placed further limits on the
provision of non-audit services. The Company is
compliant with these requirements.
External auditor oversight conclusion
The Committee concluded that PwC is effective,
undertakes the audit with integrity and sufficient
challenge and remains independent. It is
proposed that PwC be recommended to
shareholders for re-appointment for the year
ending 31 December 2022.
Internal audit
During the course of the year the Company
transitioned from an out-sourced internal audit
model, provided by EY, to a co-sourced internal
audit model. Both the lead audit partner from EY
and the Head of Internal Audit reported directly
to the Committee Chairman. The Committee
worked with internal audit to ensure that the
audit plan for the year addressed the most
material risks to the Group and the key themes
affecting the asset management industry.
The Committee reviews the internal audit plan
at each meeting to ensure that it remains relevant
for new and emerging circumstances. A total
of 11 internal audits were completed during 2021
for Jupiter Fund Management plc which included
a focus on third-party providers governance
and oversight, market abuse, liquidity risk
management, ESG, implementation of the Senior
Manager and Certification Regime, cyber security,
ESG framework and the Inter-Bank Offered
Rate transition.
In addition, four internal audits were
undertaken during 2021 in respect of Jupiter
Asset Management (Europe) Limited (Ireland)
and 14 were undertaken for Jupiter Asset
Management International S.A. (Luxembourg).
The Committee has overseen the transition to
a co-sourced model and the development of
an internal audit function was a key focus of the
Committee during the year. Under this operating
model Jupiter has developed an in-house internal
audit team, which will be supported by an
internal audit co-sourced partner.
A tender for the internal audit co-sourced
partner was led by the Head of Internal Audit
and following an initial phase of pre-qualification
meetings with seven potential providers, five
firms were asked to respond to a detailed RFP.
Two firms were considered to be the most
suitable firms for Jupiter’s size, business and
culture and the Committee Chairman, a member
of the Committee, the CEO and the CFO met
with both firms.
At the October Committee meeting the
Committee considered the two final proposals
and concluded that BDO LLP was the most
suitable internal audit co-sourced provider and
agreed to appoint BDO LLP with effect from
1 January 2022.
Effectiveness of internal audit
In line with the approach taken for the external
auditors, the Committee monitors the fees paid
to EY for services outside the internal audit to
ensure their objectivity and independence and
will continue to do so for BDO LLP.
Due to the close involvement of the Committee
in the internal audit transition to a co-sourced
internal audit function, a formal review of the
effectiveness of the internal audit function
was not undertaken during the year. The
Committee will undertake a review of the
effectiveness of internal audit in H1 2022.
Enhanced risk management
At a meeting in June, which was focused
on the enhanced risk management framework,
the Committee reviewed and considered
proposed enhancements to the enterprise risk
taxonomy, the top-down risk assessment process,
the risk appetite statement and metrics and the
key risk indicators. The purpose of the review
was to provide an enhanced holistic view of how
we identify, assess, manage and report to the
Board on the risk profile of Jupiter’s entities as
the Group expands geographically. Consideration
was also given to industry best practice. The
Committee challenged and questioned the
rationale behind some of the proposed changes
to the risk taxonomy and Risk Appetite
Statement and thresholds in advance of the
formal review and approval of the updated
Enterprise Risk Management Framework policy at
the October meeting and the Risk Appetite
Statement at the December meeting.
AUDIT AND RISK COMMITTEE REPORT continued
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GOVERNANCE
Monitoring of the Group’s risk
management environment
During the year the Committee received
regular management reports from the
CRO on:
• The profile of our Strategic, Operational,
Capital Adequacy, Liquidity, Credit and
Counterparty, and Market Risks.
• Adherence to the Group’s Risk Appetite and
any breaches of risk appetite metrics.
• The profile of transversal risks such as Conduct
Risk and ESG.
• Cyber and regulatory risk (including post Brexit
divergence, SFDR and our registration in the
US).
• Changes to key regulations and how these will
impact the Group.
• Details of planned Risk and Compliance
Assurance reviews and any material findings
and themes.
• Review and approval of the Group’s AAF.
• The Committee reviewed the Group’s ICAAP
and recommended its approval to the Board.
In its review of the Group ICAAP, the
Committee assessed and challenged:
• Management’s methodology and approach.
• Operational risk scenarios, assumptions and
quantification.
• Capital and liquidity stress testing.
• The Group’s proposed wind-down plan.
Monitoring of the Group’s internal
control environment
During the year the Committee:
• Evaluated and monitored material control
issues identified by management through
regular reports from the CRO.
• Considered reports from the second line of
defence on the oversight of operational risk
controls.
• Reviewed processes for financial crime
prevention and deterrence of fraud.
• Overall, it was considered that Jupiter had
effective and proportionate anti-money
laundering and financial crime prevention
systems and controls. Extra resource was
recruited in Luxembourg to assist the
Compliance Conducting Officer with financial
crime prevention and other compliance
matters.
• Received a report from the Chairman of the
Committee, in her capacity as Whistleblowing
Champion, and a review of the whistleblowing
procedures.
• Reviewed reports from the third line of
defence on the maturity of the internal control
environment.
• Conducted an annual and interim review of the
effectiveness of Jupiter’s system of risk
management and internal control which
includes financial, operational and regulatory
compliance controls.
The Committee’s review of the internal control
framework concluded that the internal control
framework was operating effectively and that
there were robust processes in place to ensure
appropriate financial and regulatory reporting
controls, including over the enlarged Group.
The Committee therefore recommended to
the Board that the risk management and internal
control framework was operating effectively.
Where the Committee identified areas requiring
improvement, processes are in place to ensure
that the necessary actions are taken and progress
against those actions is monitored.
Committee effectiveness
During the year an internal evaluation of the Committee’s effectiveness was undertaken, the process for which can be found on page 85. The table below
provides an update on the priorities identified in the 2020 evaluation and also a summary of the conclusions from the 2021 evaluation.
2020 priorities 2021 status
Ensure a comprehensive tender for the external
audit services is undertaken in 2021.
A comprehensive tender for the external audit services was undertaken in 2021. See “External audit
tender” on page 99 for further detail.
Develop further the integrated assurance plan to
continue to provide comprehensive coverage of
key risk areas, whilst maximising the efficiency of
the business.
The development of an Internal Audit function has resulted in better collaboration between the
Group’s Risk and Compliance Team and Internal Audit function. This has resulted in a comprehensive
and cohesive integrated assurance plan for 2022 and beyond.
Oversee continued enhancements to the risk
management framework and processes, and the
assurance reporting to the Committee.
A dedicated meeting was scheduled in July, followed by further discussion in October, where the
Committee reviewed and considered proposed enhancements to the enterprise risk taxonomy,
top-down risk assessment process, risk appetite statement and metrics and the key risk indicators.
See “Enhanced Risk Management” on page 100 for further detail. The CRO provides assurance
reporting at each Committee meeting, and this will continue to be enhanced throughout 2022 as
the revised risk management framework is embedded.
2021 evaluation conclusions
The evaluation process demonstrated that the Committee had operated effectively during the year and particularly commended the effectiveness of the
Chairman whose inclusive style ensures effective debate and encourages participation from all members. The Committee identified a number of priorities
for 2022:
• There needs to be continued focus on improving the quality of Committee papers and integrated assurance reporting aligned to the new Internal Audit
model and revised risk management framework.
• Ensure the new risk management framework is embedded across the organisation.
• Improve reporting and consideration of strategic and emerging risks and continued focus on developing risk areas such as ESG and cyber risks.
• Ensure the Committee is updated and trained on new regulatory requirements within the Committee’s remit.
• Continued focus and testing of the Group’s operational resilience.
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REMUNERATION
COMMITTEE REPORT
Roger Yates
Chairman
COMMITTEE MEMBERS AND REGULAR ATTENDEES
Meetings Meetings attended
Roger Yates (Chair) 5/5
Jonathon Bond
1
2/2
Nichola Pease 5/5
Karl Sternberg 5/5
1. Jonathon Bond stepped down from the Board on 6 May 2021.
The Committee comprises two independent Non-Executive Directors and the Chairman of the
Board who was independent on appointment in accordance with the UK Corporate
Governance Code. As disclosed on page 89 the Committee’s membership did not follow the
requirements of the UK Corporate Governance Code throughout the year. Suzy Neubert will
join the Committee on 1 March 2022 and the membership will be fully compliant with all
requirements.
The CEO, CFO, Company Secretary, HR Director and Head of Reward are invited to attend
Remuneration Committee meetings to contribute.
In addition, the CIO and CRO are invited to attend Committee meetings to provide specific
input, where requested. No individual is present when their remuneration is being discussed.
COMMITTEE’S KEY RESPONSIBILITIES
• Determining the overarching policy for the
remuneration of the Group’s employees,
ensuring it is structured in a way that rewards
individual and corporate performance and is
aligned with appropriate risk, compliance and
conduct standards and the long-term interests
of shareholders, clients and other stakeholders
• Determining the overall size of the annual
variable compensation pool and the total
compensation ratio
• Determining and reviewing annually those
individuals who may be considered to have a
material impact on the risk profile of Jupiter,
relevant subsidiaries and its funds (Code Staff)
for the purposes of the relevant remuneration
regulations
• Determining the Chairman of the Board’s
fees and the total individual remuneration
packages of Executive Directors, Executive
Committee members and individuals identified
as Code Staff
• Approving the design of, determining the
targets for, and monitoring the operation of,
any performance-related pay schemes
operated by the Group
• Reviewing the design of all share incentive
plans and deferred bonus arrangements for
approval by the Board and, if applicable,
shareholders
• Overseeing any major changes in employee
benefit structures throughout the Group
A full copy of the Committee’s terms of
reference can be found at www.jupiteram.com.
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GOVERNANCE
Dear Stakeholder,
I am pleased to present our Directors’
Remuneration Report (DRR) for 2021.
This 2021 DRR is divided into two sections:
• Executive Remuneration at a Glance. This sets
out the key terms of the Directors’
Remuneration Policy that was approved by
shareholders at our 2021 AGM alongside a
summary of how it will be implemented in
2022.
• The Annual Report on Remuneration. This
outlines in detail how we implemented the
Remuneration Policy in 2021 and how we
intend to apply it in 2022. It is subject to an
advisory vote by shareholders at the 2022
AGM.
Alignment of strategy and remuneration
Jupiter’s primary focus is on delivering value to
clients through long-term investment
outperformance after all fees. Jupiter’s business
model of combining this investment
outperformance with an effective distribution
platform, supported by efficient and scalable
operations, has enabled us to deliver value to
shareholders since listing in 2010 and
demonstrates how an active, high-conviction
approach to investment can be a differentiator
from passive strategies.
The variable pay structure aims to support the
delivery of the Company’s growth strategy by
incorporating key financial and strategic
performance measures into the bonus balanced
scorecard and the Long-Term Incentive Plan (LTIP)
performance conditions, whilst allowing the
Remuneration Committee appropriate discretion
to ensure bonus and LTIP payouts remain in line
with the overall experience of our various
stakeholders. Longer-term alignment is achieved
by a combination of a high level of deferral of
bonus payouts into shares or fund units, an
extended release period for LTIP awards and
significant minimum shareholding guidelines.
The following changes were incorporated into
our 2021 variable pay structure in order to
further enhance alignment with corporate
strategic goals:
• The 2021 bonus included an enhanced 35%
weighting on strategic and individual
performance measures. Pay-out on strategic
measures reflects successful progress against
‘lead indicators’ that are critical to growth and
our delivery of sustainable future profits. For
example, in 2021, particular focus was placed
on building on and delivering value from the
successful integration of Merian and
embedding our ESG priorities. The high level
of bonus deferral ensures, beyond the initial
bonus performance period, that executives
remain focused on successful realisation of
value from these ‘lead indicators’ in order to
maintain or grow the value of their deferred
awards.
• Net flows was moved from being a bonus
measure to a LTIP measure on the basis that it
was more appropriate to assess fund flow
performance on a longer-term basis.
As our corporate strategy goals remain
unchanged, the Committee is satisfied that the
broad structure of performance measures used
in 2021 remains appropriate for use in 2022 (as
detailed in the below table).
Percentages are weighting of
each measure in the relevant
plan Annual bonus LTIP
PBT 40% –
Net flows – 30%
Investment out-
performance
25% (1 yr
and 3 yr)
30% (3 yr
and 5 yr)
EPS – 40%
Strategic and
individual
performance
35%
1
–
1. Strategic measures used in the annual bonus plan in 2022
will be aligned to our strategic core objectives for 2022
(as set out on page 17) with particular focus on ESG and
sustainability objectives.
Other elements of remuneration in 2022
As detailed in last year’s DRR, the Committee is
implementing a phased two-year increase in our
CFO’s salary to reflect the level of responsibility
and scope of his role. The second stage of this
increase from £315,000 to £330,000 (4.8%
increase) will take place in 2022. The CEO’s salary
will remain unchanged. For context, the
budgeted average employee salary increase for
2022 is 6.7%. Pension, bonus and LTIP
opportunity percentages will be unchanged for
both CEO and CFO in 2022.
Performance and bonus outcomes
for 2021
Performance
As the CEO outlined in his review, this has been a
year of progress for Jupiter in challenging
circumstances and we have delivered strong
financial results that reflect the ongoing resilience
of our business and the strategy that underpins it.
Our underlying PBT was up 21% as we saw the full
year benefit of the contribution from Merian and
our strong investment performance generated
£113.0m of performance fees this year. A
challenging net flow picture, reflecting a slowing
in the appeal for UK equities and fixed income
funds where Jupiter has a strong product line-up,
was offset by another record year for gross sales.
Finally, our commitment to helping our clients
achieve their long-term investment objectives
continues to be delivered, with 58% of our
mutual fund assets outperforming over three
years, one of our most important KPIs.
Our investment in new areas over the past two
years means that we have broadened our
product offering, invested in our talent, and
adopted the processes, systems and technology
to meet the evolving needs of our clients. In
particular, well-targeted investment has enabled
us to successfully expand our sustainability
capabilities, grow our international presence and
position us for growth in the institutional market.
Bonus outcomes
Based on the good performance outlined above,
the formulaic outcome of the bonus scorecard
was 84.8% of maximum for the CEO and CFO. In
light of the Vice Chairman’s change of role after
stepping down from the Board at the 2021 AGM,
the Committee exercised its discretion to reduce
his maximum bonus potential from 200% to 75%
of salary and to determine his 2021 bonus wholly
on Group financial performance (which delivered
82.7% of the reduced maximum potential).
The Committee gave careful consideration to
these outcomes in respect of various internal and
external factors detailed on page 110 and 111 and
concluded that no further discretionary
adjustments were required. A full disclosure of
the bonus determination process and the
scorecard outcomes is provided on pages 109
to 112.
103
Jupiter Fund Management plc | Annual Report and Accounts 2021
REMUNERATION REPORT continued
CEO 2021 single figure and pay ratio
The first LTIP award granted to the CEO was
shortly after his appointment in 2019. The
performance period for that award ended on 31
December 2021 and the formulaic outcome was
30.3% vesting, full details of which are provided
on page 113. The Committee was satisfied that this
vesting outcome was justified by overall
performance over the three-year performance
period and that no discretionary adjustment was
required.
Inclusive of the vested value of this LTIP award,
the CEO’s 2021 single figure is £2,514k and the
median CEO pay ratio is 22:1. The 2020
comparators (single figure: £1,759k; median CEO
pay ratio 16:1) which did not contain any
entitlement to vested LTIP, will make the 2021
figure and ratio inevitably higher.
Employee share ownership
Employee share ownership continues to remain a
core principle for the Company, ensuring a strong
alignment with our other shareholders in the
long-term interest in the Group’s performance
and allowing all employees to share in the
Company’s success.
During 2021, the Company granted all eligible
employees a free share award. For employee
based in the UK this is under the Company’s
Share Incentive Plan (SIP). This award, contingent
upon employees continuing to serve with the
Company for at least three years from the award
date, ensured full participation in at least one of
the Company’s all employee share plans. A
further free share award is planned for all eligible
employees in 2022.
In addition to the free shares and SIP,
approximately 56% of employees hold share
options under our second UK all employee share
plan, Sharesave.
Pay regulation
During 2021 we undertook a review of our
remuneration policies and approach to ensure
compliance with the Investment Firms Prudential
Regulation (IFPR), which is applicable from the
start of this year. As part of this process we have
both reassessed the number of individuals who
have been identified as our key material risk
takers and made some minor amendments to
their pay arrangements in order to ensure
alignment with all prevailing sectoral pay
regulations.
Shareholder engagement
I would like to thank shareholders and investor
bodies for the constructive input and
engagement that they provided as we developed
the new Remuneration Policy and I am grateful to
shareholders for their support in approving both
the Remuneration Policy and DRR at the 2021
AGM with, respectively, over 95% and 97% of
votes cast in favour.
I welcome feedback at any point in time from our
entire shareholder base regarding our
remuneration arrangements and I hope that we
will have your support at the forthcoming AGM.
Roger Yates
Chairman of the Remuneration Committee
24 February 2022
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Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
EXECUTIVE REMUNERATION
AT A GLANCE
This table summarises the key terms for Executive Directors of the Directors’ Remuneration Policy approved by shareholders at the 2021 AGM, alongside
commentary of how we intend to apply this in 2022. A full version of the Remuneration Policy can be found on pages 84-93 of the 2020 Annual Report
which is available on our website at www.jupiteram.com.
Element Remuneration Policy summary 2022 approach Commentary relative to 2021 approach
Salary • Base salaries are generally reviewed
annually taking into account a range of
factors including size and scope of the
role; skills, performance and experience
of the individual; market competitiveness;
wider market and economic conditions;
and the level of increases in the wider
employee population
• CEO £455,000 (2021: £455,000)
• CFO £330,000 (2021: £315,000)
• CEO’s salary unchanged
• As outlined in prior Remuneration Reports,
the CFO joined Jupiter on a salary below
that of his predecessor on the
understanding that he may receive an
above inflationary increase as he
established himself in the role and
dependent on performance. As disclosed
in last year’s Remuneration Report, his
salary is consequently being increased over
two years (£315,000 in 2021 and £330,000 in
2022) to reflect the responsibility and
scope of the role
Pension • Pension contributions of 15% of salary are
made at a consistent level to all UK
employees
• 15% of salary • Unchanged
Bonus
opportunity
• Maximum opportunities: CEO 425%, CFO
250% of salary
• Maximum opportunities: CEO 425%,
CFO 250% of salary
• Unchanged
Bonus
performance
measures
• Balanced scorecard approach
• At least 65% based on corporate
quantitative measures; no more than 35%
based on individual and strategic
measures
• Payments subject to risk and compliance
assessment and application of
Remuneration Committee judgement
• 65% based on corporate quantitative
measures (profitability, investment
performance over 1 and 3 year periods);
35% based on strategic objectives and
individual performance
• Unchanged
Bonus
deferral
• 50% of total bonus deferred over three
years vesting in annual tranches and
subject to an additional six-month
holding period
• Deferral can be in shares or fund units
• Half of the remaining 50% delivered as
shares or fund units subject to a
six-month holding period
• Where an Executive Director has not
yet met their minimum shareholding
requirement, only 25% of their
deferred element can be delivered in
fund units
• Unchanged
LTIP
opportunity
• Maximum opportunities: CEO 375% and
CFO 225% of salary
• Maximum opportunities: CEO 375%
and CFO 225% of salary
• Unchanged
LTIP
performance
measures
• Subject to relevant performance
measures normally assessed over at least
three years and usually subject to an
additional two-year holding period
• Vesting subject to risk and compliance
assessment and underlying business
performance underpin
• Three measures: EPS growth (40%), net
flows (30%) and investment
outperformance over 3 and 5 year
periods (30%)
• Unchanged
Shareholding
requirements
• CEO 500%, CFO 250% of salary
• Post-employment shareholding
requirement of CEO 500% / CFO 250%
of salary in the first year and CEO 250% /
CFO 125% in the second year after
stepping down
• In line with the Remuneration Policy • Unchanged
Malus and
clawback
• Malus and clawback provisions apply to
all variable remuneration
• In line with the Remuneration Policy • Unchanged
105
Jupiter Fund Management plc | Annual Report and Accounts 2021
REMUNERATION REPORT continued
ANNUAL REPORT ON REMUNERATION
Implementation in 2021
Overview of activities in 2021
The following regular agenda items were considered during the scheduled Committee meetings which took place during 2021:
Jan Feb May Oct Dec
Remuneration Policy and disclosures
Review of Remuneration Policy • •
Directors’ Remuneration Report • • •
Risk and reward
Input from Risk and Compliance •
Review of risk checkpoints prior to variable compensation pool approval • •
Malus and clawback assessment •
Annual remuneration discussions
Bonus and LTIP pool • • • • •
Assessing performance against bonus scorecard • • • •
Individual performance and remuneration outcomes • •
LTIP performance condition testing •
Allocation of LTIP awards •
Setting bonus scorecard and LTIP performance measures • • •
Setting individual objectives for Executive Directors • •
Minimum shareholding testing •
Review Chairman’s fees •
Review of approved all employee share plans • •
External market
Shareholder trends and feedback •
Market trends •
Benchmarking data •
Regulatory
Internal audit of Remuneration Policy •
Remuneration Policy Statement •
Code Staff identification (CRD III, UCITS V, AIFMD and IFPR) • • •
Gender Pay Gap •
Committee remit and effectiveness
Terms of reference review •
Self-evaluation •
Work of the Remuneration Committee
in 2021
The table above provides a high level overview of
the various topics which the Committee has
worked on during 2021. The remainder of this
section satisfies several requirements of the
latest Corporate Governance Code.
Provision 40 statement and strategic
rationale
The Committee aims to have in place
remuneration arrangements which are simple and
therefore well understood by the entire
workforce, including the Executive Directors. The
simplicity is supported, for example, by a single
pension and benefits structure applicable to all
UK employees and not differentiated based on
seniority. Jupiter operates a single bonus deferral
plan, and an LTIP scheme for a limited number of
more senior employees. This simple and well
communicated remuneration structure should
ensure compensation spend is appropriately
valued by employees, and not eroded by
complexity.
All variable compensation, including that for
Executive Directors, is subject to a series of risk
checkpoints (as described in more detail on page
122), which aim to assess a range of ex-ante and
ex-post potential financial and non-financial risks
to the business prior to payment of any bonuses.
In conjunction with an individual risk, compliance
and conduct underpin, and the provision of malus
and clawback conditions on variable
compensation awards to Executive Directors, the
Committee is confident that its work provides a
robust framework to ensure appropriate risk
alignment of compensation.
The range of possible pay awards available to
Executive Directors under the Remuneration
Policy was clearly set out in the 2020 Directors’
Remuneration Report on pages 90 to 93.
An overview of how the structure of the
Remuneration Policy and specific performance
metrics align with Jupiter’s business strategy and
culture is set out in the Committee Chairman’s
statement.
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GOVERNANCE
Engagement with shareholders
Shareholder and investor bodies provided
constructive input and engagement as the new
policy was developed last year. Shareholders
showed their support in approving both the
Remuneration Policy and the DRR at the 2021
AGM with, respectively, 95% and 97% of votes
cast in favour.
There were no material concerns raised by
shareholders following publication of the 2020
DRR and therefore specific engagement with
shareholders during 2021 was largely limited to
the Remuneration Policy review for that year.
As stated in the Committee Chairman’s letter, the
Committee welcomes feedback at any point in
time from our entire shareholder base regarding
our remuneration arrangements.
Operation of Remuneration Policy
A description of how the Committee assesses the
quantum of the bonus scorecard outcomes in the
context of the overall corporate performance
and experience of shareholders and clients is
provided separately on pages 110 and 111.
Statements regarding the Committee’s use of
discretion in regards to the bonus outcomes for
2021 and the testing of the LTIP performance
conditions ending in 2021, which vest in March
2022, are included on pages 112 and 113
respectively.
Remuneration decisions made by the Committee
in relation to the Executive Directors also take
into account a range of additional factors
including internal relativities (details of our CEO
pay ratio are on page 124) and relevant external
market data.
Wider workforce pay and engagement
The Remuneration Committee is closely involved
in considering the remuneration policies and pay
levels of the wider Jupiter workforce. The
Committee’s work involves debate, discussion
and ultimate approval of the Company-wide
variable compensation spend as well as the salary
increase budget for the whole workforce, with
consideration given to the amounts and
proportions of total spend allocated to different
areas of the business. Part of this discussion
requires an assessment of the financial KPIs of the
business, including underlying PBT, which is also a
key metric under the bonus scorecard for
Executive Directors.
The Committee is provided with data illustrating
the mean and median bonus levels and salary
increase percentage split by gender for the
current and previous performance year, in order
that it can also analyse the outcomes from a
gender pay perspective. More details can be
found in our separate Gender Pay Gap Report.
One of the recurring exercises undertaken by the
Committee on an annual basis is a review of
external compensation benchmarking data, giving
an overview of fixed and total compensation
levels for all employees relative to the wider
market. This data allows the Committee to
challenge pay decisions at a more granular level,
and make proposals to management in respect of
the upcoming pay round.
The Committee approves all compensation for
Code Staff, including for fund managers. Whilst
this process is a regulatory requirement, it
involves a detailed and robust discussion,
including with the CIO, in relation to the financial
and non-financial considerations for determining
fund manager bonuses.
Jupiter also has an established employee
representation forum (Connections), whose
Chairman meets with the Board regularly. This
engagement is Jupiter’s method for ensuring a
formal dialogue exists between employees and
the Board. It provides the opportunity for
employees to engage with the Board on any
relevant employee matters, including pay.
Collectively this work helps demonstrate the
Committee’s considerations in appropriately
balancing the pay outcomes for the wider
employee population with its decisions regarding
executive pay.
During the year an internal evaluation of the
Committee’s effectiveness was undertaken, the
process for which can be found on page 85.
An update on the actions arising from the 2020
Board evaluation are detailed below, together
with an overview of the outcomes from the 2021
evaluation.
2020 priorities 2021 status
Ensuring that appropriate metrics,
focused on ESG and cultural matters,
were included in the bonus
scorecards and objectives.
CSR metrics relating to the Group’s ESG credentials, progress
towards diversity and inclusion targets and the firm’s culture,
all formed part of the bonus scorecard. Given the
importance of this matter to our stakeholders, this will
remain an area of focus for 2022.
Ensuring a collegial approach to
preparation for meetings between
management, the Committee’s
advisers and the Committee
Chairman.
This has improved during the year and the meetings are held
between management, the Committee Chairman, Secretary
and, where appropriate, the Committee’s advisors in
advance of the papers being circulated. This ensures papers
are of a high standard and enables the incorporation of any
comments. Further work will be undertaken to ensure that
papers are circulated in a timely manner.
2021 evaluation conclusions
The evaluation process found that the Committee is generally operating effectively with very
positive scores for the Committee Chairman’s leadership style, effectiveness of the agenda and
debate, and respondents particularly commended the management of the 2021 Directors
Remuneration Policy Review. The Committee identified a number of priorities for 2022:
• In light of the recent change in key personnel supporting the Committee, ensure effective working
relationships are developed between all parties and continue to drive improvements to papers;
• Ensure effective implementation of IFPR;
• Consider wider remuneration practices, in light of the demand for talent, to ensure we can
continue to retain and attract talented individuals aligned with our culture.
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Implementation in 2021
Single total figure
Executive Directors’ 2021 and 2020 remuneration (audited information)
Andrew Formica Wayne Mepham Edward Bonham Carter
]
2021
£’000
2020
£’000
2021
£’000
2020
£’000
2021
£’000
2020
£’000
A. Fixed pay
Base salary 455 446 315 300 42 114
Taxable benefits
2
8 4 4 3 1 3
Pension
3
60 59 42 40 6 14
Total fixed remuneration 523 509 361 343 49 131
B. Annual bonus
Annual bonus:
Delivered in cash 410 311 167 121 6 37
Delivered in shares/fund units vesting immediately with
six-month holding period
410 311 167 120 6 36
Delivered in shares/fund units vesting over three years 819 622 334 241 13 74
Total bonus
4
1,639 1,244 668 482 25 147
C. Vesting of LTIP awards
5
For performance in multi-year periods:
2018 award (2018-2020)
6
– – – – – 55
2019 award (2019-2021)
7
350 – – – – –
Total value of LTIP vesting 350 – – – – 55
D. Other
SIP matching and free shares 2 2 2 2 1 1
Sharesave award – 4 – 7 – –
Total other 2 6 2 9 1 1
Total variable remuneration (B+C+D) 1,991 1,250 670 491 27 203
Total remuneration (A+B+C+D)
8
2,514 1,759 1,031 834 75 334
1. 2021 figures for Edward Bonham Carter represent the pro-rated period of the performance year up to 6 May 2021 on which date he stepped down from the Board.
2. Comprising private medical and dental insurance and reimbursement of reasonable expenses incurred in the performance of their duties and payment of any tax arising.
3. Represents employer pension contributions and/or cash allowance in lieu of pension contributions. There are no defined benefit arrangements. Employees with registered pension
protection or those impacted by the Tapered Annual Allowance may elect to have some or all of their pension contributions paid instead as a cash allowance, after deducting an
amount equal to the cost of employer national insurance on such cash payments. The pension amounts in the single figure table may therefore be less than 15% of the salary.
4. These amounts have been determined by the Remuneration Committee based on performance against the relevant annual bonus performance measures in respect of the relevant year.
5. The value of the LTIP awards vesting is based on the Remuneration Committee’s determination of performance against the relevant LTIP performance measures across prior multi-year
performance periods.
6. The value of the 2018 LTIP award vesting in 2020 has been restated based on the share price on the vesting date 20 March 2021 of £2.70 and vesting due to performance of 33.0%.
7. Estimated value of the 2019 LTIP award vesting in 2022 based on 30.3% vesting due to performance and average closing share price over the period 1 October to 31 December 2021 of
£2.50 (the actual vesting date is 22 March 2022). This includes £51k of accrued dividend equivalents.
8. Amount of single figure attributable to share price appreciation/(depreciation) for Edward Bonham Carter in respect of 2020 and Andrew Formica in respect of 2021 is as follows:
2020: (£38,537). This value has been restated based on the actual share price on the vesting date 20 March 2021 of £2.70.
2021: (£143,606). This value has been calculated using the average closing share price over the period 1 October to 31 December 2021 of £2.50 (the actual vesting date is 22 March 2022).
REMUNERATION REPORT continued
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GOVERNANCE
Executive Director variable pay awards for 2021 performance
Variable pay awards for 2021 performance have been determined by the Committee using the following process:
• At the start of the year, the Committee set and agree the performance metrics, relative weighting between corporate quantitative and strategic goals,
and associated targets for each performance level (threshold, target and maximum) for corporate quantitative metrics.
• The annual metrics and weightings are disclosed prospectively in the Directors’ Remuneration Report; the detailed targets are considered commercially
sensitive and are disclosed retrospectively, following the performance year end.
• Throughout the year the Committee monitor progress against the relevant performance metrics.
• Following year end, actual performance against each of the bonus metrics, is assessed as reported in the scorecard on the following pages. For
corporate quantitative metrics, this in the context of the threshold, target and maximum ranges set.
• Individual bonuses for the Executive Directors are determined utilising a scorecard. Bonuses are not formulaic and judgement is applied by the
Committee in arriving at award amounts. The Committee consider the context in which performance has been achieved, having reference to
shareholder and client experience during the year on pages 110 and 111.
• Overall variable compensation spend is considered in the context of the total compensation ratio relative to their expected ranges as previously
communicated to shareholders.
Assessing corporate quantitative performance (audited information)
The following section sets out Jupiter’s actual performance against target for the primary measures relating to profitability and investment
outperformance, which are given a 40% and 25% weighting respectively and therefore together comprised 65% of the CEO and CFO’s bonus metrics for
2021. As noted in the Committee Chairman’s statement, 100% of the Vice Chairman’s bonus was based on Group financial performance.
Performance metric Primary measure
Threshold
performance
(25% vesting)
Target
performance
(50% vesting)
Maximum
performance
(100% vesting)
Actual
performance
Percentage
outcome Commentary
Profitability Underlying PBT £139.8m £174.7m £209.6m £216.7m 100% Underlying PBT targets were established based
on the Group’s 2021 budget. The budget used
challenging inputs, including in respect of
investor demand expectations, as well as the
realisation of cost reduction targets. Revenue
from higher average assets under management,
business mix and performance fees and the
achievement of greater cost savings were
partially offset by certain cost headwinds as well
as investment to support the Group’s growth
strategy. The net impact was actual performance
in excess of the maximum.
Investment
outperformance
Proportion of mutual
funds (weighted by
AUM) achieving
performance of first or
second quartile over
one year (25% weighting)
and three years (75%
weighting).
Proportion of
segregated mandates
and investment trusts
(weighted by AUM)
achieving performance
above the benchmark
over one year (25%
weighting) and three
years (75% weighting)
40% 60% 80% 62% 55% Our investment performance has remained
strong, in particular with 58% of our mutual fund
AUM performing above median over three years
and 80% over one year. We have hit record
levels of AUM which has been driven by
investment performance. As at 31 December 2021
our AUM was £60.5bn, an increase of £1.8bn from
2020.
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Implementation in 2021
Assessing corporate strategic performance (audited information)
The following table sets out supporting commentary and information the Committee considered in assessing overall performance in each of the areas of
strategic performance identified for 2021, as well as the Committee’s overall qualitative assessment of the outcome for each metric. In conjunction with
assessment of individual performance, these measures comprise 35% of the CEO and CFO’s bonus metrics for 2021.
Performance metric 2021 Assessment Outcome
Diversification Well-targeted investment has enabled Jupiter to successfully progress its diversification strategy in 2021 by growing
its international presence, broadening its product offering and positioning itself for growth in the institutional client
market.
• Growth in international presence – this year has seen a further expansion in the breadth of international markets in
which Jupiter operates. The business has made significant inroads into the US, US Offshore and Latin American
markets, and following the Merian acquisition, is well advanced in plans to sell products to Australian institutional
investors. At the end of December 2021, 28% of our AUM came from clients based outside the UK.
• Broadening of product offering – the business has developed a robust framework to support the implementation
of SFDR framework and the new Article classifications, including both existing and the launch of new SFDR-
compliant funds such as the Article 8 – compliant Dynamic Bond ESG and the Article 9 – compliant Global Ecology
Bond which were both launched in January 2022. This was strengthened by key investment hires to support the
growth of sustainable strategies.
• Positioning for growth in institutional client market – Jupiter has developed its global consultant relationships with a
view to increasing the institutional client share of the business, a key strategic priority. These consultants are
beginning to recognise the strength of Jupiter’s franchises and it now has 15 consultant buy ratings across nine
strategies; this has more than doubled over the last twelve months.
Significantly
achieved
Corporate
social
responsibility
Two specific CSR areas were assessed by the Remuneration Committee: progress towards Diversity and Inclusion
targets and development of the Group’s ESG credentials.
2021 has seen further progress towards our Diversity and Inclusion metrics. Jupiter considers diversity and inclusion
Company-wide, by region, by function and by team, as well as at varying levels of seniority. To help build a diverse
talent pipeline, Jupiter has introduced anonymised applications for entry level talent. In a challenging year for young
people, Jupiter has almost tripled the number of entry level opportunities available for school leavers and graduates.
In respect of sustainability, we joined the NZAM Initiative, under which we have committed to operate our business
and manage all assets on a net zero emissions basis by 2050. Jupiter has also become a signatory to the UNGC, a
corporate sustainability initiative which contains ten principles on human rights, labour, environment, and anti-
corruption. This work has received public recognition during 2021 with accolades from the FT for our efforts in
reducing our core greenhouse gas emissions, from Sustainalytics for our work in reducing exposure to material ESG
risks and from Morningstar for our level of ESG commitment. At an investment level, the business continues to
expand its sustainability capabilities and our sustainability-labelled strategies now hold more than £1bn in assets under
management.
Significantly
achieved
Culture, talent
and client
During 2021, the global pandemic continued to create uncertainty across the world with a consequent impact on
clients, people and how Jupiter operates its business. The business’s agility has enabled it to adapt throughout the
pandemic, to ensure it continues to serve its clients’ best interests, look after its people, progress its strategic
initiatives and successfully navigate market volatility and the changing regulatory landscape. In particular, the Merian
integration has demonstrated the successful ability of the business to perform as an agile organisation and embrace
change.
Jupiter has delivered strong investment performance for clients in a very challenging environment, including remote
working and other ongoing challenges relating to Covid-19. Client engagement has accelerated, contributing to
increased client and internal communication to offset the loss of face-to-face contact during the year. Ongoing
work is being undertaken to ensure we optimise clients’ needs and solutions and how these are provided to clients.
Jupiter continues to focus on re-building and strengthening the culture through town halls, departmental
reconnection days and other initiatives. This includes focusing on the Group’s cultural pillars, supporting teams in
identifying with them and determining how they can be effectively deployed to benefit employees and the business.
Achieved
Operating
platform
During the year, Jupiter completed the analysis of its operating model, identifying how it needs to be structured in
the future. Going forward, operational agility will continue to remain a focus. Jupiter introduced a new flexible
working model to better accommodate the competing needs of work and family. For a second year running Jupiter
offered a £1,000 contribution for home office improvements to ensure our people were able to work in optimum
conditions. On the reopening of its London headquarters, employees returned to an office that had been redesigned
with new collaborative spaces, blending both the formal and informal to help rebuild relationships and foster
communication. 2021 has seen investment in several new technological solutions and the continued development of
the ESG hub, a bespoke data centre built to increase Jupiter’s fund managers’ ability to view and analyse our
portfolios in the context of their exposure to ESG risk.
The other key development in this area during 2021 has been the successful progression of the Merian integration, in
particular a key project was the successful streamlining of our service providers following the increase in suppliers
that came with the Merian acquisition.
Significantly
achieved
REMUNERATION REPORT continued
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GOVERNANCE
Assessing individual performance (audited information)
The following table sets out supporting commentary and information the Committee referenced in assessing individual performance of the Executive
Directors for 2021.
Executive 2021 Assessment Outcome
Andrew
Formica
Chief Executive
Officer
Andrew continued to lead Jupiter in a highly effective manner through the continuing disruption arising from
Covid-19, providing clear and decisive communications to both employees and clients. He continues to articulate
firm-wide culture, behaviours and strategic intent which resonate throughout the organisation. He has also
developed a clear and consistent corporate and stewardship approach to ESG and CSR which is reflected in the
achievements outlined on the prior page.
Andrew successfully led the Executive Committee during the year and oversaw a well-managed and planned
succession process for a number of roles. He also continued with the development of the Senior Leadership Group
(SLG) by holding the inaugural SLG conference to ensure that strategic priorities are owned and cascaded throughout
the firm. At a Board level, Andrew continues to foster a strong relationship with the Board both collectively and
individually which is both open and proactive.
A key challenge for Andrew in 2021 was to deliver a successful integration and retention of the Merian fund
management team. This has been successfully achieved.
Outstanding
Wayne
Mepham
Chief Financial
Officer
Wayne has continued to form strong relationships with the Board and the Executive Committee and was
instrumental in driving organisational redesign following the Merian acquisition resulting in a leaner and more agile
organisation with transaction and cost synergies materialised.
Wayne continues to be an ambassador to promote the cultural pillars and embody the firm-wide culture in his action
and behaviour. He has enhanced the effectiveness of governance committees and worked in conjunction with the
CRO to deliver effective risk monitoring oversight processes and reaction plans, including efficient and timely
escalation.
Wayne has led the progression of the integrated Finance, Procurement and HR operating model as well as
successfully delivering the co-sourced internal audit model, including the review of a co-source partner and the
external audit tender.
Outstanding
Determining individual Executive
Director 2021 annual bonuses
(audited information)
The 2021 annual bonus awards have been
determined by the Committee using: an
assessment of performance against the metrics
laid out in the balanced scorecard on the
previous pages; a holistic assessment of the
shareholder and client experience in the year; and
an assessment of risk and compliance underpins.
Specific conclusions reached by the Committee
were as follows:
• The Committee noted the good progress in
Jupiter’s financial results, which now include a
full year contribution from the acquisition of
Merian in 2020.
• Underlying PBT bonus targets had been set in
Q1 2021 relative to a stretching budget in the
prevailing market conditions.
• The Committee agreed that Jupiter continues
to be agile and that the client-centric approach
that embodies its culture continues to deliver
strong investment performance in products
that are relevant to its clients’ changing needs.
Jupiter’s 2021 AUM ended the year at £60.5bn, a
£1.8bn increase on the prior year despite £3.8bn
of net outflows. This is a record level of
year-end AUM for Jupiter, driven by strong
investment performance.
• Jupiter has made significant progress towards
delivering on strategic goals, reinforcing strong
foundations and investing in areas that are
important to deliver long-term growth.
• Jupiter has remained focused on cost control.
During the year, Jupiter implemented changes
to its operating model, restructuring to
position resources in areas of growth ensuring
that the operating model is appropriately
resourced with long-term strategic partners
positioning the business to pivot to growth.
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Jupiter Fund Management plc | Annual Report and Accounts 2021
2021 Executive Director bonus outcomes (audited information)
2021 scorecard performance metric
Outcome (as
percentage of
maximum) Weighting
Weighted
percentage of
maximum
Andrew Formica,
Chief Executive
Officer £’000
Wayne Mepham,
Chief Financial
Officer £’000
Edward Bonham
Carter, Vice
Chairman £’000
Profitability 100% 40% 40% 773 315
Profitability
1
100% 61.5% 61.5% 19
Investment outperformance 55% 25% 13.8% 266 108
Investment outperformance
1
55% 38.5% 21.2% 6
Strategic goals and personal performance 88.6% 35% 31% 599 244 –
Totals 1,639 668 25
Outcome as percentage of maximum
2
84.8% 84.8% 82.7%
Delivered as upfront cash 410 167 6
Delivered as share options with six-month holding period 410 167 6
Delivered as share options vesting over three years 819 334 13
1. As noted in the Committee Chairman’s statement Edward Bonham Carter’s 2021 bonus has been determined wholly on the Group’s financial performance.
2. Maximum opportunity for the annual bonus is 425% of salary for the CEO, 250% of salary for the CFO and 75% of salary for the Vice Chairman.
Overall compensation spend
Jupiter’s overall variable compensation spend is determined appropriate and affordable in the context of Jupiter’s overall performance. We aim to balance
and align the interests of our staff and our shareholders.
The variable compensation spend is assessed in its financial reporting context, which considers the accounting treatment of the variable compensation
spend. In addition, the Committee considers the total compensation expense, which includes the fixed component of remuneration as well as the variable.
The variable compensation expense is determined by the nature and extent of bonuses awarded in 2021 as well as deferred awards (including LTIP) made in
prior years. It also includes national insurance charges levied on Jupiter in relation to variable compensation. The 2021 underlying variable compensation
expense of £140m (including performance fees) resulted in a total compensation ratio of 37%. Excluding performance fees the underlying variable
compensation expense is £79.1m, resulting in a total compensation ratio of 33%, which remains within the range previously communicated to shareholders.
Non-Executive Directors’ 2021 and 2020 fees (audited information)
Nichola Pease Jonathon Bond Polly Williams Roger Yates
2
Karl Sternberg David Cruickshank
3
Dale Murray
3
2021
£’000
2020
£’000
2021
£’000
2020
£’000
2021
£’000
2020
£’000
2021
£’000
2020
£’000
2021
£’000
2020
£’000
2021
£’000
2022
£’000
2021
£’000
2020
£’000
Fees 235 196 32 92 94 94 102 85 79 75 42 – 24 –
Benefits
1
– – – – – – – – – – – – – –
Total 235 196 32 92 94 94 102 85 79 75 42 – 24 –
1. Benefits comprise reimbursement of reasonable taxable business expenses incurred in the performance of duties and the payment of any tax arising.
2. Year on year increase is due to Roger Yates appointment as Senior Independent Director in 2021.
3. Both David Cruickshank and Dale Murray joined the Board in 2021, the fees are therefore pro-rated.
Chris Parkin is not paid any fees in conjunction with his appointment to the Board.
REMUNERATION REPORT continued
Implementation in 2021
• The bonus outcomes for Executive Directors
were in line with the overall variable
compensation experience for other
employees of the Group.
• There were no risk or regulatory compliance
issues at a Group or individual level for which
the Committee considers it appropriate to
make any variable compensation adjustments
for Executive Directors.
In consideration of the above, the Committee
was therefore satisfied that the balanced
scorecard was a fair outcome consistent with the
shareholder, client and wider workforce
experience during the year. It has therefore
made no discretionary adjustments to the bonus
scorecard outcomes.
A summary of the Committee’s conclusions is set
out in the bonus outcomes table below.
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Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
Performance condition testing for 2019 LTIP award, vesting 22 March 2022 (audited information)
The LTIP award vesting figure for Andrew Formica of £350k (inclusive of £51k of accrued dividend equivalents) shown in the single total figure on page 108 is
due to vest on 22 March 2022, subject to two equally weighted performance conditions measured to 31 December 2021. The performance conditions have
been tested and performance against those conditions and the associated level of vesting are outlined below. The Committee is satisfied that the vesting
outcome is appropriate in the context of the overall shareholder and client experience and has not exercised any discretion in relation to the testing of
the performance conditions.
Performance condition Performance against the condition over the performance period Proportion of condition vesting
Underlying EPS growth
• 0% vesting for 5% growth or below;
• 100% vesting for 25% growth or above; and
• Straight-line vesting between these points.
Jupiter’s underlying EPS fell by 3.4% over the
performance period inclusive of performance fees and
fell by 2.1% exclusive of performance fees.
Jupiter’s underlying EPS growth over the performance
period did not therefore exceed the 5% threshold.
0.0% of condition vesting
(0.0% of total award)
Investment outperformance
1
The proportion of all of Jupiter’s assets (weighted by AUM)
achieving above median performance relative to their peer
group (retail) or above benchmark performance (institutional)
weighted:
• 25% over the three-year period to 31 December preceding
the vesting date; and
• 75% over the five-year period to 31 December preceding
the vesting date.
• 0% vesting for less than 50%;
• 25% vesting for 50%;
• 100% vesting for 80%; and
• Straight-line vesting between these points.
Jupiter’s investment performance was such that:
• 57.8% of funds (weighted by AUM) performed above
median or above the benchmark over the three-year
period to 31 December 2021; and
• 66.3% of funds (weighted by AUM) performed above
median or above the benchmark over the five-year
period to 31 December 2021.
On a weighted basis, 64.2% of funds performed above
median or above the benchmark.
60.5% of condition vesting
(30.3% of total award)
Total 30.3% vesting
1. Investment performance of mutual fund AUM outperforming the median uses Morningstar as the single source of relative investment performance data for all funds.
External directorships
Executive Directors are not permitted to hold
external directorships or offices without the
Board’s prior approval. During the year two
Executives held non-executive director positions
with other companies. Andrew Formica served as
Non-Executive Director on the Board of
Hammerson plc. This role was held by Andrew
prior to his appointment to Jupiter, and the Board
agreed Andrew could continue serving. During
2021, Andrew received fees of £66,500 from
Hammerson plc.
Edward Bonham Carter served as a Non-
Executive Director of Land Securities Group plc,
for which he was paid fees of £29,704. Edward
also served as the Senior Independent Director to
the Board of ITV plc; his fees from this position
for 2021 were £33,276. The fees for both Land
Securities Group plc and ITV plc are for the
period 1 January 2021 to 6 May 2021 when Edward
was an Executive Director of the Company.
In all instances Andrew and Edward have been
permitted to retain their fees for these
appointments.
Payments to exiting Directors (audited
information)
No new payments were made to any exiting
Directors during 2021.
Payments to former Directors (audited
information)
Edward Bonham Carter stepped down from the
Board on 6 May 2021 but continued to work for
the Company as Director of Stewardship and
Corporate Responsibility. In that role, he
continues to receive a salary, pension provision
and annual bonus (respectively £78k, £10k and
£49k in relation to the remainder of 2021).
Edward’s outstanding share awards will continue
to vest on their original terms. He did not receive
an LTIP for 2021.
Payments for loss of office (audited
information)
No payments were made for loss of office in
2021.
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Jupiter Fund Management plc | Annual Report and Accounts 2021
2022 balanced scorecard
Area Metric Performance measures
Corporate
quantitative
(65%)
Profitability • Measured through underlying PBT
Investment
outperformance
• Measured through the proportion of mutual funds achieving first or second quartile performance and
the proportion of separate account assets beating their benchmarks (weighted by AUM)
• Measured over one year (25% weighting) and three years (75% weighting)
Strategic and
individual (35%)
Client relationships • Evidence of diversification of client relationships, deepening client relationships through client longevity
and cross-selling
Investment products • Diversification of investment products, new product launches and rationalisation of product range
Talent and culture • Embed, develop and measure the firm’s culture, attract and retain high-quality talent and achieve high
levels of client satisfaction
Operating model • Enhancing our investment capabilities and creating initiatives to optimise operational design and manage
costs, increasing agility in the organisation
• Continue to develop technology and office environment to support ways of working
Sustainability • Ensuring our products and platform are best in class for Environmental, Social and Governance (ESG)
• Becoming a sustainability leader in the industry
Institutional • Developing and widening our institutional clients as well as building on our existing offerings
Overseas markets • Qualitative assessment of actions taken to expand or develop our geographical diversification, including
supporting areas of geographical growth over the long term
Corporate Social
Responsibility
• Evidence of progression towards Diversity and Inclusion targets
• Further develop the ESG credentials of the Group
Personal performance • Achievement against specific personal performance objectives
Underpin Risk and regulatory
compliance
• The Committee considers the checkpoints set out on page 122 when exercising its judgement to
determine the appropriate variable compensation pool, at a Group level
• The Committee also receives an annual report on internal control and risk management factors from
the CRO to consider when assessing appropriate awards, at an individual level
• Any risk or compliance factor (corporate or individual) has the potential to reduce variable
compensation, including to zero
REMUNERATION REPORT continued
Implementation in 2022
The following section provides an overview as to
how each element will be applied in 2022.
Base salary
The CEO’s base salary will remain at £455,000. The
CFO’s base salary will increase by 4.8% in 2022 to
£330,000 as disclosed in the 2020 Directors’
Remuneration Report.
• Andrew Formica: £455,000 (2021: £455,000);
• Wayne Mepham: £330,000 (2021: £315,000).
Annual bonus
Annual bonuses in respect of 2022 (inclusive of
any deferred bonus award) will continue to be
subject to the following individual caps as a
percentage of base salary in line with the new
Remuneration Policy:
• Andrew Formica: 425%;
• Wayne Mepham: 250%.
The 2022 bonuses will be determined on the
normal timetable and in line with the process
below.
The performance measures for the 2022 annual
bonus will be set within the following balanced
scorecard. 65% of these measures will be
corporate quantitative measures, with clearly
determined ‘Threshold’, ‘On-Target’ and
‘Maximum’ goals. The remaining objectives will be
strategic and individual measures.
Determination of bonus amounts is not formulaic;
in addition to reviewing each of the performance
measures, the Committee will take a holistic view
of the overall performance of the Company for
the year to ensure that any bonus amounts
appropriately reflect the experience of
shareholders. Where performance measures
produce an outcome which does not align with
that of shareholders, the Committee may
exercise its discretion as it considers appropriate.
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GOVERNANCE
Proportion of bonus and delivery method
The payment of bonuses for Executive Directors for 2022 will be as follows and is compliant with the relevant remuneration regulations.
25% 25% 50%
• Delivered as cash. • Delivered as either deferred Jupiter shares or deferred fund
units in a Jupiter fund. Choice between these can be made
by the Executive Director nearer the payment date.
• Immediate vesting, but subject to a subsequent six-month
post-vesting holding period.
• Delivered as either deferred Jupiter shares and/or deferred
fund units in a Jupiter fund. Choice between these can be
made by the Executive Director nearer the payment date.
Where the Executive Director has not yet met the minimum
shareholding requirement, deferral into fund units will be
restricted to 25% of this portion of the bonus.
• Vesting in equal tranches over three years, but subject to a
subsequent six-month post-vesting holding period.
LTIP awards
The 2022 LTIP awards will be subject to the following performance conditions.
Proportion of LTIP Performance condition Performance measure Outcome
40%
Underlying EPS Growth
1
Jupiter’s underlying EPS must achieve at least 5%
growth over the performance period
Jupiter’s underlying EPS growth over
the performance period
Less than 5% growth
25% growth or above
Any other percentage
Proportion of the award subject
to the EPS performance condition
that will vest
0%
100%
Sliding scale between the relevant
percentages above
30%
Jupiter’s investment outperformance
The proportion of all of Jupiter’s assets (weighted by
AUM) achieving above median performance relative
to their peer group (retail) or above benchmark
performance (institutional) weighted:
25% over the three-year period to 31 December
preceding the vesting date; and
75% over the five-year period to 31 December
preceding the vesting date
Proportion of funds (weighted
by AUM) achieving above median/
benchmark performance
Less than 50%
50%
80% or above
Any other percentage
Proportion of the award subject
to the investment
outperformance condition that
will vest
0%
25%
100%
Sliding scale between the relevant
percentages above
30%
Net flows
Cumulative net flows for the Group over the
performance period
Net flows over the performance period
Less than £1.5bn
£1.5bn
£4.5bn or above
Any other percentage
Proportion of the award subject
to the net flows performance
condition that will vest
0%
25%
100%
Sliding scale between the relevant
percentages above
1. Due to their volatility, performance fees will be excluded from the EPS growth calculation for future LTIP awards. For consistency, this will also be applied to the Executive Directors
inflight LTIP awards although the vesting level will not be permitted to exceed the original calculation including performance fees.
Targets for each performance measure will be set
by the Committee in line with the framework
described on page 105. The Committee considers
more specific details of the 2022 performance
measures and targets to be commercially
sensitive and therefore further details of the
targets and weightings for each of these
measures and performance against each will be
provided in the 2022 Directors’ Remuneration
Report.
The determination of variable pay awards in
relation to 2022 performance will continue to be
assessed with the application of judgement,
taking into account a holistic assessment of
Group and individual performance. The balanced
scorecard, set out in the table on page 112, will
allow the Committee to assess performance
against key financial and strategic metrics. The
Committee’s assessment against these metrics
and the decision about any variable pay awards
will be clearly disclosed to shareholders.
In addition to the performance measures outlined
on the previous page, the Committee considers
the checkpoints set out on page 122 when
exercising its judgement to determine the overall
variable compensation spend for any particular
year, and also considers individual risk behaviours
when assessing individual awards.
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Jupiter Fund Management plc | Annual Report and Accounts 2021
Non-Executive Director fees, roles and committee responsibilities
Jupiter normally reviews Non-Executive Director fees annually. The Non-Executive Chairman’s fee and fees for certain Non-Executive roles were last
increased with effect from 1 January 2018 and 1 January 2019 respectively. Fees for chairing the Audit and Risk Committee and Remuneration Committee
were last increased with effect from 1 January 2020. No increases are proposed for the 2022 financial year.
2021
annual fee
2022
annual fee
Base fee £64,000 £64,000
Senior Independent Director fee £12,500 £12,500
Audit and Risk Committee Chairman fee (in addition to member fee) £22,000 £22,000
Remuneration Committee Chairman fee (in addition to member fee) £22,000 £22,000
Audit and Risk Committee member fee £7,500 £7,500
Remuneration Committee member fee £7,500 £7,500
Non-Executive Chairman fee (all inclusive) £235,000 £235,000
Non-Executive Directors are reimbursed for reasonable business expenses.
The roles and committee responsibilities of the Non-Executive Directors during 2021 were as follows:
Director Title Roles and committee responsibilities
Nichola Pease Independent Chairman Nomination Committee Chairman
Remuneration Committee member
Jonathon Bond Independent Non-Executive Director (stepped down 6 May 2021)
Senior Independent Director
Senior Independent Director
Audit and Risk Committee member
Nomination Committee member
Remuneration Committee member
Polly Williams Independent Non-Executive Director Audit and Risk Committee Chairman
Nomination Committee member
Karl Sternberg Independent Non-Executive Director Audit and Risk Committee member
Nomination Committee member
Remuneration Committee member
Roger Yates Independent Non-Executive Director
Senior Independent Director (from 6 May 2021)
Senior Independent Director
Nomination Committee member
Remuneration Committee Chairman
Chris Parkin Non-Executive Director Board member
David Cruickshank Independent Non-Executive Director (appointed 1 June 2021) Audit and Risk Committee member
Nomination Committee member
Dale Murray Independent Non-Executive Director (appointed 1 September 2021) Audit and Risk Committee member
Nomination Committee member
REMUNERATION REPORT continued
Implementation in 2022
LTIP awards continued
These awards will be granted in March 2022 and
will vest on the third anniversary of grant, subject
to the achievement of the stretching
performance conditions, as set out in the table
on the previous page. The awards will also be
subject to a two-year post-vesting holding period
in line with the Remuneration Policy.
The 2022 LTIP award values will be as follows:
• Andrew Formica: £1,706,250 (375% of salary);
• Wayne Mepham: £742,500 (225% of salary).
Investment outperformance is critical to Jupiter’s
clients and the Company’s long-term success. Its
importance is recognised through its use as a
performance measure within the annual bonus
scorecard and the LTIP. Given the longer time
horizon over which LTIP assesses performance,
both a three- and five-year outperformance
measure are included.
EPS growth is important to shareholders and is
the best measure of Jupiter’s successful execution
of its growth strategy.
There is no payout under this performance
condition at threshold performance, or where
EPS growth is less than 5% over the period.
Net flows are a strong indicator of client
confidence in Jupiter’s products, and are a key
determinant of changes in future revenue
streams for the business.
In addition to a risk and compliance assessment,
LTIP awards are subject to an underlying business
performance underpin. The Committee will
compare the vesting outcome for LTIP awards
against shareholder and client experience over
the same performance period.
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GOVERNANCE
Directors’ shareholdings (audited information)
Director
Ordinary shares
held at
31 December 2021
(no restrictions)
Unvested ordinary
shares held at
31 December 2021
(subject to
continued
employment)
Total
ordinary shares
held at
31 December
2021
Vested but
unexercised
options at
31 December
2021
Unvested
options, vesting
not subject to
performance
conditions at
31 December
2021
Unvested
options, vesting
subject to
performance
conditions at
31 December
2021
Total options
over ordinary
shares held at
31 December
2021
Shareholding as
a percentage
of salary
3
Shareholding as a
percentage
of salary
including vested
and unvested
share options
Andrew Formica 1,121,586 4,210 1,125,796 – 357,676 1,742,074 2,099,750 618% 722%
Wayne Mepham 70,422 1,894 72,316 – 184,636 519,224 703,860 57% 140%
Edward Bonham Carter
1
10,037,409 3,889 10,041,298 104,179 50,399 118,227 272,805 20,889% 21,106%
Nichola Pease 32,050 – 32,050 – – – – – –
Jonathon Bond
2
29,794 – 29,794 – – – – – –
Polly Williams – – – – – – – – –
Roger Yates 225,000 – 225,000 – – – – – –
Karl Sternberg 28,601 – 28,601 – – – – – –
David Cruickshank 30,000 – 30,000 – – – – – –
Dale Murray 40,000 – 40,000 – – – – – –
Chris Parkin
4
– – – – – – – – –
1. Figures for Edward Bonhan Carter are as at 6 May 2021, the date he stepped down as a Director.
2. Figures for Jonathon Bond are as at 6 May 2021, the date he stepped down as a Director.
3. The high percentage of shares held by Edward Bonham Carter relates to shares purchased during the period 2007-2010 while Jupiter was privately owned.
4. Chris Parkin is a nominated representative of TA Associates, which currently holds 84,115,278 (15%) shares in Jupiter.
There have been no changes to the above interests between the year end and 24 February 2022 (the latest practicable date before the printing of the
Annual Report and Accounts).
Minimum shareholding requirements (audited information)
Executive Directors should maintain a significant holding of shares in the Company. The Remuneration Policy in operation for the 2021 performance year
provided that the CEO should hold shares in the Company with a value equivalent to at least 500% of base salary, and other Executive Directors a value
equivalent to at least 250% of base salary. The Committee expects Executive Directors to build up their required shareholding within five years from
appointment to the Board, and is satisfied with the progress of all Executive Directors against this.
Post-employment shareholding requirements
Under the Directors’ Remuneration Policy and in line with the Corporate Governance Code requirements, the Committee has introduced a formal
post-employment shareholding requirement for Executive Directors. Executive Directors will be required to maintain a meaningful shareholding for two
years after stepping down as a Director, specifically shares worth 500% of salary for the CEO and 250% of salary for other Directors in the first year,
decreasing to 250% of salary for the CEO and 125% of salary for other Directors in the second year after stepping down.
Directors’ service contracts unexpired terms
The Executive Directors are the only Directors with service contracts, none of which contains an expiry term. The CEO has a 12-month notice period. The
CFO has a six-month notice period.
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Share awards (audited information)
DBP – options over Jupiter shares
Options held at start of year Options granted during the year
Options exercised/lapsed
during the year Options held at end of year
Director
Year
granted
Number of
shares under
option held
as at 1 January
2021 including
dividend
adjustments
1,2
Market
value
per share
at date
of grant
3
Grant
date
Face
value at
award
Price
used to
determine
number
of shares
3
Number
of shares
under
option
1,2
Number
of shares
under
option
lapsed
during
the year
Number
of shares
under
option
exercised
during
the year
Number
of shares
under
option held
as at
31 December
2021
Earliest
exercise
date
Latest
exercise
date
Andrew
Formica
2020
(in respect
of 2019)
51,353 £3.11 – – – – – 54,874
4
– 5 Sept
2021
5 March
2022
51,353 £3.11 – – – – – – 54,874 5 Sept
2022
5 March
2023
51,354 £3.11 – – – – – – 54,876 5 Sept
2023
5 March
2024
2021
(in respect
of 2020)
– – 9 March
2021
£621,800 £2.82 79,005 – – 79,005 9 Sept
2022
9 March
2023
79,005 – – 79,005 9 Sept
2023
9 March
2024
79,007 – – 79,006 9 Sept
2024
9 March
2025
2021
(in respect
of 2020)
– – 9 March
2021
£310,900 £2.82 118,509 – 118,509
5
51,354 5 Sept
2021
9 March
2022
Wayne
Mepham
2019
(Buyout
Award)
12,518 £3.43 – – – – – 12,518
6
– 1 March
2021
1 Sept
2021
2019
(Buyout
Award)
21,514 £3.43 – – – – – – 22,989 1 March
2022
1 Sept
2022
2020
(in respect
of 2019)
24,114 £3.11 – – – – – 25,767
7
– 5 Sept
2021
5 March
2022
24,114 £3.11 – – – – – – 25,767 5 Sept
2022
5 March
2023
24,116 £3.11 – – – – – – 25,769 5 Sept
2023
5 March
2024
2021
(in respect
of 2020)
– – 9 March
2021
£241,175 £2.82 30,643 – – 30,643 9 Sept
2022
9 March
2023
30,643 – – 30,643 9 Sept
2023
9 March
2024
30,644 – – 30,644 9 Sept
2024
9 March
2025
2021
(in respect
of 2020)
– – 9 March
2021
£120,588 £2.82 45,965 – 45,965
8
– 9 Sept
2021
9 March
2022
REMUNERATION REPORT continued
118
Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
Options held at start of year Options granted during the year
Options exercised/lapsed
during the year Options held at end of year
Director
Year
granted
Number of
shares under
option held
as at 1 January
2021 including
dividend
adjustments
1,2
Market
value
per share
at date
of grant
3
Grant
date
Face
value at
award
Price
used to
determine
number
of shares
3
Number
of shares
under
option
1,2
Number
of shares
under
option
lapsed
during
the year
Number
of shares
under
option
exercised
during
the year
Number
of shares
under
option held
as at
31 December
2021
Earliest
exercise
date
Latest
exercise
date
Edward
Bonham
Carter
2018
(in respect
of 2017)
33,737 £4.90 – – – – – – 33,737 20 March
2021
20 Sept
2021
2019
(in respect
of 2018)
9,188 £3.52 – – – – – 9,188
9
– 22 Sept
2020
22 March
2021
9,188 £3.52 – – – – – – 9,188 22 Sept
2021
22 March
2022
9,190 £3.52 – – – – – – 9,190 22 Sept
2022
22 March
2023
2020
(in respect
of 2019)
11,315 £3.11 – – – – – 11,315
10
– 5 Sept
2020
5 March
2021
2020
(in respect
of 2019)
7,543 £3.11 – – – – – – 7,543 5 Sept
2021
5 March
2022
7,543 £3.11 – – – – – – 7,543 5 Sept
2022
5 March
2023
7,545 £3.11 – – – – – – 7,545 5 Sept
2023
5 March
2024
2021 (in
respect of
2020)
– – 9 March
2021
£73,575 £12.82 8,707 – – 8,707 9 Sept
2022
9 March
2023
8,707 – – 8,707 9 Sept
2023
9 March
2024
8,707 – – 8,707 9 Sept
2024
9 March
2025
2021 (in
respect of
2020)
– – 9 March
2021
£36,788 £12.82 13,060 – – 13,060 9 Sept
2021
9 March
2022
1. Outstanding share awards granted in 2019, 2020 and 2021 were adjusted by 4.35% as a result of the 14 May 2021 Final and Special Dividend. See overleaf.
2. Outstanding share awards granted in 2019, 2020 and 2021 were adjusted by 2.95% as a result of the 1 September 2021 Interim Dividend.
3. Average closing share price from the three trading days prior to date of grant.
4. Closing share price on date of exercise, 20 September 2021, was £2.43. This resulted in a value of shares on exercise of £133,124.
5. Closing share price on date of exercise, 20 September 2021, was £2.43. This resulted in a value of shares on exercise of £287,503.
6. Closing share price on date of exercise, 2 March 2021, was £2.76. This resulted in a value of shares on exercise of £34,574.
7. Closing share price on date of exercise, 10 September 2021, was £2.60. This resulted in a value of shares on exercise of £66,891.
8. Closing share price on date of exercise, 10 September 2021, was £2.60. This resulted in a value of shares on exercise of £119,325.
9. Closing share price on date of exercise, 17 March 2021, was £2.75. This resulted in a value of shares on exercise of £25,169.
10. Closing share price on date of exercise, 5 March 2021, was £2.78. This resulted in a value of shares on exercise of £31,470.
119
Jupiter Fund Management plc | Annual Report and Accounts 2021
DBP – options over Jupiter fund units
Options held at start of year Options granted during the year Options held at end of year
Director
Year
granted
Number of
fund units
under option
held as at
1 January 2021
Market
value
per unit
at date
of grant
1
Grant
date
Face
value at
award
Price
used to
determine
number
of units
Number
of units
under
option
Number of
units under
option
held as at
31 December
2021
Earliest
exercise
date
Latest
exercise
date
Wayne
Mepham
2019
(Buyout
Award)
35,259 £1.11 – – – – – 1 March
2021
1 Sept
2021
2019
(Buyout
Award)
2,107 £27.52 – – – – 2,107 1 March
2022
1 Sept
2022
1. Average closing unit price from the three trading days prior to the date of grant.
Key terms:
• No performance measures are attached to options granted under the DBP, although awards are normally subject to continued employment with the Company;
• Malus and clawback provisions may apply (see the Remuneration Policy table for further details);
• No exercise price is payable on the exercise of DBP options; and
• Holders of unvested share option awards are not entitled to cash dividend payments as the holders are not the legal owners of the shares. The Remuneration Committee determined
that it was appropriate for holders of share option awards to benefit from dividends declared in 2021 as follows, as permitted under the relevant plan rules:
For awards granted in 2019, 2020 and 2021 under the DBP and between 2018 and 2021 under the LTIP schemes, an upwards adjustment to the number of shares over which options were
held by a factor of 4.35% and 2.95% in respect of the 14 May 2021 Special and Final Dividend and 1 September 2021 Interim Dividend respectively. These factors are equivalent to the
value the holder of a share option award would have received had they been entitled to receive the Final and Interim Dividends as cash payments.
LTIP – options over Jupiter shares
Options held at start of year Options granted during the year
Options exercised/lapsed
during the year Options held at end of year
Director
Year
granted
Number of
shares under
option held
as at 1 January
2021 including
dividend
adjustments
1,2
Market
value
per share
at date
of grant
3
Grant
date
Face
value at
award
Price
used to
determine
number
of shares
3
Number
of shares
under
option
1,2
Number
of shares
under
option
lapsed
during
the year
Number
of shares
under option
exercised
during
the year
Number
of shares
under option
held as at
31 December
2021
Earliest
exercise
date
Latest
exercise
date
Andrew
Formica
2019 433,033 £3.52 – – – – – – 462,107
5
22 March
2024
22 Sept
2024
2020 589,160 £3.11 – – – – – – 629,572 5 March
2025
5 Sept
2025
2021 9 March
2021
£1,706,250 £2.82 650,395 – – 650,395 9 March
2026
9 Sept
2026
Wayne
Mepham
2020 233,074 £3.11 – – – – – – 233,074 5 March
2025
5 Sept
2025
2021 9 March
2021
£708,750 £2.82 270,164 – – 270,164 9 March
2026
9 Sept
2026
Edward
Bonham
Carter
6
2016 28,382 £4.09 – – – – – 28,382
4
– 1 April
2019
1 April
2021
2017 20,443 £4.21 – – – – – – 20,443 29 March
2020
29 March
2022
2018 61,239 £4.61 – – – – 41,031 – 20,208 20 March
2023
20 Sept
2023
2019 56,075 £3.52 – – – – – – 56,075
5
22 March
2024
22 Sept
2024
2020 62,152 £3.11 – – – – – – 62,152 5 March
2025
5 Sept
2025
1. Outstanding share awards granted in 2019, 2020 and 2021 were adjusted by 4.35% as a result of the 14 May 2021 Final and Special Dividends.
2. Outstanding share awards granted in 2019, 2020 and 2021 were adjusted by 2.95% as a result of the 1 September 2021 Interim Dividend.
3. Average closing share price from three trading days prior to date of grant.
4. Share price on date of exercise, 17 March 2021, was £2.74. This resulted in a value of shares on exercise of £77,767.
5. The 2019 LTIP shares under option have not been adjusted for the performance conditions as at 31 December 2021.
6. The number of shares under option as at 31 December 2021 for Edward Bonham Carter are as at 6 May 2021, the date he stepped down from the Board.
REMUNERATION REPORT continued
120
Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
Key terms:
• Performance conditions for LTIP awards granted in 2016 and 2017 are: underlying EPS, net sales, investment outperformance and strategic goals, all equally weighted. These performance
conditions are measured over the period 1 January in the year of grant to 31 December in the year prior to vesting.
• Performance conditions for LTIP awards granted in 2018, 2019 and 2020 are: 50% EPS growth and 50% investment outperformance.
• The targets and vesting schedule for EPS are as follows: For awards granted in 2018: less than 20% EPS growth over the performance period, 0% vesting; 40% EPS growth or above
over the performance period, 100% vesting; any other EPS growth percentage is subject to a sliding scale between 0% and 100%. For awards granted in 2019 and 2020: less than 5% EPS
growth over the performance period, 0% vesting; 25% EPS growth or above over the performance period, 100% vesting; any other EPS growth percentage is subject to a sliding scale
between 0% and 100%.
• The targets and vesting schedule for investment outperformance are: less than 50% of funds (weighted by AUM) achieving median/benchmark performance, 0% vesting; 50% of funds
(weighted by AUM) achieving median/benchmark performance, 25% vesting; 80% or above of funds (weighted by AUM) achieving median/benchmark performance, 100% vesting; any
other percentage of funds (weighted by AUM) achieving median/benchmark performance, a sliding scale in between the relevant percentages.
• Performance conditions for LTIP awards granted in 2021 are: 40% EPS growth, 30% investment outperformance and 30% net flows.
• The targets and vesting schedule for EPS are: less than 5% EPS growth over the performance period, 0% vesting; 25% EPS growth or above over the performance period, 100% vesting;
any other EPS growth percentage is subject to a sliding scale between 0% and 100%.
• The targets and vesting schedule for investment outperformance are: less than 50% of funds (weighted by AUM) achieving median/benchmark performance, 0% vesting; 50% of funds
(weighted by AUM) achieving median/benchmark performance, 25% vesting; 80% or above of funds (weighted by AUM) achieving median/benchmark performance, 100% vesting; any
other percentage of funds (weighted by AUM) achieving median/benchmark performance, a sliding scale in between the relevant percentages.
• The targets and vesting schedule for net flows are: less than £1.5bn over the performance period, 0% vesting; £4.5bn or more over the performance period, 100% vesting; any other
net flows between £1.5bn and £4.5bn is subject to a sliding scale between 25% and 100%.
• These performance conditions are measured over the period 1 January in the year of grant to 31 December in the year prior to vesting. Awards are subject to a two-year post-vesting
holding period.
• Malus and clawback provisions may apply (see the Remuneration Policy table for further details);
• An exercise price of £0.02 per share is payable on the exercise of LTIP options granted prior to 2018; and
• The number of shares under award granted in 2018, 2019 and 2020 were adjusted as a result of the 14 May 2021 Final and Special Dividend and the 1 September 2021 Interim Dividend, as
described under the DBP share table.
Share Incentive Plan
Shares held at start of year
Shares acquired/forfeited
during the year Shares held at end of year
Number of
shares subject
to award as at
1 January
2021
Market
value
per share
at award
1
Award
date
Face
value at
award
Price
used to
determine
number
of shares
1
Number of shares
awarded during
the year
Number of
shares
forfeited
during the
year
Number of
shares subject
to award as at
31 December
2021
Earliest
vesting
date
Andrew Formica 473 £3.80 – – – – – 473 4 April 2022
498 £3.62 – – – – – 498 7 May 2022
1,007 £1.99 – – – – – 1,007 1 April 2023
1 April 2021 £2,000 £2.79 716 – 716 1 April 2024
Wayne Mepham 1,007 £1.99 – – – – – 1,007 1 April 2023
1 April 2021 £2,000 £2.79 716 – 716 1 April 2024
Edward Bonham Carter 457 £3.28 – – – – – 457 2 May 2016
462 £3.89 – – – – – 462 2 May 2017
1 £3.50 – – – – – 1 2 Oct 2017
604 £1.99 – – – – – 604 1 April 2023
1 April 2021 £1,200 £2.79 429 – 429 1 April 2024
1. Market price on the date of purchase of SIP shares.
Sharesave – options over Jupiter shares
Options held at start of year Options granted during the year
Options lapsed
during the year Options held at end of year
Director
Year
granted
Number of
shares under
option as at
1 January
2021
Market
value
per share
at date
of grant
Grant
date
Face
value at
award
Price
used to
determine
number
of shares
1
Number
of shares
under option
Number
of shares
under option
lapsed during
the year
Number
of shares
under option
held as at
31 December
2021
Earliest
exercise
date
Latest
exercise
date
Andrew
Formica
2020 10,909 £1.65 – – – – – 10,909 1 Dec 2023 31 May 2024
Wayne
Mepham
2020 18,181 £1.65 – – – – – 18,181 1 Dec 2025 31 May 2026
1. Sharesave is an all-employee share plan operated in line with applicable tax legislation. Average closing share price from three trading days prior to date of grant, discounted by 20% in
line with the Sharesave rules applicable to all eligible employees.
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Jupiter Fund Management plc | Annual Report and Accounts 2021
Risk and reward at Jupiter
Discussion
The Committee gives careful consideration to the
linkage between risk and reward to ensure the
desired behaviours and culture are being
rewarded. This includes ensuring the reward
structures are consistent with and promote
sound and effective risk management, and
ensuring remuneration outcomes appropriately
reflect the risk profile and behaviours of the
Group and each individual. This is demonstrated
through a variety of reward features and
processes that ensure alignment to risk
considerations throughout the organisation. For
example:
• When assessing the overall variable
compensation spend as described on page 112,
the Committee considers a number of
checkpoints, as described in the checkpoints
chart on the right hand side of this page.
• For all employees there is consideration of
conduct and performance against risk and
compliance criteria, ensuring there is risk
adjustment at an individual level.
• Assessment of individual performance includes
consideration of financial and non-financial
metrics. This ensures that the way in which
performance has been achieved is taken into
account, for example, in terms of risk and
repeatability.
• All employees with bonuses of over £50,000
have a portion of bonus deferred into shares
and/or fund units. In total approximately one
quarter of employees are subject to some kind
of deferral, ensuring their interests are aligned
with the long-term success of the Group and
with the interests of clients.
• Shareholding requirements apply to Executive
Directors, further enhancing the link to the
Group’s long-term success.
• For Executive Directors all variable
remuneration is subject to malus and clawback
provisions, whereby incentive awards may be
reduced, withheld or reclaimed in certain
circumstances, including where there has been
a material failure of risk management.
In addition to the Audit and Risk Committee
feeding into the process, the CRO presents a
report to the Committee, setting out thoughts
and assurances around how the remuneration
structures and processes support sound and
effective risk management.
Checkpoints
Capital base and liquidity
Can Jupiter afford the proposed variable compensation spend?
• Sufficient liquidity to make payments?
• Consider impact on Jupiter’s capital base.
Request and consider input from the Chief Financial Officer.
Underlying financial performance
Does Jupiter’s underlying financial performance support the proposed variable
compensation spend?
• Consider performance against financial KPIs listed in the Annual Report.
• Is there any reason to believe the financial results are not a fair reflection of underlying
performance?
Request and consider input from the Audit and Risk Committee.
Risk
Does Jupiter’s risk profile and risk management support the variable compensation
spend? Are any adjustments required?
• Consideration of the Enterprise Risk Management report.
• Are all risks being suitably monitored and managed? Have there been any material failures of
risk management (or any near misses) in the year?
• Consider whether profit reflects current and future risks and timing and likelihood of future
revenues.
Request and consider input from the Chief Risk Officer and the Audit and Risk Committee.
Compliance
Have there been any material compliance breaches in the year?
• Are any adjustments required?
• Consideration of any significant compliance breaches and/or near misses.
• Consideration of any fines received in the year and any ongoing regulatory investigations.
Request and consider input from the Chief Risk Officer.
Commercial
Are there any commercial drivers to support adjustments to the variable compensation
spend?
• Consider the market for talent and whether the spend would likely result in any significant
over/underpayment against the market.
Reputational
Are there any reputational drivers to support adjustments to the variable compensation
spend?
• Has there been any reputational damage to the Group in the year?
• Will the proposed variable compensation pool quantum have any adverse reputational
impact on the Group?
Variable compensation spend and total compensation ratio approval.
REMUNERATION REPORT continued
122
Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
Dilution
Our policy regarding dilution from employee share awards is to ensure that dilution will be no more than 10% in any rolling 10-year period and no more
than 5% from employee share awards granted to Executive Directors of the Company in any rolling 10-year period.
As at 31 December 2021, share awards granted under the DBP, LTIP and Sharesave in the ten and a half years since Jupiter’s Listing were outstanding over
28.1m shares (including 3.1m granted to Executive Directors). This represented 5.1% (0.6% to Executive Directors) of the Company’s issued share capital. Our
current intention is to settle all share awards outstanding as at 31 December 2021 with market purchased shares and our ongoing practice is to purchase
shares in the market to settle obligations. No new shares have been issued since listing in 2010 in settlement of share awards to employees. Therefore, we
are currently operating within the relevant dilution targets by a comfortable margin.
Notwithstanding the target outlined above, as a business exposed to both market shocks and critical people issues, we believe we should retain flexibility
to act very quickly to take steps that could increase dilution up to a maximum of 15% on a temporary and short-term basis, if the Remuneration
Committee and Board believe it is clearly in shareholders’ interests to do so.
If dilution were to exceed 10% in any rolling 10-year period, this would be on an exceptional basis and for a short time period. The Directors’ Remuneration
Report for the relevant year would also contain the necessary justifications for such an outcome. The Remuneration Committee and Board would ensure
that dilution levels returned to within the 10% level in any rolling 10-year period as soon as practicable thereafter.
Jupiter’s total shareholder return compared against total shareholder return of FTSE 250 and FTSE 350 Investment Banking
and Brokerage Services indices since December 2011
The chart below shows the Company’s share price performance (based on total shareholder return, with dividends reinvested net of tax) in the 10-year
period to 31 December, compared with the movement of the FTSE 250 Index and the FTSE 350 Investment Banking and Brokerage Services Index. These
two indices were chosen as the Company is in the FTSE 250 and the FTSE 350 Investment Banking and Brokerage Services Index includes UK listed financial
stocks, including asset managers.
Compliance statement
This Remuneration Report was prepared in accordance with the Large and Medium-sized Companies and Groups (Accounts and Reports)
(Amendment) Regulations 2013. This report contains both audited and non-audited information. The information subject to audit is set out in the
Annual Report on Remuneration and is amended accordingly.
During the year Jupiter has been subject to a number of regulations including CRD III and parts of the firm were also subject to AIFMD and UCITS V.
The Committee fulfils all of its requirements under these regulations and ensures that the Remuneration Policy adheres to their principles. The
Group has followed the requirements of the UK Corporate Governance Code with the exception detailed on page 102.
Jupiter
FTSE 250 Index FTSE 350 – Investment Banking and Brokerage Services
£
450
£
400
£
350
£
300
£
200
£
250
£
150
£
50
£
100
Dec 2011 Dec 2021Dec 2020Dec 2019Dec 2018Dec 2017Dec 2016Dec 2015Dec 2014Dec 2013Dec 2012
123
Jupiter Fund Management plc | Annual Report and Accounts 2021
Table of historic levels of CEO pay
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
CEO single figure of total
remuneration (£’000)
1,634 1,789 2,301
1
2,716 2,437 3,546 2,014 1,764
2
1,759 2,514
CEO bonus as a
percentage of maximum
potential
3
N/A N/A N/A N/A N/A N/A 55% 56%
2
64% 85%
Long-term incentive
vesting rates against
maximum opportunity
4
N/A N/A 46% 71% 44%
5
74%
6
43% 32% N/A
7
30%
8
1. Calculated as Edward Bonham Carter’s remuneration to 17 March 2014 and Maarten Slendebroek’s from 17 March 2014 when he took on the role of CEO, plus the value of Edward
Bonham Carter’s LTIP award vesting based on performance to 31 December 2014.
2. Calculated as Maarten Slendebroek’s remuneration to 28 February 2019 and Andrew Formica’s from 1 March 2019 when he took on the role of CEO, plus the value of Maarten
Slendebroek’s pro-rated LTIP award vesting based on performance conditions tested to 31 December 2019. Restated based on the share price on the 2017 LTIP vesting date 29 March
2020 of £1.94.
3. Jupiter’s Remuneration Policy for the period from 2011 to 2017 did not include individual maximum bonuses, therefore a percentage is not provided for these years.
4. No LTIP awards vested 2010 to 2013 as the first LTIP awards granted to the CEO after listing were in 2012.
5. Maarten Slendebroek has two separate LTIP awards included in the 2016 single figure, both of which had performance periods ending during that financial year.
The 44% vesting is a weighted average of the vesting outcomes for both awards combined.
6. Maarten Slendebroek has two separate LTIP awards included in the 2017 single figure, both of which had performance periods ending during that financial year.
The 74% vesting is a weighted average of the vesting outcomes for both awards combined.
7. Andrew Formica does not have an LTIP award with performance conditions ending in the 2020 performance year, therefore there is no LTIP vesting percentage available for 2020.
8. Andrew Formica’s 2019 LTIP award shown in the single total figure on page 108 is due to vest on 22 March 2022, subject to two equally weighted performance conditions measured to 31
December 2021.
CEO pay ratio
Year Method 25th Percentile Median 75th Percentile
2019
1
Option A 27:1 18:1 11:1
2020 Option A 23:1 16:1 9:1
2021 Option A 34:1 22:1 11:1
1. Restated based on the share price on the 2017 LTIP vesting date 29 March 2020 of £1.94.
The Company has chosen to use Option A as the methodology for calculating the pay and benefits of all UK employees, as this is consistent with the
approach that must be used for the CEO single figure. It therefore allows a like-for-like comparison to take place between the pay data of the CEO and
employees at the lower, median and upper quartiles, as well as a more accurate analysis of the resulting ratios. For the purpose of this disclosure, the
Company has chosen 31 December 2021 as the reference date on which the pay for all employees in employment as at 1 October 2021 was calculated,
consistent with our approach taken in prior years.
25th Percentile Median 75th Percentile
CEO single figure (£’000) 2,514
Employee single figure (£’000) 74 114 225
Employee single figure salary component (£’000) 50 73 110
As explained in the Committee Chairman’s statement, the 2020 CEO single figure did not contain an LTIP value whereas the 2021 CEO single figure does,
namely the vested value of the current CEO’s first LTIP award post appointment. An inevitable consequence of this disparity is a higher CEO pay ratio in
2021 than in 2020.
REMUNERATION REPORT continued
124
Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
Jupiter operates consistent reward policies across its UK workforce, with the exception of any variation required by regulation, legislation or corporate
governance. Remuneration requirements that are considered more onerous are limited only to those individuals to whom the relevant rules apply.
Notwithstanding this, the Committee recognises that the CEO pay ratio will fluctuate from year to year as it is dependent on a number of factors, some
of which are out of the Committee’s control, for example movements in share price which affect the value of deferred share-based compensation with
performance conditions. The Committee therefore does not target a specific pay ratio, but will consider any movement in the ratio year-on-year when
assessing the balance of remuneration for all other employees relative to maintaining a competitive remuneration package for the CEO.
Change in Board Directors’ pay vs employees
The following table sets out the percentage change in remuneration from FY20 to FY21 paid to each Director (plus the prior year comparative), as well as
the average percentage change for employees. Jupiter Fund Management plc only employs the CEO and CFO and up to May 2021 the Vice Chairman;
however, data for employees has been calculated looking at all employees for the Jupiter Group as a whole.
2021 2020
%
change in
salary/fee
(2020 to 2021)
%
change in
taxable benefits
(2020 to 2021)
6
%
change in
annual bonus
(2020 to 2021)
%
change in
salary/fee
(2019 to 2020)
%
change in
taxable benefits
(2019 to 2020)
%
change in
annual bonus
(2019 to 2020)
Andrew Formica – CEO 0% 9% 32% 2% 14% 16%
Wayne Mepham – CFO 5% 9% 38% 0% 14% 16%
Edward Bonham Carter
1
– Vice Chairman 0% 9% -49% 0% 16% 12%
Nichola Pease
2
– Chairman 0% 0% N/A N/A N/A N/A
Jonathon Bond
1
– NED, SID 0% 0% N/A 0% 0% N/A
Polly Williams – NED, Chair of Audit and Risk Committee 0% 0% N/A 2% -100% N/A
Roger Yates
3
– NED, Chair of Remuneration Committee, SID 20% 0% N/A 19% 0% N/A
Karl Sternberg – NED 5% 0% N/A 5% 0% N/A
Chris Parkin – NED 0% 0% N/A N/A N/A N/A
David Cruickshank
4
– NED N/A N/A N/A N/A N/A N/A
Dale Murray
4
– NED N/A N/A N/A N/A N/A N/A
Employees of Jupiter Group
5
4% 9% 22% 4% 12% 15%
1. The salary, benefits and bonus for Edward Bonham Carter and fees for Jonathon Bond has been annualised for 2021 to reflect their full year equivalent amounts had they remained
serving on the Board in their respective roles. Edward and Jonathon stepped down from the Board on 6 May 2021.
2. The fees for Nichola Pease has been annualised for 2020 to reflect her full year equivalent amount, notwithstanding the amounts received by her in 2020 were pro-rated in respect for
the period of time she served as Chairman.
3. The fee increase for Roger Yates represents the increase received in conjunction with his appointment as Senior Independent Director on 6 May 2021.
4. David Cruickshank and Dale Murray joined the Board in 2021, therefore prior year comparative data is not available for them.
5. For salary: calculated using the average of all salary percentage changes from 2020 to 2021 for all eligible employees of the Jupiter Group as part of the annual compensation review
process. For benefits: calculated using the percentage increase in the premium for private medical and dental insurance year-on-year paid by the Company. For annual bonus:
calculated using the average of all full year equivalent discretionary annual bonus percentage changes from 2020 to 2021 for all eligible employees of the Jupiter Group as part of the
annual compensation review process.
6. Benefits for Executive Directors and all other employees only includes private medical and dental insurance premiums. Benefits for Non-Executive Directors comprise reasonable
taxable business expenses incurred in the performance of duties and the payment of any tax arising, as reported in the table on page 112. The quantums involved are often de minimis,
but small changes can result in large percentage fluctuations shown in the table above.
125
Jupiter Fund Management plc | Annual Report and Accounts 2021
Relative importance of spend on pay
The following chart shows the Group’s profit before tax, total employee remuneration and dividends declared on ordinary shares for 2020 and 2021.
Underlying profit before tax
1
(£m)
Total employee remuneration
2
(£m)
Dividends declared
(£m)
179.0
216.7
20
21
161.9
213.0
20
21
111.2
94.6
20
21
1. Stated before exceptional items (see APMs on page 181).
2. Being fixed staff costs before exceptional items plus variable staff costs before exceptional items (see page 23).
Total employee remuneration has increased by 32%. We have made targeted investment for growth during 2021 as well as ensuring our reward packages
are competitive and support the retention of existing talent, which has resulted in some increases for 2021. Our fixed to variable compensation has moved
back to our historic trend of a greater weighting towards annual performance related awards.
Fixed staff costs before exceptional items decreased by £3.1 million, as a result of restructuring programmes: firstly, to remove duplicated roles after the
Merian acquisition, and secondly, through a targeted programme across 2020 and 2021 to reposition the Group by concentrating resource into areas of
growth.
Variable staff costs before exceptional items increased from £85.8 million in 2020 to £140.0 million in 2021, of which £33.2 million was due to performance
fee related pay. The remaining increase was impacted by a number of factors, mainly through the inclusion of a full year of the investment teams that
joined us with the Merian acquisition. In addition, the cash bonus charge has increased as we align employees with the financial performance of the Group,
which we assess before performance fees and variable staff costs, as well as investment capabilities that are demonstrating growth potential but have not
yet achieved sufficient scale.
Shareholder voting
The following table sets out the voting outcomes in respect of the most recent AGM votes on the Annual Report on Remuneration and the Directors’
Remuneration Policy, held on 6 May 2021.
For
Percentage
of total
votes cast Against
Percentage
of total
votes cast Withheld
Directors’ Remuneration Policy at 2021 AGM 434,297,136 95.62 19,898,592 4.38 701,578
Annual Report on Remuneration at 2021 AGM 444,099,193 97.78 10,097,335 2.22 700,778
Advisers
In September 2017 the Remuneration Committee conducted a review of the appointment of its independent advisers. The process included a series of
interviews with the Committee Chairman and members of the Committee. As a result of that review Deloitte LLP were confirmed as advisers to the
Committee and a new team was appointed.
The Committee has formally reviewed the work undertaken by Deloitte and is satisfied that the advice they have received has been objective and
independent. Deloitte are founder members of the Remuneration Consultants Group and abide by its code of conduct in relation to executive
remuneration consulting in the UK. Fees paid to Deloitte for executive remuneration consulting were £78,400 in 2021, determined on a time-spent basis.
Deloitte also provided advice to the Company relating to incentive plans and regulatory matters during the year. The Remuneration Committee does not
consider that the other advice provided has any impact on Deloitte’s independence as advisers to the Remuneration Committee.
On behalf of the Board
Roger Yates
Chairman of the Remuneration Committee
24 February 2022
REMUNERATION REPORT continued
126
Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
DIRECTORS’ REPORT
The Directors present their report and the Group’s audited Financial Statements for the year ended 31 December 2021.
Business performance
Principal activities The Company’s principal activity is to act as a holding company for a group of investment management companies. Our business
model is based on helping clients achieve their long-term investment objectives, by creating value through our investment
performance and stewardship of the funds we manage and the effective distribution thereof. Our business model is explained in
the Strategic report. The Group operates principally in the United Kingdom with international operating subsidiaries in
Luxembourg, which has branches across Europe, Ireland, Hong Kong, Singapore, the United States and Switzerland.
The Company is incorporated with Company Number 6150195 and is domiciled in England and Wales.
Development and
performance
Commentary on the development and performance in the year ended 31 December 2021, and likely future developments in the
Group’s business, is included in the Strategic Report on pages 2 to 67.
Financial Risk Descriptions of the Group’s financial risk management objectives and policies, and its exposure to risks arising from its use of
financial instruments, are set out in Note 24 to the Financial Statements on pages 154 to 158.
Directors’
remuneration
Information concerning Directors’ contractual arrangements and entitlements under share-based remuneration arrangements is
given in the Remuneration Report on pages 102 to 126.
Environmental
performance
The Group’s environmental performance data, including the absolute Scope 1 and 2 emissions for 2021, can be found in the
Corporate Responsibility section of the Strategic Report on page 47 and the Group’s TCFD report on pages 45 to 48.
Employees in the
business
Information concerning the involvement of employees in the business is also given in the Strategic report on pages 36 to 39 and
on page 59.
Stakeholder
interests
How we consider stakeholder interests, and our s.172 statement, can be found on pages 58, 59, 81 and 82.
Important events
affecting the
Company since the
end of the year
There have been no important events affecting the Company since the end of the year.
Listing Rules and Disclosure Guidance and Transparency Rules Disclosures
DTR 4.1.5R,
DTR 4.1.8R
and DTR 4.1.11R
Information which is the required content of the Management report can be found in the Strategic report and in this
Directors’ report.
LR 9.8.4 R Information Location
Interest capitalised Not applicable
Shareholder waiver of dividends Note 21
Shareholder waiver of future dividends Note 21
Agreements with controlling shareholders Not applicable
Provision of services by a controlling shareholder Not applicable
Details of long-term incentive schemes Remuneration Report and Note 5
Waiver of emoluments by a Director Not applicable
Waiver of future emoluments by a Director Not applicable
Significant contracts Page 130
Non pre-emptive issues of equity for cash Not applicable
Non pre-emptive issues of equity for cash in relation to major
subsidiary
Not applicable
Participation by parent of a placing by a listed subsidiary Not applicable
Publication of unaudited financial information Page 180
Compliance
statement – DTR 7.2
This statement has been provided within the Governance section on page 71 and is deemed to form part of this Directors’
report.
Internal control and
risk management
systems – DTR 7.2.5
A description of the Company’s financial reporting, internal control and risk management processes can be found on pages 60 to
67.
Structure of
capital and
voting rights
– DTR 7.2.6
As at 31 December 2021 and 24 February 2022, there were 553,060,741 fully paid ordinary shares of 2p, amounting to £11,061,215. Each
share in issue is listed on the Official List maintained by the FCA in its capacity as the UK Listing Authority. The Company has one
class of ordinary shares which carry the right to attend, speak and vote at general meetings of the Company. The holders of
ordinary shares have the right to participate in dividends and other distributions according to their respective rights and interests
in the profits of the Company and a return of capital on a winding up of the Company. Full details regarding the exercise of voting
rights in respect of the resolutions to be considered at the AGM to be held on 11 May 2022 are set out in the Notice of Annual
General Meeting. To be valid, the appointment of a proxy to vote at a general meeting must be received not less than 48 hours
before the time appointed for holding the meeting. Full details on how to submit the proxy can be found in the AGM Notice.
127
Jupiter Fund Management plc | Annual Report and Accounts 2021
DIRECTOR’S REPORT continued
Shares and Shareholders
Annual General
Meeting
The AGM will take place on 11 May 2022. The Notice of the AGM will be circulated to all shareholders at least 20 working days
before the meeting and the details of the resolutions to be proposed will be set out in that Notice.
This document will be available on the Company’s website at www.jupiteram.com.
Dividends The Directors have recommended a final dividend in respect of the year ended 31 December 2021 of 9.2 pence per ordinary share
(2020: 9.2 pence per ordinary share). Payment of this dividend is subject to approval by shareholders at the AGM and if approved
will be paid on 20 May 2022, to shareholders on the register at the close of business on 22 April 2022.
Shares held in
employee benefit
trusts
Under the rules of the Jupiter Share Incentive Plan (the SIP), which was introduced in 2013, eligible employees are entitled to
acquire ordinary shares in the Company. The SIP shares are held in trust for participants by Solium Trustee (UK) Limited (the SIP
Trustee). Voting rights are exercised by the SIP Trustee on receipt of participants’ instructions. If a participant does not submit an
instruction to the SIP Trustee, no vote is registered. In addition, the SIP Trustees do not vote on any unallocated shares held in
trust. As at 24 February 2022, the SIP Trustee held 0.36% of the Company’s issued share capital.
JTC Employer Solutions Trustee Limited, as trustee of the Jupiter Employee Benefit Trust (the EBT Trustee), holds ordinary shares
in trust for the benefit of the Group’s employees. Where the EBT Trustee has allocated shares held in the trust in respect of
specific awards granted under the Jupiter Employee Share Plan, the holders of such awards may recommend to the EBT Trustee
how it should exercise voting rights relating to such shares. To the extent that a participant does not make such
recommendations, no vote is registered. In addition, the EBT Trustee does not vote on any unallocated shares held in the trust.
As at 24 February 2022, the EBT Trustee held 3.31% of the Company’s issued share capital.
CREST The Company’s ordinary shares are in CREST, the settlement system for stocks and shares traded on the London Stock Exchange.
Restrictions on
transfer of shares
Lock-up agreements
On 1 July 2020, 95,360,825 new ordinary shares in the Company were issued as consideration for the acquisition of Merian and, as
part of the agreement, are subject to restrictions on transfer. The following share lock-up agreements were entered into on 1 July 2020.
TA Associates, holding 84,115,278 shares, have a lock-up agreement for 24 months from 1 July 2020, subject to certain exemptions
and further restrictions on disposal volumes after the end of the lock-up period.
Under the terms of the Merian acquisition certain key Merian Management shareholders were allotted 11,245,547 shares. There
are lock-up agreements in place over these shares which prevent key Merian Management shareholders of disposing of more
than 25% of their respective shares for a period of three years from 1 July 2020, subject to certain exemptions.
Substantial share
interests
As at 31 December 2021, the Company had been notified of the following voting interests in the ordinary share capital of the
Company in accordance with DTR 5 of the FCA’s Disclosure Guidance and Transparency Rules. Percentages are shown as notified,
calculated with reference to the Company’s disclosed share capital as at the date of the movement triggering the notification.
Name
Number of shares notified
to the Company
Percentage interest
%
Silchester International Investors LLP 99,670,631 18.02
TA Associates 84,115,278 15.21
M&G plc 28,335,937 5.12
JTC Employer Solutions Trustee Limited 18,728,412 3.39
No notifications have been disclosed to the Company in accordance with DTR 5 during the period 1 January 2022 to 24 February 2022.
Board of Directors During the year, Edward Bonham Carter and Jonathon Bond stepped down from the Board at the Company’s AGM held on 6
May 2021. David Cruickshank was appointed to the Board as a Non-Executive Director on 1 June 2021 and Dale Murray joined the
Board as a Non-Executive Director on 1 September 2021. There have been no further Board changes up until the date of this
report.
The Directors of the Company who were in office during the year and up to the date of signing the financial statements were:
• Edward Bonham Carter (to 6 May 2021)
• Jonathon Bond (to 6 May 2021)
• David Cruickshank (appointed 1 June 2021)
• Andrew Formica
• Wayne Mepham
• Dale Murray (appointed 1 September 2021)
• Chris Parkin
• Nichola Pease
• Karl Sternberg
• Polly Williams
• Roger Yates
Directors
128
Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
Directors’ interests The Directors’ interests in the Company’s shares are set out in the Remuneration report on page 117. No Director had a material
interest in any significant contract (other than a service contract or contract for services) with the Company at any time during
the year.
The Directors are advised of their statutory duty to avoid conflicts of interest with the interests of the Company. All actual and
potential conflicts are brought to the attention of the Board. The operation of the Company’s policy on conflicts of interest is
described in the Governance section on page 89.
The rights and obligations attaching to the Company’s ordinary shares, as well as the powers of the Company’s Directors, are set
out in detail in the Company’s Articles of Association, which are made available for inspection by the Company’s shareholders at
the AGM and are available on our website www.jupiteram.com.
Appointment
and replacement
of Directors
The Company’s Articles of Association provide that Directors may be appointed by the Company by ordinary resolution or by
the Board. If appointed by the Board, a Director holds office only until the next AGM.
In accordance with the Company’s Articles of Association and the Code’s requirements, all serving Directors offer themselves for
election or re-election at the AGM in 2022 with the exception of Polly Williams who is standing down at the conclusion of the
AGM.
As part of the acquisition of Merian, TA Associates were issued 84,115,278 ordinary shares in the Company, representing 15.21% of
the issued share capital. Under the terms of the transaction TA Associates retain the right to appoint a Non-Executive Director
to the Board, for so long as they own 10% or more of the Company’s issued share capital.
In addition to any powers under the Companies Act 2006 (the Act) to remove Directors from office, the Company may, by
passing an ordinary resolution, remove any Director from the Board before the expiration of his or her period in office. The
Company may, subject to the Articles of Association, appoint by ordinary resolution another person who is willing to be a
Director in his or her place. The Company’s Articles of Association may be amended by special resolution of the shareholders.
Powers of
the Directors
The Directors manage the Company under the powers set out in the Company’s Articles of Association. These powers include
the Directors’ ability to issue or buy back shares. An ordinary resolution was passed at the AGM on 6 May 2021, authorising the
Directors to allot new ordinary shares up to an aggregate nominal amount of £3,687,071, representing approximately one third of
the Company’s issued share capital. The Directors intend to seek shareholders’ approval for the renewal of this authority at the
AGM, to allot and grant rights to subscribe for ordinary shares up to an aggregate nominal amount of £3,687,071, representing
approximately one third of the Company’s issued share capital as at 24 February 2022. If approved, this authority will expire on 30
June 2023 or, if earlier, at the conclusion of the AGM in 2023.
At the AGM in 2021, shareholders approved a resolution authorising the Company to make purchases of its own shares and as at
24 February 2022, the Directors have not used this authority. A special resolution will be proposed at the AGM to renew the
Company’s limited authority to purchase its own ordinary shares. The authority will be limited to a maximum of 55,306,074
ordinary shares (approximately 10% of the Company’s issued share capital as at 24 February 2022) and will set out the minimum
and maximum prices which the Company may pay for any such purchase. If approved, this authority will expire on 30 June 2023
or, if earlier, at the conclusion of the AGM in 2023.
Change of control The Company does not have agreements with any Director or employee that would provide compensation for loss of office or
employment resulting from a change of control following a takeover bid, except that provisions of the Company’s share
schemes may cause options and awards granted under such schemes to vest in those circumstances.
Directors’
indemnities
The Company’s Articles of Association permit the provision of indemnities to the Directors. In accordance with the Articles of
Association, the Company has entered into a deed of indemnity in favour of each Director (which is a qualifying third-party
indemnity provision under the Act) pursuant to which the Director has been granted the right to indemnification as permitted
under the Act. These arrangements were in place throughout the year and up to the date of approval of this report and applied
to the current and previous Directors. In addition, during the year the Company has maintained Directors’ and Officers’ liability
insurance cover for Directors.
Directors’ service
agreements
Each Executive Director, at the time of this report, has a written service agreement. This may be terminated by either party on
not less than 12 months’ notice in writing for the CEO and on not less than 6 months’ notice in writing for the CFO.
Non-Executive
Directors’ letters
of appointment
The letters of appointment of the Non-Executive Directors are issued for an initial period of three years, which may be renewed
for further terms as appropriate. All appointments are subject to a review by the Nomination Committee upon the third
anniversary and on extension a further review is undertaken at the sixth anniversary at which the Board’s succession plans and
the need to refresh the Board’s skills and experiences are carefully considered.
The role and responsibilities of each Director are clearly set out and include the duties of a Director as provided in the Act. It is
made clear that these duties do not include any management function but an indication that the Director is expected to support
and challenge management and help in the development of the Group’s strategy. Three months’ notice in writing is required to
be served by either party to terminate the appointment.
The Non-Executive Directors’ letters of appointment are available for inspection at the Company’s registered office during
normal business hours and at the AGM (for 15 minutes prior to, and during, the Meeting).
Compensation
for loss of office
With reference to Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008
(paragraph 13(2)(k)), there are no agreements in place between the Company and any Director or employee for loss of office in
the event of a takeover.
129
Jupiter Fund Management plc | Annual Report and Accounts 2021
DIRECTOR’S REPORT continued
Stakeholders
Supplier oversight
and significant
contracts
Jupiter has ten significant oversight relationships:
• SS&C Technologies – Transfer Agent for unit trusts
• JPMorgan – Company Secretarial and Administrator for Investment Trusts
• Northern Trust – Custody, Fund Administration & Depositary for unit trusts.
• IHS Markit – Enterprise Data Management (EDM) software
• BlackRock – Trading, Portfolio Management and Risk Reporting system for all funds
• RBS – Client Money Account and Jupiter Group Accounts
• Citi – Depositary, Fund Administration and Prime Brokerage
• FNZ – Transfer Agent for OEIC’s
• Maitland – Company Secretarial and Administrator for the Chrysalis Investment Trust
• IFS State Street – Administrator, Regulatory Reporting and Transfer Agent for the Arbea fund
These organisations’ activities are defined in service level agreements that are closely monitored to ensure that service delivery
standards are met.
Jupiter’s supplier management function, with operations, oversee a suite of agreed activities, including: formal meeting
governance; the review of key performance indicators; reviews by Jupiter’s assurance functions (including Service Delivery,
Business Continuity, IT Security, Enterprise Risk, Compliance and Internal Audit where appropriate); and the review of key reports
(including controls assurance reports and the financial report and Financial Statements). Site visits were not undertaken during
Covid. Instead these were, where appropriate, replaced with virtual sessions and additional monitoring was introduced to cover
any risks and issues associated with the pandemic. Any risks or issues arising are progressed through to resolution and, where
appropriate, escalated to senior management and reported to the Board.
Employees The Group gives full and fair consideration to applications for employment from disabled persons, where a disabled person can
adequately fulfil the job’s requirements. Where existing employees become disabled, the Group’s policy, wherever practicable, is
to provide continuing employment under normal terms and conditions and make any required changes to their working
environment. The Group provides training, career development and promotion to disabled employees.
Further details of the Company’s employment procedures and practices are set out in the Strategic report on pages 36 to 39.
Political donations The Group made no political donations or contributions during the year (2020: £nil).
Auditors and audit
Independent
auditors and audit
information
PwC were reappointed as external auditors following a tender conducted in 2014. An external audit tender took place during 2021
and the process and recommendation have been outlined in the Audit and Risk Committee report on page 99.
Statements
Directors’
responsibility
statements
The statement of Directors’ responsibility for preparing the Annual Report and Accounts is set out on page 131 and is deemed to
form part of the Directors’ report. Within this, the Directors have included a statement that the Annual Report and Accounts
presents a fair, balanced and understandable assessment of the Group’s position and prospects. To help the Board discharge its
responsibilities in this area, the Board consulted the Audit and Risk Committee, which advised on the key considerations to
comply with best practice and the Code’s requirements.
Following the Committee’s advice, the Board considered and concluded that:
• the business model and strategy were clearly described;
• the assessment of performance was balanced;
• KPIs were used consistently;
• the language used was concise, with good linkages to different parts of the document; and
• an appropriate forward-looking orientation had been adopted.
Going concern The Strategic Report discusses the Group’s business activities, together with the factors likely to affect its future development,
performance and position. In addition, it sets out the Group’s financial position, cash flows, liquidity position and borrowing
facilities. The financial risk management note to the Financial Statements sets out the Group’s objectives, policies and processes
for managing capital and its financial risk management objectives, together with details of financial instruments and exposure to
credit and liquidity risk.
The Group has access to the financial resources required to run the business efficiently and has a strong gross cash position. The
Group’s forecasts and projections, which are subject to rigorous sensitivity analysis, show that the Group will be able to operate
within its available resources for at least 12 months from the date of this report. This has included a detailed focus on the market
uncertainty arising from Covid-19 and the potential for multiple risks to occur simultaneously. As a consequence, the Directors
consider it appropriate to prepare the annual Financial Statements on a going concern basis of accounting.
Statement
of viability
In accordance with Provision 31 of the Code, the Directors have assessed the prospects of the Group over a longer period than
the 12 months required by the Going Concern provision. Details of the assessment can be found in the Financial review on page 26.
By order of the Board
Lisa Daniels
Company Secretary
24 February 2022
130
Jupiter Fund Management plc | Annual Report and Accounts 2021
GOVERNANCE
DIRECTORS’ RESPONSIBILITY
AND COMPLIANCE STATEMENTS
Statements relating to the preparation of the Financial
Statements
The Directors are responsible for preparing the Annual Report, the
Remuneration Report and the Financial Statements in accordance with
applicable law and regulations. Company law requires the Directors to
prepare Financial Statements for each financial year. Under that law the
Directors have prepared the Group and Company Financial Statements in
accordance with International Accounting Standards in conformity with the
requirements of the Companies Act 2006. Additionally, the Financial
Conduct Authority’s Disclosure Guidance and Transparency Rules require
the Directors to prepare the Group Financial Statements in accordance with
UK-adopted International Financial Reporting Standards (IFRS) and with the
requirements of the Companies Act 2006 as applicable to companies
reporting under those standards.
The Directors’ review of the Financial Statements
The Directors undertook a detailed review of the Financial Statements in
February 2022. Following this examination, the Board was satisfied that the
Financial Statements for 2021 give a true and fair view of the state of affairs
of the Group and the Company and of the profit or loss of the Group for
that period. Before approving the Financial Statements, the Board satisfied
itself that in preparing the statements:
• suitable accounting policies had been selected and consistently applied;
• the judgements and accounting estimates that have been made were
reasonable and prudent; and
• where applicable International Accounting Standards in conformity with
the requirements of the Companies Act 2006 have been adopted and,
for the Group, UK-adopted IFRS, have been followed and that there were
no material departures.
The Directors’ review of going concern
The Financial Statements have been prepared on the going concern basis,
the Directors having determined that the Company is likely to continue in
business for at least 12 months from the date of this report.
The Directors’ review of current position, prospects and
principal risks
Supported by the Audit and Risk Committee, the Directors have completed
a robust review and assessment of the principal risks in the business making
use of the Enterprise Risk Framework which operates in all areas of the
Company. The framework ensures that the relevant risks are identified and
managed and that information is shared at an appropriate level. Full details
of these risks are provided in the Risk management section of the Strategic
report. The Board subjected the Enterprise Risk Framework to a detailed
review in December. The Directors found it was an effective mechanism
through which the principal risks and the Company’s risk appetite and
tolerances could be tested and challenged.
The Directors’ responsibility for accounting records
The Directors are responsible for keeping adequate accounting records that
are sufficient to show and explain the Group’s and Company’s transactions
and disclose with reasonable accuracy at any time the financial position of
the Group and Company and enable them to ensure that the Financial
Statements and the Directors’ Remuneration Report comply with the
Companies Act 2006.
The Directors’ responsibility for the safekeeping of assets
The Directors have examined the steps in place for ensuring the prevention
and detection of fraud and other irregularities. The procedure is examined
and tested on a regular basis. The Board is satisfied it is understood and is
operated well, and accordingly that the assets of the Company are
safeguarded and protected from fraud and other irregularities.
The Directors’ responsibility for information
The Directors are responsible for the maintenance and integrity of the
Company’s website. Legislation in the United Kingdom governing the
preparation and dissemination of Financial Statements may differ from
legislation in other jurisdictions.
Statement of Directors’ responsibilities
The Directors consider that the Annual Report and Accounts, taken as a
whole, is fair, balanced and understandable and provides the information
necessary for shareholders to assess the Group’s and Company’s position
and performance, business model and strategy.
Each of the Directors, whose names and functions are listed in the
Directors’ profile on pages 72 to 73 confirm that, to the best of their
knowledge:
• the Group and Company Financial Statements, which have been prepared
in accordance with International Accounting Standards in conformity
with the requirements of the Companies Act 2006, give a true and fair
view of the assets, liabilities, financial position and profit of the Group
and profit of the Company; and
• the Directors’ report contained in the Annual Report and Accounts
includes a fair review of the development and performance of the
business and the position of the Group and Company, together with a
description of the principal risks and uncertainties that it faces.
In the case of each director in office at the date the Directors’ report is
approved:
• so far as the director is aware, there is no relevant audit information of
which the Group’s and Company’s auditors are unaware; and
• they have taken all the steps that they ought to have taken as a director
in order to make themselves aware of any relevant audit information and
to establish that the Group’s and Company’s auditors are aware of that
information.
On behalf of the Board
Wayne Mepham
Chief Financial Officer
24 February 2022
131
Jupiter Fund Management plc | Annual Report and Accounts 2021
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2021
CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
for the year ended 31 December 2021
Notes
2021
£m
2020
£m
Revenue 1, 2 617.8 500.5
Fee and commission expenses 1 (49.2) (42.7)
Net revenue 1 568.6 457.8
Administrative expenses 3 (353.1) (312.1)
Other (losses)/gains 6 (4.4) 3.3
Amortisation of intangible assets 11 (20.6) (11.3)
Operating profit 190.5 137.7
Finance costs 7 (6.8) (5.1)
Profit before taxation 183.7 132.6
Income tax expense 8 (34.1) (27.3)
Profit for the year
1
149.6 105.3
Earnings per share
Basic 9 27.6p 21.3p
Diluted 9 26.9p 20.8p
1. Non-controlling interests are presented in the Consolidated statement of changes in equity.
2021
£m
2020
£m
Profit for the year 149.6 105.3
Items that may be reclassified subsequently to profit or loss
Exchange movements on translation of subsidiary undertakings (2.5) 0.7
Other comprehensive (loss)/income for the year net of tax (2.5) 0.7
Total comprehensive income for the year net of tax 147.1 106.0
132 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
Notes
2021
£m
2020
(restated)
1
£m
Non-current assets
Goodwill 10 570.6 570.6
Intangible assets 11 52.1 70.8
Property, plant and equipment 12 44.1 47.4
Deferred tax assets 13 27.6 20.0
Trade and other receivables 15 0.5 0.5
694.9 709.3
Current assets
Financial assets at fair value through profit or loss 14 303.5 261.1
Trade and other receivables 15 145.0 187.3
Cash and cash equivalents 16 197.3 188.1
645.8 636.5
Total assets 1,340.7 1,345.8
Equity
Share capital 19 11.1 11.1
Own share reserve 20 (0.4) (0.2)
Other reserves
1
20 250.1 250.1
Foreign currency translation reserve 20 0.3 2.8
Retained earnings 20 639.7 622.5
Capital and reserves attributable to owners of Jupiter Fund Management plc 900.8 886.3
Non-controlling interests – (0.2)
Total equity 900.8 886.1
Non-current liabilities
Loans and borrowings 17 49.3 49.2
Trade and other payables 18 102.3 87.4
Deferred tax liabilities 13 10.3 12.5
161.9 149.1
Current liabilities
Financial liabilities at fair value through profit or loss 14 52.3 89.4
Trade and other payables 18 222.2 212.8
Current income tax liability 3.5 8.4
278.0 310.6
Total liabilities 439.9 459.7
Total equity and liabilities 1,340.7 1,345.8
1. The split of the Group’s total equity between different non-distributable reserves has been restated. See Notes 19 and 20.
The financial statements on pages 132 to 164 were approved by the Board of Directors and authorised for issue on 24 February 2022.
They were signed on its behalf by
Wayne Mepham, Chief Financial Officer
CONSOLIDATED BALANCE SHEET
at 31 December 2021
133Jupiter Fund Management plc | Annual Report & Accounts 2021
CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY
for the year ended 31 December 2021
Share capital
£m
Own share
reserve
£m
Other
reserves
(restated)
1
£m
Foreign
currency
translation
reserve
£m
Retained
earnings
£m
Total
£m
Non-controlling
interests
£m
Total
equity
£m
At 1 January 2020 9.2 (0.3) 8.0 2.1 592.7 611.7 – 611.7
Profit for the year – – – – 105.5 105.5 (0.2) 105.3
Exchange movements on
translation of subsidiary undertakings – – – 0.7 – 0.7 – 0.7
Other comprehensive income – – – 0.7 – 0.7 – 0.7
Total comprehensive income – – – 0.7 105.5 106.2 (0.2) 106.0
Issuance of ordinary shares as consideration for a
business combination, net of transaction costs and
tax (restated)
1
1.9 – 242.1 – – 244.0 – 244.0
Vesting of ordinary shares
and options – 0.2 – – – 0.2 – 0.2
Dividends paid – – – – (83.9) (83.9) – (83.9)
Purchase of shares by EBT – (0.1) – – (10.6) (10.7) – (10.7)
Share-based payments – – – – 19.8 19.8 – 19.8
Deferred tax – – – – (1.0) (1.0) – (1.0)
Total transactions with owners (restated)
1
1.9 0.1 242.1 – (75.7) 168.4 – 168.4
At 31 December 2020 (restated)
1
11.1 (0.2) 250.1 2.8 622.5 886.3 (0.2) 886.1
Profit for the year – – – – 149.4 149.4 0.2 149.6
Exchange movements on
translation of subsidiary undertakings – – – (2.5) – (2.5) – (2.5)
Other comprehensive loss – – – (2.5) – (2.5) – (2.5)
Total comprehensive income – – – (2.5) 149.4 146.9 0.2 147.1
Vesting of ordinary shares
and options – 0.1 – – – 0.1 – 0.1
Dividends paid – – – – (109.8) (109.8) – (109.8)
Purchase of shares by EBT – (0.3) – – (48.2) (48.5) – (48.5)
Share-based payments – – – – 25.5 25.5 – 25.5
Current tax – – – – 0.1 0.1 – 0.1
Deferred tax – – – – 0.2 0.2 – 0.2
Total transactions with owners – (0.2) – – (132.2) (132.4) – (132.4)
At 31 December 2021 11.1 (0.4) 250.1 0.3 639.7 900.8 – 900.8
Notes 19 20 20 20 20
1. The split of the Group’s total equity between different non-distributable reserves has been restated in the line ‘Issuance of ordinary shares as consideration for a business combination,
net of transaction costs and tax’ for 2020. See Notes 19 and 20.
134 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
Notes
2021
£m
2020
£m
Cash flows from operating activities
Cash generated from operations 22 237.5 131.8
Income tax paid (48.6) (27.2)
Net cash inflows from operating activities 188.9 104.6
Cash flows from investing activities
Purchase of property, plant and equipment 12 (1.4) (1.3)
Purchase of intangible assets 11 (2.1) (1.3)
Purchase of financial assets at fair value through profit or loss (190.4) (251.5)
Proceeds from disposals of financial assets at fair value through profit or loss 184.9 249.0
Cash movement from funds no longer consolidated (4.1) –
Net cash received from acquisitions – 68.2
Dividend income received 1.1 0.8
Net cash (outflows)/inflows from investing activities (12.0) 63.9
Cash flows from financing activities
Proceeds from debt issued – 49.0
Repayment of borrowings – (111.0)
Dividends paid 21 (109.8) (83.9)
Purchase of shares by EBT (48.5) (10.7)
Finance costs paid (5.1) (0.6)
Cash paid in respect of lease arrangements 12 (5.2) (6.7)
Third-party subscriptions into consolidated funds 31.5 53.2
Third-party redemptions from consolidated funds (28.7) (47.5)
Distributions paid by consolidated funds (1.9) (1.6)
Net cash outflows from financing activities (167.7) (159.8)
Net increase in cash and cash equivalents 9.2 8.7
Cash and cash equivalents at beginning of year 188.1 179.4
Cash and cash equivalents at end of year 16 197.3 188.1
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2021
135Jupiter Fund Management plc | Annual Report & Accounts 2021
Introduction
Accounting policies are contained within relevant notes, with the basis of preparation and general policies collected in Note 27. An explanation of the use
of alternative performance measures (APMs) is provided on pages 181 to 183.
The impact of exceptional items on the financial statements
The Group has presented certain items as exceptional in 2020 and 2021. These items principally relate to the acquisition of Merian Global Investors Limited
(Merian) in 2020. Further details of all items that are deemed exceptional are explained below, as well as within the relevant notes to the financial
statements and in the Chief Financial Officer’s Review on page 24.
The use of exceptional items and underlying profit measures in the Strategic report
In the Strategic report of this document, the Group makes use of a number of APMs, including ‘Underlying profit before tax’. The use of such measures
means that financial results referred to in the Strategic report section of this document may not be equal to the statutory results reported in the financial
statements. Guidelines issued by the European Securities and Markets Authority require such differences to be reconciled. As a result of the Merian
acquisition, there was a significant difference between ‘Underlying profit before tax’ and the statutory profit before tax in 2020 due to the recognition of
material acquisition and integration costs. In 2021, the majority of the exceptional items relate to items initially recognised in 2020 where the relevant
accounting charges are required to be recognised over multiple accounting periods. Further detail can be found on page 24.
In addition, in 2020 and 2021, the Group has earned significant levels of net performance fee income. These items are included in Revenue and
Administrative expenses in the Group’s results. Such income is not exceptional as it is likely to recur, although the amounts earned can vary from being
extremely significant in size to being immaterial. In their analysis of the results, professional users of the Group’s accounts generally assign different values
to recurring management fees than to potentially non-recurring net performance fees. Similarly, due to their inherent variability, results are presented
both before and after net performance fees for internal management information purposes.
‘Underlying profit before tax’ is equal to the statutory profit before tax less exceptional items. Exceptional items are defined on page 24. The financial
statements do not refer to or use such measures, but the table below provides a reconciliation, indicating in which note or notes to the statutory financial
statements the exceptional items are recorded. Further detail on these items can be found in the relevant notes.
Notes
2021
£m
2020
£m
Underlying profit before tax (page 25) 216.7 179.0
Exceptional items included within the following notes:
Net revenue 1 – 10.0
Administrative expenses 3 (14.2) (47.0)
Intangible assets 11 (18.8) (9.4)
Statutory profit before tax 183.7 132.6
Disclosure of relevant accounting information relating to the acquisition
Disclosures relating to the Merian acquisition in 2020 can be found in Note 5.4 of the Group’s 2020 Annual Report and Accounts.
Other disclosures
Disclosure of items treated as exceptional that are not related to the Merian acquisition are reported in Note 4.
NOTES TO THE GROUP FINANCIAL STATEMENTS
136 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
1. Revenue
The Group’s primary source of recurring revenue is management fees. Management fees are charged for investment management or administrative
services and are normally based on an agreed percentage of the assets under management (AUM). Initial charges and commissions are for additional
administrative services at the beginning of a client relationship, as well as ongoing administrative costs. Performance fees may be earned from some funds
when agreed performance conditions are met. Net revenue is stated after fee and commission expenses to intermediaries for ongoing services under
distribution agreements.
Revenue
Revenue comprises the fair value of the consideration received or receivable for the provision of investment management services. Revenue is shown net
of any value added tax, rebates and discounts. Our revenue components are accounted for as follows:
• management fees are earned over a period of time, and revenue is recognised in the same period in which the service is performed. Management fees
are normally calculated as a percentage of net fund assets managed in accordance with individual management agreements and are billed to the client
each period shortly after the relevant asset data is available, with settlement terms commonly being 30 days or fewer;
• initial charges and commissions on sales of unit trusts are deferred and amortised over the anticipated period of the provision of investment
management services. Revenue for initial charges and commissions is recognised over a period of time, but payment is taken upfront resulting in the
recognition of contract liabilities; and
• performance fees are calculated as a percentage of the appreciation in the net asset value of a fund above a defined hurdle and are recognised when
the fee amount can be estimated reliably and it is highly probable that it will not be subject to significant reversal. Such fees are normally recognised at
the end of the relevant reporting period of the fund and payment is collected shortly after.
Management fees and performance fees are both forms of variable consideration, however there is no significant judgement or estimation. The
transaction price is determined at the end of each measurement period and is normally equal to the relevant measure of AUM adjusted by a factor set out
in the investment management agreement. In the case of performance fees, there will be an adjustment for a hurdle rate of return before the
performance fee is due. The amount is billed to the customer as per contractual arrangements for each of the separate components of revenue listed
above.
All components of the Group’s revenue are performance obligations satisfied over time, and are generally not subject to returns or refunds. The Group
uses the output method to recognise revenue, applying the practical expedient that allows an entity to recognise revenue in the amount to which the
entity has a right to invoice if that consideration corresponds directly with the value to the customer of the entity’s performance completed to date. This
is appropriate because investment management services are generally satisfied over time with either the customer simultaneously receiving and
consuming the benefits provided by the fund manager as the fund manager performs the service, or with the fund manager’s performance enhancing the
assets that the fund controls.
Fee and commission expenses
These are paid to third parties for ongoing services under distribution agreements and are charged to the income statement over the period in which the
service is expected to be provided. The services provided include the provision of access to a basket of fund products, information on financial products,
promotional materials, ongoing services to clients and transaction processing.
2021
£m
2020
£m
Management fees 501.5 426.6
Initial charges and commissions 3.3 0.3
Performance fees 113.0 73.6
Revenue 617.8 500.5
Fee and commission expenses relating to management fees (47.8) (42.6)
Fee and commission expenses relating to initial charges and commissions (1.4) (0.1)
Net revenue 568.6 457.8
In 2020, exceptional items of performance fee revenue of £10.0m were reported within revenue in the Chief Financial Officer’s review. This fee revenue
related to an indemnification of certain deferred awards to former shareholders of Merian who were also fund managers. The performance fees were
disclosed as exceptional items to offset the exceptional cost of the deferred earn out awards that would not have been recorded as a cost to the Group
if the indemnification by TA Associates were required to be fulfilled.
In 2021, performance fee revenue was mainly generated through the Chrysalis Investment Trust, along with a number of small fees from other funds.
Disaggregation of revenue
The Group disaggregates revenue from contracts with customers on the basis of product type and geographical region, as this best depicts how the
nature, amount, timing and uncertainty of the Group’s revenue and cash flows are affected by economic factors.
The Group’s product types can be broadly categorised into pooled funds and segregated mandates. Pooled funds, which include both mutual funds and
investment trusts, are established by the Group, with the risks, exposures and investment approach defined via a prospectus which is provided to potential
investors. In contrast, segregated mandates are generally established in accordance with the requirements of a specific institutional investor.
Revenue by product type
2021
£m
2020
£m
Pooled funds 591.9 462.2
Segregated mandates 25.9 38.3
Revenue 617.8 500.5
137Jupiter Fund Management plc | Annual Report & Accounts 2021
2. Segmental reporting
The Group offers a range of products and services through different distribution channels. All financial, business and strategic decisions are made centrally
by the Board of Directors (the Board), which determines the key performance indicators of the Group. Information is reported to the chief operating
decision maker, the Board, on a single-segment basis. While the Group has the ability to analyse its underlying information in different ways, for example
by product type, this information is only used to allocate resources and assess performance for the Group as a whole. On this basis, the Group considers
itself to be a single-segment investment management business.
Management monitors operating profit for the purpose of making decisions about resource allocation and performance assessment.
Geographical information
Revenue by location of clients
2021
£m
2020
£m
UK 494.7 374.9
Continental Europe 78.8 77.3
Asia 22.5 20.6
Rest of the world 21.8 27.7
Revenue by location 617.8 500.5
The location of clients is based on management information received from distribution partners. Where management information is not available, the
location of the distribution partner is used as a proxy for the location of the client.
Non-current assets for the Group (excluding financial instruments and deferred tax assets) are domiciled as set out below:
Non-current assets for the Group
2021
£m
2020
£m
UK 664.5 686.2
Continental Europe 1.4 1.9
Asia 0.6 0.8
Rest of the world 0.3 –
Non-current assets by location 666.8 688.9
3. Administrative expenses
The largest administrative expense is staff costs. Other administrative expenses include certain significant costs such as administration fees, expenditure
relating to non-capitalisable investment in the business, marketing and IT costs.
Administrative expenses comprise:
2021
£m
2020
£m
Staff costs (Note 4) 227.2 181.9
Depreciation of property, plant and equipment (Note 12) 5.6 6.0
Auditors’ remuneration (see below) 1.4 2.5
Other administrative expenses 118.9 121.7
Total administrative expenses 353.1 312.1
Auditors’ remuneration
2021
£m
2020
£m
Fees payable to the Company’s auditors and their associates for the audit of the parent company
and consolidated financial statements 0.3 0.5
Fees payable to the Company’s auditors and their associates for other services to the Group:
Audit of the Company’s subsidiaries pursuant to legislation 0.8 0.8
Audit-related assurance services 0.3 0.3
Other assurance services – 0.9
Total auditors’ remuneration 1.4 2.5
The Chief Financial Officer’s review on page 24 provides details of exceptional items of £14.2m (2020: £47.0m) within administrative expenses. Of this,
£14.2m (2020: £20.0m) is in respect of staff costs and £nil (2020: £27.0m) relates to other administrative expenses. The staff costs are described further in
Note 4. Other administrative expenses classified as being exceptional in 2020 principally comprised legal and professional fees associated with the Merian
acquisition and consultancy fees relating to the post-acquisition integration process of the Merian business.
Notes to the Group Financial Statements
continued
138 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
4. Staff costs
Staff costs include wages and salaries, share-based payments, pension costs and redundancy costs, along with associated social security costs, and are
recognised on an accruals basis as services are provided to the Group.
2021
£m
2020
£m
Wages and salaries 166.0 127.3
Share-based payments (Note 5) 25.5 19.8
Social security costs 26.2 16.6
Pension costs 5.7 6.2
Redundancy costs 6.5 12.9
Staff costs before gains arising from the economic hedging of fund awards 229.9 182.8
Net gains on instruments held to provide an economic hedge for fund awards (2.7) (0.9)
Staff costs 227.2 181.9
Note 3 refers to £14.2m (2020: £20.0m) of staff costs that are described as exceptional items within the Chief Financial Officer’s review, comprising £7.7m
(2020: £16.0m) relating to the acquisition of Merian and £6.5m (2020: £4.0m) relating to a redundancy programme. In both 2020 and 2021, these chiefly
comprise cash and share-based deferred earn out (DEO) awards and redundancy costs. The redundancy costs in both years relate to a restructuring
programme of the Jupiter business post-integration which started in 2020 and redundancies relating specifically to the Merian acquisition.
Pension costs
The Group contributes to a number of defined contribution pension schemes for the benefit of its employees. Contributions in respect of the UK
employees (at the rate of up to 15% of gross salary) are made into the Jupiter Pension Scheme whose financial statements are available from the trustees at
the registered office of the Company. No liability is included in the balance sheet as no obligations were outstanding at the balance sheet date.
Contributions made by the Group are charged to the consolidated income statement as they become payable in accordance with the rules of
the schemes.
Fund units
As described in Note 5(i), deferred bonuses can be deferred into either options over the Company’s shares or a cash equivalent into units in the Group’s
funds. The expense included within wages and salaries in the income statement in relation to fund units for the year ended 31 December 2021 was £59.4m
(2020: £32.8m).
Where bonuses are deferred into fund units, the fair value of the award is expensed over the vesting period and included within staff costs. The liability is
revalued at each balance sheet date to the expected settlement amount, being the current market value of the underlying fund units adjusted for the
proportion of the vesting period that has passed. Any increase or decrease in value is recognised in the income statement within staff costs. The liability
is included in the balance sheet as part of accrued expenses within trade and other payables (see Note 18). Long-Term Incentive plans (LTIP) with
performance conditions attached have been granted in fund units in 2021.
The Group hedges its exposure to price fluctuations in the underlying fund units by purchasing the fund units at the date of grant. These are included
within financial assets at fair value through profit or loss (FVTPL) in the balance sheet. Changes in the fair value of the units are recognised in the income
statement within staff costs in order to match the gains and losses of both the hedging instrument and the hedged item within the same line item of the
income statement.
The Group provides a sensitivity analysis to show the impact to the Group’s profit before taxation in the event that forfeiture and performance condition
assumptions exceed or are below the Group’s estimations on fund unit awards by the stated percentages:
Impact on the income statement of a change in leaver assumptions
2021
£m
2020
£m
+5% (2.1) (0.6)
-5% 0.6 0.5
Impact on the income statement of a change in performance condition vesting assumptions
2021
£m
2020
£m
+25% 0.2 –
-25% (0.2) –
The use of estimation in the calculation of fund unit awards
At the year end, the Group had accrued £79.6m of deferred fund unit awards. Each year, existing awards vest and new awards are made. Given their
significance as a form of employee remuneration for the Group, fund unit awards have been included as an area where the use of estimation is
important in Note 27. The principal estimations made relate to:
• forfeitures (where awardees leave the Group as ‘bad’ leavers and therefore forfeit unvested awards) and accelerations (where awardees are ‘good’
leavers and their awards continue to vest but there is no longer an extended service period condition); and
• the satisfaction of performance conditions attached to LTIP awards.
These estimates are reviewed regularly and the charge to the income statement is adjusted appropriately (at the end of the relevant scheme as a
minimum). The sensitivity analysis demonstrates that the risk of material adjustment as a result of changes to our estimations in respect of granted
awards by 5% for leavers and 25% for performance condition assumptions is not considered to be significant or material.
139Jupiter Fund Management plc | Annual Report & Accounts 2021
Average number of employees
The monthly average number of persons employed by the Group during the year, including Executive Directors, by activity is:
2021
Number
2020
Number
Fund management 139 116
Distribution and marketing 143 145
Infrastructure and operations 302 332
584 593
Information regarding Executive Directors’ aggregate emoluments of £3.6m (2020: £2.9m) is set out in the Remuneration report.
5. Share-based payments
The Group engages in share-based payment transactions in respect of services receivable from certain employees by granting the right to either shares
or options over shares, subject to certain vesting conditions and exercise prices. These have been accounted for as equity-settled share-based payments.
The fair value of the awards granted in the form of shares or share options is recognised as an expense over the appropriate performance and vesting
period. The corresponding credit is recognised in retained earnings within total equity. The fair value of the awards is calculated using an option pricing
model, the principal inputs being the market value on the date of award, discounted for any dividends forgone over the holding period of the award, and
an adjustment for expected and actual levels of vesting, which includes estimating the number of eligible employees leaving the Group and the number of
employees satisfying the relevant performance conditions. Shares and options vest on the occurrence of a specified event under the rules of the relevant plan.
A summary of the charge taken to the income statement (excluding social security) for each share-based payment arrangement is shown below:
2021
£m
2020
£m
Deferred Bonus Plan (DBP) 20.4 15.7
Long-term Incentive Plan (LTIP) 1.6 2.8
Deferred Earn Out (DEO) 2.3 1.1
Sharesave Plan (SAYE) 0.3 (0.2)
Share Incentive Plan (SIP) 0.4 0.4
Free Share Awards (FSA) 0.5 –
Total (Note 4) 25.5 19.8
The fair value of the services provided by employees has been calculated indirectly by reference to the fair value of the equity instruments granted. Fair
value amounts for the options granted under the DBP, LTIP and SAYE schemes were determined using a Black-Scholes option-pricing method and the
following assumptions:
2021 2020
DBP 2020 LTIP 2021 SAYE 2021 DBP 2019 LTIP 2020 SAYE 2020
Weighted average share price £2.81 £2.81 £2.51 £2.71 £2.80 £2.13
Weighted average exercise price – – £2.15 – – £1.65
Weighted average expected volatility 35.4% 32.1% 33.7% 27.0% 28.7% 32.4%
Weighted average option life (years) 1.7 4.2 4.1 2.5 4.4 4.3
Weighted average dividend yield – – 6.8% – – 7.6%
Weighted average risk-free interest rate 0.8% 1.1% – – (0.1)% –
Expected volatility for options granted in 2021 and 2020 has been calculated using the historical volatility of the Group.
The numbers above in relation to the LTIP include Joiner Plans as both schemes have a similar structure.
The Group provides a sensitivity analysis to show the impact to the Group’s profit before taxation in the event that forfeiture and performance condition
assumptions exceed or are below the Group’s estimations on share-based payments by the stated percentages:
Impact on the income statement of a change in leaver assumptions
2021
£m
2020 (restated)
1
£m
+5% (1.8) (1.4)
-5% 1.2 1.2
Impact on the income statement of a change in performance condition vesting assumptions
2021
£m
2020
£m
+25% 1.9 3.1
-25% (2.0) (3.1)
1. 2020 has been restated to split out the sensitivity analysis on share-based payments and fund awards.
Notes to the Group Financial Statements
continued
140 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
The use of estimation in the calculation of share-based payments
At the year end, the Group had approximately 28.2 million share-based awards in issue. Each year, existing awards vest and new awards are made. Around
14.4 million share-based awards were issued in 2021 in the form of deferred bonus and LTIP awards. In addition, as part of the Merian acquisition in 2020,
DEO awards over shares to a maximum value of £20.0m were granted. Given their significance as a form of employee remuneration for the Group,
share-based payments have been included as an area where the use of estimation is important in Note 27. The principal estimations made relate to:
• forfeitures (where awardees leave the Group as ‘bad’ leavers and therefore forfeit unvested awards) and accelerations (where awardees are ‘good’
leavers and their awards continue to vest but there is no longer an extended service period condition); and
• the satisfaction of performance conditions attached to certain LTIP awards and to share-based DEO awards.
These estimates are reviewed regularly and the charge to the income statement is adjusted appropriately (at the end of the relevant scheme as a
minimum). The sensitivity analysis demonstrates that the risk of material adjustment as a result of changes to our estimations in respect of granted
awards by 5% for leavers and 25% for performance condition assumptions is not considered to be significant or material.
(i) Deferred Bonus Plan
All employees of the Group who are eligible for a bonus over a certain level, as determined by the Remuneration Committee, are required to participate in
the DBP. The DBP provides for compulsory deferral of a proportion of bonus. Deferrals are made into either options over the Company’s shares or a cash
amount equivalent to the value of units in the Group’s funds (see Note 4 for information on the treatment of fund units). The awards in respect of DBP are
granted after the year end to which they relate. The awards made in 2020 and 2021, in relation to 2019 and 2020 performance respectively, were granted in
the form of nil-cost options over the Company’s shares, at a price calculated as the market price immediately prior to the date of the award. Awards will
also be made in 2022 in relation to 2021 performance, thus a charge for these awards has been taken to the income statement in 2021.
The following table illustrates the number and weighted average exercise price (WAEP) of, and movement in, share options during the year:
Options outstanding
2021 2020
Number m WAEP £ Number m WAEP £
At 1 January 10.7 – 9.4 –
Granted 9.5 – 6.6 –
Exercised (5.8) – (5.3) –
Forfeited (0.1) – – –
At 31 December 14.3 – 10.7 –
Exercisable at 31 December 0.8 – 0.7 –
There were 5.8m options exercised under this plan in 2021 (2020: 5.3m). The weighted average share price at the date of exercise of these options was £2.65
(2020: £2.21).
The weighted average fair value of options granted under this plan during the year was £2.81 (2020: £2.94).
The weighted average remaining contractual life of the share options outstanding under this plan at 31 December 2021 was 1.5 years (31 December 2020: 1.6
years).
(ii) Long-Term Incentive Plan (LTIP)
All employees are eligible to participate in the LTIP. Awards are made at the discretion of the Remuneration Committee and may be granted in the form of
options (either at market value, nominal value or nil cost), restricted shares or conditional share awards over the Company’s shares. The LTIP awards
granted in 2021 and 2020 took the form of options over the Company’s shares.
Options outstanding
2021 2020
Number m WAEP £ Number m WAEP £
At 1 January 8.3 0.12 8.7 0.13
Granted 4.4 – 3.8 –
Exercised (0.5) 0.01 (3.5) 0.02
Forfeited (2.6) 0.38 (0.7) 0.12
At 31 December 9.6 – 8.3 0.12
Exercisable at 31 December 1.3 0.02 1.4 0.02
There were 0.5m options exercised under this plan in 2021 (2020: 3.5m). The weighted average share price at the date of exercise of these options was £2.70
(2020: £2.05).
The weighted average fair value of options granted under this plan during the year was £2.82 (2020: £2.86).
The weighted average remaining contractual life of the share options outstanding under this plan at 31 December 2021 was 2.5 years (31 December 2020: 2.4
years).
(iii) Deferred Earn Out (DEO)
As part of the sale and purchase agreement on the acquisition of Merian, certain former Merian shareholders, who continued in employment with Jupiter
post-completion, were granted nil-cost options over the Company’s shares up to a maximum value of £20.0m. For these awards to vest, the awardees
must meet certain performance conditions, based on net revenues, on 1 July 2023. On this date, the awards will be converted to a number of shares,
corresponding to the average closing price of a Company share over the three dealing days ending immediately before 1 July 2023 and the fulfilment of the
performance conditions. Should performance conditions be fulfilled, the awards will be exercisable on 1 July 2024 and 1 July 2025. Exercise of these options
will be dependent on the awardees remaining in the employment of the Group until these dates.
141Jupiter Fund Management plc | Annual Report & Accounts 2021
5. Share-based payments continued
(iv) Sharesave Plan
All eligible UK employees may participate in the Group’s Sharesave Plan, which was introduced in 2010. Under the terms of this plan, employees may enter
into contracts to save up to the maximum amount permitted under legislation and, at the expiry of a fixed three or five-year term, have the option to use
these savings to acquire shares in the Company at a discounted price, calculated under the rules of the plan (currently a 20% discount to the market price
at the date of award). Participants in the plan have six months from the date of vesting to exercise their option.
Options outstanding
2021 2020
Number m WAEP £ Number m WAEP £
At 1 January 3.1 1.83 1.5 3.01
Granted 0.4 2.15 2.7 1.65
Exercised (0.1) 1.67 – 3.21
Forfeited (0.7) 2.05 (1.1) 3.00
At 31 December 2.7 1.82 3.1 1.83
Exercisable at 31 December 0.1 3.35 – –
The weighted average share price at the date of exercise of these options was £2.61 (2020: £3.77) per ordinary share.
The weighted average fair value of the options granted under this plan during the year was £0.44 (2020: £0.41).
The range of exercise prices of options granted under this plan is between £1.65 and £4.29.
The weighted average remaining contractual life of the share options outstanding under this plan at 31 December 2021 was 3.1 years
(31 December 2020: 3.8 years).
(v) Share Incentive Plan (SIP)
All eligible UK employees may participate in the Group’s Share Incentive Plan, which was introduced in 2013. Under the terms of this plan, employees may
contribute from pre-tax salary up to the maximum amount permitted under legislation in any tax year, to be used to acquire shares in the Company at
the market price on the relevant date. Matching shares are then awarded by the Company on a one matching share for each share purchased basis.
The matching shares are subject to forfeiture where the employee leaves employment with the Group within three years of their award.
The number of matching shares purchased under this scheme during the year was 0.1m (2020: 0.2m).
(vi) International Share Award (ISA)
All non-UK employees may participate in the Group’s International Share Award, which was introduced in 2017 to create a non-UK plan similar to the
Sharesave Plan. Under the terms of this award, international employees are offered the opportunity to be granted a share option which is exercisable after
three years and three months. The exercise price is set at the same level as for the Sharesave Plan. Participants in the plan have six months from the date
of vesting to exercise their option.
The number of awards made during the year was 0.1m (2020: 0.1m).
(vii) Free Share Award (FSA)
All eligible UK employees may participate in the Free Share Award which was introduced in 2020. All eligible employees receive nil-cost options which will
vest over a three-year period.
The number of awards made during the year was 0.4m (2020: 0.5m).
6. Other (losses)/gains
Other (losses)/gains relate principally to net losses (2020: net gains) made on a hedging instrument purchased to mitigate the Group’s exposure to pricing
movements in its own shares in respect of share-based awards it has granted and on the Group’s seed investment portfolio and derivative instruments
held to provide economic hedges against that portfolio. The portfolio and derivatives are held at fair value through profit or loss (see Note 14). Gains and
losses comprise both realised and unrealised amounts.
2021
£m
2020
£m
Dividend income 1.1 0.8
Gains on financial instruments designated at fair value through profit or loss upon initial recognition 9.7 14.3
Losses on financial instruments at fair value through profit or loss (15.2) (11.8)
Other (losses)/gains (4.4) 3.3
Notes to the Group Financial Statements
continued
142 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
7. Finance costs
Finance costs principally relate to interest payable on Tier 2 subordinated debt notes and the unwinding of the discount applied to lease liabilities (see
Notes 17 and 12 respectively for further details). Finance costs also include ancillary charges for commitment fees and arrangement fees associated with the
revolving credit facility. Interest payable is charged on an accrual basis using the effective interest method.
2021
£m
2020
£m
Interest on subordinated debt 4.7 3.1
Interest on lease liabilities 1.6 1.8
Finance cost on the revolving credit facility 0.3 0.2
Interest on bank deposits 0.2 –
6.8 5.1
8. Income tax expense
The Group pays taxes according to the rates applicable in the countries in which it operates. The Group’s headquarters are in the UK. Most taxes are
recorded in the income statement and relate to taxes payable for the reporting period (current tax), but there is also a charge or credit relating to tax
payable for future periods due to income or expenses being recognised in a different period for tax and accounting purposes (deferred tax). Tax is charged
to equity when the tax benefit exceeds the cumulative income statement expense on share plans.
The Group provides for current tax according to the tax laws of each jurisdiction in which it operates using tax rates that have been enacted or
substantively enacted by the balance sheet date. Management periodically evaluates positions taken in tax returns in respect of situations in which
applicable tax regulation is subject to interpretation. It establishes provisions, where appropriate, on the basis of amounts expected to be paid to the tax
authorities.
Deferred tax is provided, using the liability method, on temporary differences at the reporting date between the tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes. Deferred tax is recognised in respect of all temporary differences that have originated but not reversed
at the balance sheet date, where transactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future
have occurred at the balance sheet date. A deferred tax asset is recognised when it is considered recoverable and therefore recognised only when, on the
basis of all available evidence, it can be regarded as probable that there will be suitable taxable profits against which to recover carried forward tax losses
and from which the future reversal of underlying temporary differences can be deducted.
Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the temporary differences are expected to reverse,
based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax that has arisen in respect of equity
items, such as tax credits in respect of share-based payments where the fair value of awards exceeds the accounting charge, are recognised directly in
equity and not in the income statement.
2021
£m
2020
£m
Current tax
Tax on profits for the year 45.0 27.7
Adjustments in respect of prior years (1.3) (0.3)
Total current tax 43.7 27.4
Deferred tax
Origination and reversal of temporary differences (9.8) (0.5)
Adjustments in respect of prior years 0.2 0.4
Total deferred tax (Note 13) (9.6) (0.1)
Income tax expense 34.1 27.3
Total tax expense
The corporation tax rate for 2021 was 19% (2020: 19%). The tax charge in the year is lower (2020: higher) than the standard rate of corporation tax in the UK
and the differences are explained below:
Factors affecting tax expense for the year
2021
£m
2020
£m
Profit before taxation 183.7 132.6
Taxation at the standard corporation tax rate (19%; 2020: 19%) 34.9 25.2
Non-taxable expenditure – 1.6
Other permanent differences (1.4) 0.3
Adjustments in respect of prior years (1.1) 0.1
Effect of differences in overseas tax rates 0.3 0.1
Impact of substantively enacted tax rate change on deferred tax balances 1.4 –
Total tax expense 34.1 27.3
143Jupiter Fund Management plc | Annual Report & Accounts 2021
9. Earnings per share
Basic earnings per share (EPS) is calculated by dividing the profit for the year by the weighted average number of ordinary shares outstanding during the
year less the weighted average number of own shares held. Own shares are shares held in an EBT for the benefit of employees under the vesting, lock-in
and other incentive arrangements in place.
Diluted EPS is calculated by dividing the profit for the year by the weighted average number of ordinary shares outstanding during the year for the
purpose of basic EPS plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary
shares into ordinary shares.
For the purposes of calculating EPS, the share capital of the parent is calculated as the weighted average number of ordinary shares in issue.
The weighted average number of ordinary shares used in the calculation of EPS is as follows:
Weighted average number of shares
2021
Number
m
2020
Number
m
Issued share capital
1
553.1 505.4
Less time apportioned own shares held (10.6) (10.5)
Weighted average number of ordinary shares for the purpose of basic EPS 542.5 494.9
Add back weighted average number of dilutive potential shares 12.9 10.6
Weighted average number of ordinary shares for the purpose of diluted EPS 555.4 505.5
1. The Group issued 95.4m ordinary shares on 1 July 2020 (see Note 19).
Earnings per share
2021
p
2020
p
Basic 27.6 21.3
Diluted 26.9 20.8
10. Goodwill
Goodwill arising on acquisitions, being the excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and
contingent liabilities acquired, is capitalised in the consolidated balance sheet. Goodwill is carried at cost less provision for impairment. The carrying value
of goodwill is not amortised but is tested annually for impairment or more frequently if any indicators of impairment arise. Goodwill is allocated to
cash-generating units (CGUs) for the purpose of impairment testing, with the allocation to those CGUs or groups of CGUs that are expected to benefit
from the business combination in which the goodwill arose. Impairment losses on goodwill are not reversed.
Goodwill relates to the 2007 acquisition of Knightsbridge Asset Management Limited (£341.2m) and the 2020 acquisition of Merian Global Investors Limited
(£229.4m).
2021
£m
2020
£m
Goodwill 570.6 570.6
As the Group operates a single asset management business segment and does not allocate costs between investment strategies or individual funds, it has
determined that it has a single CGU for the purpose of assessing the carrying value of goodwill. In performing the impairment test, management prepares a
calculation of the recoverable amount of the goodwill, using the value in use approach, and compares this to the carrying value.
The use of estimation and judgement in valuing goodwill
For the impairment test, the recoverable amount for the goodwill asset was based on the net present value of the Group’s future earnings. The net
present value was calculated using a discounted cash flow model, with reference to the Group’s projected cash flows over a period of five years,
long-term growth rates of 3% (2020: 4%) based on dividend history and forecasts, and a cost of capital of 11% (2020: 10%), which is based
on the Group’s weighted average cost of capital. A significant headroom was noted, and therefore no impairment was implied. Applying
stressed scenarios, such as increasing the cost of capital to 20% and/or reducing growth projections to nil would not result in the recognition of
impairment losses.
This impairment test requires assumptions to be made, principally concerning the future levels of profitability, and is an area where the use of estimation
and judgement are therefore important. Given the size of the asset and potential impact of impairment losses on the Group’s financial position, this has
been included as an area where the use of estimation is important in Note 27. However, given the headroom resulting from the impairment test, the risk
of material adjustment is not deemed significant. The Group also reviews the accuracy of historical estimates of future profitability to assess whether
impairment tests from prior years would have given a different result had actual profits been equal to past estimates. No instances have been identified
where this would have been the case.
The Group has also applied judgement in determining CGU levels within its business for the purposes of impairment testing of goodwill and in
concluding that the whole Group operates as a single CGU.
No impairment losses have been recognised in the current or preceding years.
Notes to the Group Financial Statements
continued
144 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
11. Intangible assets
Intangible assets principally comprise the expected value of investment management contracts acquired as part of the Merian acquisition, based on the
premise that their value is equal to the present value of the earnings they are expected to generate. The cost of intangible assets acquired in the business
combination is the fair value as at the date of acquisition. In relation to the investment management contracts, the useful lives were assessed as being
finite and they are amortised over their useful economic lives. The useful economic lives of the investment management contracts acquired were assessed
as a maximum of four years. The amortisation expense on intangible assets with finite lives has been recognised in the consolidated income statement on
a straight-line basis.
Following initial recognition, intangible assets are held at cost less any accumulated amortisation and any provision for impairment. Assets that are subject
to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher
of an asset’s fair value less costs to sell and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there
are separately identifiable cash flows (CGUs).
Other intangible assets acquired separately are measured on initial recognition at cost.
Other intangible assets recognised are computer software. Software licences acquired are capitalised at the cost incurred to bring the software into use
and are amortised on a straight-line basis over their estimated useful lives, which are estimated as being five years. Costs associated with developing or
maintaining computer software programs that do not meet the capitalisation criteria under IAS 38 are recognised as an expense as incurred.
An assessment is made at each reporting date as to whether there is any indication that an asset in use may be impaired. If any such indication exists and
the carrying values exceed the estimated recoverable amount at that time, the assets are written down to their recoverable amount. The recoverable
amount is measured as the greater of fair value less costs to sell and value in use. Non-financial assets that have suffered impairment are reviewed for
possible reversal of the impairment at each reporting date.
The Directors have reviewed the intangible assets as at 31 December 2021 and 31 December 2020 and have concluded there are no indicators of
impairment.
2021 2020
Computer
software
£m
Investment
management
contracts
£m
Total
£m
Computer
software
£m
Investment
management
contracts
£m
Total
£m
Cost
At 1 January 18.2 75.0 93.2 16.9 – 16.9
Additions 2.1 – 2.1 1.3 75.0 76.3
Disposals (0.2) – (0.2) – – –
At 31 December 20.1 75.0 95.1 18.2 75.0 93.2
Accumulated amortisation
At 1 January (13.0) (9.4) (22.4) (11.1) – (11.1)
Charge for the year (1.8) (18.8) (20.6) (1.9) (9.4) (11.3)
Disposals – – – – – –
At 31 December (14.8) (28.2) (43.0) (13.0) (9.4) (22.4)
Net book value
At 31 December 5.3 46.8 52.1 5.2 65.6 70.8
145Jupiter Fund Management plc | Annual Report & Accounts 2021
12. Property, plant and equipment
Property, plant and equipment is made up of leasehold improvements, office furniture and equipment and right-of-use lease assets and is stated at cost,
less accumulated depreciation and any provision for impairment. Cost includes expenditure that is directly attributable to the acquisition of the assets.
Subsequent costs are included in an asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repair and maintenance
expenditures are charged to the income statement during the financial year in which they are incurred. Depreciation is calculated on a straight-line basis to
allocate the cost of each asset over its estimated useful life as follows:
Leasehold improvements 19 years
Office furniture and equipment 5 years
Right-of-use assets Shorter of the asset’s useful life and the lease term
The assets’ useful economic lives and residual values are reviewed at each financial year end and adjusted if appropriate. An item of property, plant and
equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on the disposal of the
asset, calculated as the difference between the net disposal proceeds and the carrying amount of the item, is included in the income statement in the year
the item is sold or retired.
2021 2020
Right-of-use
assets
£m
Leasehold
improvements
£m
Office
furniture and
equipment
£m
Total
£m
Right-of-use
assets
£m
Leasehold
improvements
£m
Office
furniture and
equipment
£m
Total
£m
Cost
At 1 January 48.3 5.4 13.8 67.5 48.3 5.2 12.9 66.4
Additions 0.9 0.3 1.1 2.3 0.4 0.2 1.1 1.7
Acquired as part of business combination – – – – 15.5 – – 15.5
Lease modifications – – – – (15.5) – – (15.5)
Disposals – – – – (0.4) – (0.2) (0.6)
At 31 December 49.2 5.7 14.9 69.8 48.3 5.4 13.8 67.5
Accumulated depreciation
At 1 January (7.1) (1.7) (11.3) (20.1) (3.6) (1.5) (9.6) (14.7)
Charge for the year (3.9) (0.3) (1.4) (5.6) (3.9) (0.2) (1.9) (6.0)
Disposals – – – – 0.4 – 0.2 0.6
At 31 December (11.0) (2.0) (12.7) (25.7) (7.1) (1.7) (11.3) (20.1)
Net book value
At 31 December 38.2 3.7 2.2 44.1 41.2 3.7 2.5 47.4
Right-of-use assets of £15.5m were acquired on 1 July 2020 as part of the Merian acquisition. On the same date, the right-of-use asset acquired was
modified and the lease liability was remeasured as the Group did not expect to gain any further economic benefits from the asset. The difference
between the remeasurement and the reduction in the liability due to reassignment of the lease was recognised within administrative expenses.
Leases
(i) Amounts recognised in the balance sheet
The balance sheet shows the following amounts relating to leases:
Notes
2021
£m
2020
£m
Right-of-use assets
Buildings 38.0 40.8
Equipment 0.1 0.2
Motor vehicles 0.1 0.2
38.2 41.2
Lease liabilities
Current 18 4.0 3.9
Non-current 18 47.1 50.3
51.1 54.2
Additions to the right-of-use assets in 2021 were £0.9m (2020: £15.9m).
Notes to the Group Financial Statements
continued
146 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
(ii) Amounts recognised in the income statement
The income statement shows the following amounts relating to leases:
2021
£m
2020
£m
Depreciation charge of right-of-use assets
Buildings 3.6 3.6
Equipment 0.2 0.1
Vehicles 0.1 0.2
3.9 3.9
Interest expense (included in finance costs) 1.6 1.8
Expense relating to short-term leases (included in administrative expenses) 0.5 0.1
The total cash outflow for leases in 2021 was £5.2m (2020: £6.7m).
(iii) The Group’s leasing activities and how these are accounted for
The Group leases various offices, equipment and cars. Rental contracts are typically made for fixed periods of 2 to 20 years but may have extension
options as described below. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease
agreements do not impose any covenants, but leased assets may not be used as security for borrowing purposes.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease
payments:
• Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• Variable lease payments that are based on an index or a rate, initially measured using the index or rate as at the commencement date;
• Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option; and
• Payments to be made under reasonably certain extension options.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for
leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to
obtain an asset of similar value in a similar economic environment with similar terms and conditions.
To determine the incremental borrowing rate, the Group:
• Uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk; and
• Makes adjustments specific to the lease, for example, term, country, currency and security.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until
they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the
right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to the income statement over the lease period so as to
produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Significant area of estimation and judgement
Calculation of leased assets and liabilities requires the use of both estimation and judgement. The determination of the lease term for each lease involves
the Group assessing any extension and termination options, the enforceability of such options, and judging whether it is reasonably certain that they will
be exercised. Several of the Group’s leases contain such clauses. For each lease, a conclusion was reached on the overall likelihood of the option being
exercised.
Right-of-use assets are measured at cost comprising the following:
• The amount of the initial measurement of lease liability;
• Any lease payments made at or before the commencement date less any lease incentives received;
• Any initial direct costs; and
• Restoration costs.
The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
Payments associated with short-term leases are recognised on a straight-line basis as an expense in the income statement. Short-term leases are leases
with a lease term of 12 months or less.
Extension and termination options are included in a number of property and equipment leases across the Group. These are used to maximise operational
flexibility in terms of managing the assets used in the Group’s operations. The majority of extension and termination options held are exercisable only by
the Group and not by the respective lessor.
147Jupiter Fund Management plc | Annual Report & Accounts 2021
13. Deferred tax
Analysis of the Group’s deferred tax assets and liabilities is shown below:
Share-based
payments
£m
Other
£m
Intangible assets
arising upon
consolidation
£m
Total
£m
Assets 7.4 12.6 – 20.0
Liabilities – – (12.5) (12.5)
At 31 December 2020 7.4 12.6 (12.5) 7.5
Assets 10.6 17.0 – 27.6
Liabilities – – (10.3) (10.3)
At 31 December 2021 10.6 17.0 (10.3) 17.3
Movements in temporary differences between the balance sheet dates have been reflected in the income statement and the statement of changes in
equity as follows:
Share-based
payments
£m
Other
£m
Intangible assets
arising upon
consolidation
£m
Total
£m
At 1 January 2020 10.3 6.4 – 16.7
Added through acquisition – 6.0 (14.3) (8.3)
(Charged)/credited to the income statement (1.9) 0.2 1.8 0.1
Charged to equity (1.0) – – (1.0)
At 31 December 2020 7.4 12.6 (12.5) 7.5
Credited to the income statement 3.1 4.3 2.2 9.6
Credited to equity 0.1 0.1 – 0.2
At 31 December 2021 10.6 17.0 (10.3) 17.3
The other deferred tax balances at 31 December 2020 and 2021 include short-term timing differences and temporary differences between depreciation and
capital allowances.
Deferred taxes at the balance sheet date reflected in these financial statements have been measured using the relevant enacted or substantively enacted
tax rate for the year in which they are expected to be realised or settled.
In the Spring Budget 2020, the UK Government announced that from 1 April 2020 the corporation tax rate will remain at 19% (rather than reducing to 17%,
as previously enacted). The Government made a number of budget announcements on 3 March 2021. These include confirming that the rate of
corporation tax will increase to 25% from 1 April 2023. This new law was substantively enacted on 24 May 2021. Deferred taxes at the balance sheet date
have been measured using these enacted or substantively enacted tax rates and reflected in the financial statements.
Notes to the Group Financial Statements
continued
148 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
14. Financial instruments held at fair value
Financial instruments
Financial assets and liabilities are recognised when the Group becomes party to the contractual provisions of an instrument. They are initially measured at
fair value adjusted for transaction costs, except for financial assets classified as at fair value through profit or loss (FVTPL) where transaction costs are
immediately recognised in the income statement. Financial assets are derecognised when the rights to receive cash flows from the assets have expired or
where they have been transferred and the Group has also transferred substantially all risks and rewards of ownership. Financial liabilities are derecognised
when the obligation under the liability has been discharged, cancelled or has expired.
Financial assets
The Group’s financial assets include cash and short-term deposits, trade and other receivables, seed investments in pooled funds and derivative financial
instruments. Financial assets are classified as being at FVTPL or at amortised cost. The classification adopted by the Group depends on the Group’s
business model for managing the financial assets and their contractual cash flow characteristics.
Financial assets at fair value through profit or loss
Financial assets at FVTPL include seed investments in pooled funds which are managed and evaluated on a fair value basis, in accordance with the
documented strategy, as well as units or shares in funds managed by the Group which have been acquired for the purposes of hedging deferred
compensation awards. Financial assets are classified in this category if they have been acquired principally for the purpose of selling in the short term or if
they serve as economic hedges to fund-linked liabilities. Other financial assets at FVTPL comprise derivative instruments which are held to provide an
economic hedge in respect of specific risk exposures (see Note 24). Financial assets at FVTPL are carried at fair value, with gains and losses recognised
in the income statement in the period in which they arise either in other gains/losses or in administrative expenses for instruments held to provide an
economic hedge against fund unit awards. Assets in this category are classified as current assets.
Financial liabilities
The Group’s financial liabilities include loans and borrowings, trade and other payables, derivative financial instruments and the non-controlling interests
in funds that have been consolidated as subsidiaries.
Financial liabilities at fair value through profit or loss
Financial liabilities at FVTPL are carried at fair value, with gains and losses recognised in the income statement within other gains/losses in the period in
which they arise. Financial liabilities at FVTPL comprise non-controlling interests in consolidated funds.
As at 31 December, the Group held the following financial instruments measured at fair value:
2021
£m
2020
£m
Financial assets
Financial assets at FVTPL 302.5 257.4
Other financial assets at FVTPL 1.0 3.7
303.5 261.1
2021
£m
2020
£m
Financial liabilities
Financial liabilities at FVTPL (52.3) (89.2)
Other financial liabilities at FVTPL – (0.2)
(52.3) (89.4)
A further analysis of the Group’s financial assets is provided below:
2021
£m
2020
£m
Direct seed investment at fair value 142.3 138.3
Additional financial assets due to consolidation of funds 44.3 74.0
Derivatives and fund unit hedges 61.4 48.8
Fees receivable in shares 55.5 –
Total financial assets 303.5 261.1
149Jupiter Fund Management plc | Annual Report & Accounts 2021
15. Trade and other receivables
Trade and other receivables are recognised initially at fair value. The Group holds trade and other receivables to collect contractual cash flows, which are
solely payments of principal and interest, and are therefore subsequently measured at amortised cost using the effective interest method, less loss
allowances.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses (ECLs) for trade receivables at an amount equal to lifetime ECLs. The
ECLs on trade receivables are calculated based on actual historic credit loss experience over the preceding three to five years and are adjusted for
forward-looking estimates. ECLs are applied to the total balance of non-credit impaired trade receivables.
The Group considers a trade receivable to be credit impaired when one or more detrimental events have occurred, such as significant financial difficulty
of the client or it becoming probable that the client will enter bankruptcy or other financial reorganisation.
When a trade receivable is credit impaired, it is written off against trade receivables and the amount of the loss is recognised in the income statement.
Subsequent recoveries of amounts previously written off are credited to the income statement. In line with the Group’s historical experience, and after
consideration of current credit exposures, the Group does not expect to incur any credit losses and has not recognised any ECLs in the current year (2020:
£nil) (see Note 24).
Trade and other receivables, including loans to employees, are included in current assets except where they have maturities greater than 12 months after
the balance sheet date. These are classified as non-current assets.
Accrued income relates to accrued interest and accrued management, performance and registration fees. It is based on the latest available information
and therefore involves a degree of estimation relating to the valuation of underlying AUM.
Non-current
2021
£m
2020
£m
Deferred acquisition and commission costs – 0.1
Rent deposits 0.5 0.4
0.5 0.5
Current
2021
£m
2020
£m
Trade receivables 53.8 153.3
Prepayments 8.1 9.6
Accrued income 81.6 22.6
Deferred acquisition and commission costs 1.5 1.8
145.0 187.3
Trade receivables are non-interest bearing and are generally collected within four working days. An analysis of the ageing profile of trade receivables is
disclosed in Note 24. Within trade and other receivables, the amount receivable from contracts with customers is £126.9m (2020: £159.9m).
16. Cash and cash equivalents
2021
£m
2020
£m
Cash at bank and in hand 193.5 179.7
Cash held by EBT and seed investment subsidiaries 3.8 8.4
197.3 188.1
Cash and cash equivalents have an original maturity of three months or less.
Cash at bank earns interest at the current prevailing daily bank rates. Short-term deposits are made for varying periods of between one and 33 days,
depending on the forecast cash requirements of the Group, and earn interest at the respective short-term deposit rates.
Cash held by the EBT and seed investment subsidiaries is not available for use by the Group.
17. Loans and borrowings
On 27 April 2020 the Group issued £50.0m of Tier 2 subordinated debt notes at a discount of £0.5m. Issue costs were £0.5m and the net proceeds were
therefore £49.0m. These notes will mature on 27 July 2030 and bear interest at a rate of 8.875% per annum to 27 July 2025, and at a reset rate thereafter.
The Group has the option to redeem all of the notes from 27 April 2025 onwards. The fair value of the notes as at 31 December 2021 was £58.8m (2020:
£54.0m).
As part of the Merian acquisition on 1 July 2020, the Group acquired £111.0m of bank loans. These loans were repaid in full on 1 July 2020.
2021
£m
2020
£m
Non-current subordinated debt in issue 49.3 49.2
The Group’s revolving credit facility (RCF) enables it to borrow up to £80.0m (2020: £80.0m). The facility expires in April 2023 and was undrawn at
31 December 2020 and 31 December 2021. The RCF was undrawn throughout both 2020 and 2021.
Interest on the RCF is payable at a rate per annum of SONIA (sterling overnight index average) reference rate plus a margin of 0.6%. A commitment fee is
payable on the RCF at a rate of 0.21% per annum on the undrawn balance. A utilisation fee is also payable at a rate of 0.08% per annum when up to 33% of
the facility is drawn, 0.15% per annum when 33% to 66% of the facility is drawn, and 0.3% per annum when more than 66% of the facility is drawn.
Notes to the Group Financial Statements
continued
150 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
18. Trade and other payables
Trade and other payables are recognised initially at fair value and are subsequently measured at amortised cost using the effective interest rate method.
Amortised cost is calculated by taking into account any issue costs and any discount or premium on settlement.
The Group may from time to time be exposed to potential legal claims, regulatory action and related costs arising from its activities through the normal
course of its business. Where such claims and costs arise, there is often uncertainty over whether a payment will be required and the quantum and timing
of that payment. The Directors are not currently aware of any legal claims or regulatory proceedings which are likely to lead to a material liability.
The most significant accruals at the year end relate to cash and fund award bonuses. At the end of each financial year, the Group recognises accrued
expenses for bonuses accrued but not yet paid in respect of service attributable to that year.
Contract liabilities represent performance obligations that are unsatisfied or partially unsatisfied as at the end of the reporting period. The Group’s
contract liabilities relate to initial charges and commissions where payment has been received upfront but revenue is recognised over the expected lives
of the contracts, which are estimated to be up to six years, on a straight-line basis.
Non-current
2021
£m
2020
£m
Lease liabilities 47.1 50.3
Accrued expenses 41.9 29.8
Social security and other taxes 13.2 6.8
Contract liabilities 0.1 0.5
102.3 87.4
Current
2021
£m
2020
£m
Accrued expenses 156.4 126.7
Trade payables 38.4 53.7
Social security and other taxes 18.2 16.4
Other payables 4.6 11.3
Lease liabilities 4.0 3.9
Contract liabilities 0.6 0.8
222.2 212.8
Accrued expenses of £36.8m (2020: £19.6m) included within non-current trade and other payables and £42.8m (2020: £29.9m) included within current trade
and other payables relate to deferred bonus awards whose settlement amounts will be based on the value of units in the Group’s funds (see Note 4).
The amount of revenue recognised in the current reporting period that was included in the contract liability balance at the beginning of the period was
£0.8m (2020: £1.0m). The Group expects to recognise revenue for the remaining performance obligations over the following durations:
Contract liabilities
2021
£m
2020
£m
< 1 year 0.6 0.8
1-5 years 0.1 0.5
0.7 1.3
151Jupiter Fund Management plc | Annual Report & Accounts 2021
19. Share capital and share premium (restated)
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a
deduction, net of tax, from the proceeds. On 1 July 2020, 95.4 million shares were issued in order to acquire shares in Merian.
Authorised, issued, allotted, called-up and fully paid
2021
Shares
m
2020
Shares
m
2021
£m
2020
£m
Share capital
Ordinary shares of £0.02 each 553.1 553.1 11.1 11.1
553.1 553.1 11.1 11.1
Number of ordinary shares Par value
2021
m
2020
m
2021
£m
2020
£m
Movements in ordinary shares
At 1 January 553.1 457.7 11.1 9.2
Shares issued relating to acquisition of subsidiary – 95.4 – 1.9
At 31 December 553.1 553.1 11.1 11.1
Restatement of 2020 share premium reserve
In the Group’s 2020 Annual Report and Accounts, the difference between the fair and nominal values of the 95.4 million shares issued relating to the
acquisition of Merian was credited to a share premium account. However, as the share issue related to an acquisition where at least 90% of the total
consideration took the form of equity, under Section 612 of the Companies Act 2006, it is mandatory for merger relief to be applied to such issues. As a
result, in these financial statements, the Group has restated the amount recorded in 2020 as ‘Share premium’ from £242.1m to £nil and has increased the
amount recorded within ‘Other reserves’ from £8.0m to £250.1m.
20. Reserves
(i) Own share reserve
The Group operates an EBT for the purpose of satisfying certain retention awards to employees. The holdings of this trust, which is funded by
the Group, include shares in the Company that have not vested unconditionally to employees of the Group. These shares are recorded at cost and are
classified as own shares. The shares are used to settle obligations that arise from the granting of share-based awards.
At 31 December 2021, 18.5m ordinary shares (2020: 7.2m), with a par value of £0.4m (2020: £0.2m), were held as own shares within the Group’s EBT for the
purpose of satisfying share option obligations to employees.
(ii) Other reserves (restated)
Other reserves of £250.1m (2020 restated: £250.1m) comprise the merger relief reserve of £242.1m (2020 restated: £242.1m) formed on the acquisition of
Merian in 2020 (this amount has been restated - see Note 19) and £8.0m (2020: £8.0m) that relates to the conversion of Tier 2 preference shares in 2010.
(iii) Foreign currency translation reserve
The foreign currency translation reserve of £0.3m (2020: £2.8m) is used to record exchange differences arising from the translation of the financial
statements of foreign subsidiaries.
(iv) Retained earnings
Retained earnings of £639.7m (2020: £622.5m) are the amount of earnings that are retained within the Group after dividend payments and other
transactions with owners.
21. Dividends
Dividend distributions to the Company’s shareholders are recognised in the accounting period in which the dividends are paid.
2021
£m
2020
£m
Final dividend (9.2p per ordinary share) (2020: Full-year dividend 9.2p per ordinary share) 50.4 40.8
Interim dividend (7.9p per ordinary share) (2020: 7.9p per ordinary share) 42.9 43.1
Special dividend (3.0p per ordinary share) (2020: nil per ordinary share) 16.5 –
109.8 83.9
Final/full-year dividends and special dividends are paid out of profits recognised in the year prior to the year in which the dividends are proposed/
declared and reported.
The EBT has waived its right to receive future dividends on shares held in the trust. Dividends waived on shares held in the EBT in 2021 were £1.4m (2020: £1.9m).
A final dividend for 2021 of 9.2p per share (2020: 9.2p) has been proposed by the Directors. This dividend amounts to £50.9m (before adjusting for any
dividends waived on shares in the EBT) and will be accounted for in 2022. Including the interim dividend for 2021 of 7.9p per share (2020: 7.9p), this gives a
total dividend per share of 17.1p (2020: 20.1p (including a special dividend of 3.0p per share)).
Notes to the Group Financial Statements
continued
152 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
22. Cash flows from operating activities
Notes
2021
£m
2020
£m
Operating profit 190.5 137.7
Adjustments for:
Amortisation of intangible assets 11 20.6 11.3
Depreciation of property, plant and equipment 12 5.6 6.0
Other net gains (9.4) (7.0)
Fund unit hedges (7.7) (0.9)
Share-based payments 25.5 19.8
Cash inflows on exercise of share options 0.1 0.2
Performance fee receivable in shares (55.5) –
Decrease/(increase) in trade and other receivables 39.1 (53.2)
Increase in trade and other payables 28.7 17.9
Cash generated from operations 237.5 131.8
23. Changes in liabilities arising from financing activities
2021 2020
Financial
liabilities at
FVTPL
£m
Loans and
borrowings
£m
Leases
£m
Total
£m
Financial
liabilities at
FVTPL
£m
Loans and
borrowings
£m
Leases
£m
Total
(restated)
1
£m
Brought forward at 1 January 89.2 49.2 54.2 192.6 74.9 – 57.5 132.4
New leases – – 0.2 0.2 – – 17.1 17.1
Issue of subordinated debt – – – – – 49.0 – 49.0
Changes from financing cash flows 2.8 – (5.2) (2.4) 5.7 – (6.7) (1.0)
Changes arising from obtaining or losing control
of consolidated funds (47.0) – – (47.0) – – – –
Changes in fair value 7.3 – – 7.3 8.6 – – 8.6
Interest expense – 0.1 1.6 1.7 – 0.2 1.8 2.0
Lease reassignment and modifications – – 0.3 0.3 – – (15.5) (15.5)
Liabilities arising from financing activities
carried forward at 31 December 52.3 49.3 51.1 152.7 89.2 49.2 54.2 192.6
Notes 14 17 18 14 17 18
1. Comparative data relating to 2020 has been restated to incorporate cash flows relating to lease liabilities. The impact of this restatement is to increase the brought forward balance
by £54.2m.
153Jupiter Fund Management plc | Annual Report & Accounts 2021
Notes to the Group Financial Statements
continued
24. Financial risk management
Financial instruments by category
The carrying value of the financial instruments of the Group at 31 December is shown below:
2021
Financial assets
at FVTPL
£m
Financial
assets held at
amortised cost
£m
Financial
liabilities
at FVTPL
£m
Other financial
liabilities
£m
Total financial
instruments
£m
Non–financial
instruments
£m
Total
£m
Goodwill – – – – – 570.6 570.6
Intangible assets – – – – – 52.1 52.1
Property, plant and equipment – – – – – 44.1 44.1
Deferred tax assets – – – – – 27.6 27.6
Non–current trade and other receivables
1
– 0.5 – – 0.5 – 0.5
Financial assets at FVTPL 303.5 – – – 303.5 – 303.5
Current trade and other receivables
1
- 135.4 – – 135.4 9.6 145.0
Cash and cash equivalents – 197.3 – – 197.3 – 197.3
Non–current loans and borrowings – – – (49.3) (49.3) – (49.3)
Non–current trade and other payables
1
– – – (89.0) (89.0) (13.3) (102.3)
Deferred tax liabilities – – – – – (10.3) (10.3)
Financial liabilities at FVTPL – – (52.3) – (52.3) – (52.3)
Current trade and other payables
1
– – – (203.4) (203.4) (18.8) (222.2)
Current income tax liability – – – – – (3.5) (3.5)
Total 303.5 333.2 (52.3) (341.7) 242.7 658.1 900.8
2020
Financial assets
at FVTPL
£m
Financial
assets held at
amortised cost
£m
Financial
liabilities
at FVTPL
£m
Other financial
liabilities
£m
Total financial
instruments
£m
Non–financial
instruments
£m
Total
£m
Goodwill – – – – – 570.6 570.6
Intangible assets – – – – – 70.8 70.8
Property, plant and equipment – – – – – 47.4 47.4
Deferred tax assets – – – – – 20.0 20.0
Non–current trade and other receivables
1
– 0.4 – – 0.4 0.1 0.5
Financial assets at FVTPL 261.1 – – – 261.1 – 261.1
Current trade and other receivables
1
– 175.9 – – 175.9 11.4 187.3
Cash and cash equivalents – 188.1 – – 188.1 – 188.1
Non–current loans and borrowings – – – (49.2) (49.2) – (49.2)
Non–current trade and other payables
1
– – – (80.1) (80.1) (7.3) (87.4)
Deferred tax liabilities – – – – – (12.5) (12.5)
Financial liabilities at FVTPL – – (89.4) – (89.4) – (89.4)
Current trade and other payables
1
– – – (195.6) (195.6) (17.2) (212.8)
Current income tax liability – – – – – (8.4) (8.4)
Total 261.1 364.4 (89.4) (324.9) 211.2 674.9 886.1
1. Prepayments, contract liabilities, deferred acquisition and commission costs and social security and other taxes do not meet the definition of financial instruments.
For financial instruments held at 31 December 2021, issued subordinated debt, recorded within non–current loans and borrowings above, had a fair value of
£58.8m (2020: £54.0m), less unamortised expenses of £0.3m (2020: £0.4m).
Gains and losses recognised in the income statement during the year ended 31 December 2021 by category are shown below:
2021 2020
Financial assets
at FVTPL
2
£m
Other income
and expense
£m
Total
£m
Financial assets
at FVTPL
2
£m
Other income
and expense
£m
Total
£m
Revenue – 617.8 617.8 – 500.5 500.5
Fee and commission expenses – (49.2) (49.2) – (42.7) (42.7)
Administrative expenses 2.7 (355.8) (353.1) 0.9 (313.0) (312.1)
Other (losses)/gains (4.4) – (4.4) 3.3 – 3.3
Amortisation of intangible assets – (20.6) (20.6) – (11.3) (11.3)
Finance costs – (6.8) (6.8) – (5.1) (5.1)
Income tax expense – (34.1) (34.1) – (27.3) (27.3)
(1.7) 151.3 149.6 4.2 101.1 105.3
2. See Notes 4 and 6 for further details.
154 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
The Group used the following hierarchy for determining and disclosing the fair value of financial instruments:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: other techniques, for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data
(unobservable inputs).
As at 31 December 2021, the Group held the following financial instruments measured at fair value:
2021
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
Financial assets at FVTPL – funds 194.6 52.4 – 247.0
Financial assets at FVTPL – fees receivable in shares 55.5 – – 55.5
Other financial assets at FVTPL – derivatives – 1.0 – 1.0
Financial liabilities at FVTPL (52.3) – – (52.3)
197.8 53.4 – 251.2
As at 31 December 2020, the Group held the following financial instruments measured at fair value:
2020
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
Financial assets at FVTPL – funds 183.2 74.2 – 257.4
Other financial assets at FVTPL – derivatives – 3.7 – 3.7
Financial liabilities at FVTPL (89.2) – – (89.2)
Other financial liabilities at FVTPL – derivatives – (0.2) – (0.2)
94.0 77.7 – 171.7
Where funds are consolidated, we look through to the underlying instruments and assign a level in accordance with the definitions above. Where funds
are not consolidated, we do not apply a look through and these funds are classified as level 1 as the prices of these funds are quoted in active markets.
Level 1 financial instruments
The fair value of financial instruments that are actively traded in organised financial markets is determined by reference to quoted market prices at the
balance sheet date.
Financial assets at FVTPL
Financial assets at FVTPL – funds relates to non-consolidated seed investments and hedges of awards in fund units in mutual funds. It also includes the
underlying holdings in consolidated funds that meet the definition of level 1 financial instruments.
Financial liabilities at FVTPL
These relate to non-controlling interests in funds that have been consolidated as subsidiaries.
Level 2 financial instruments
The fair value of financial instruments are valued based on observable market data from readily available external sources.
Financial assets at FVTPL
Financial assets at FVTPL – funds relates to underlying holdings in consolidated funds that meet the definition of level 2 financial instruments.
Derivative financial instruments
These are held to hedge specific seed-related exposures and have maturities designed to match the exposures they are hedging. In addition, in 2020, the
Group held a forward contract over 9 million of its own shares for the purpose of hedging pricing risk in respect of unfunded share option obligations to
employees. The derivatives are held at fair value, being the price to exit the instruments at the balance sheet date. Movements in the fair value are
recorded in the income statement.
The Group enters into swap arrangements and foreign exchange forward contracts to provide an economic hedge of certain of its seed investments.
Gains and losses arising from fair value movements in the swap and forward contracts are recognised in the consolidated income statement within other
gains/losses and are settled periodically, in accordance with the terms of the contract. Any cash settlements due from or to the counterparty in relation
to the swap arrangements, which are required to be settled at the end of each month, are recorded within current assets or current liabilities as trade
receivables or other payables, as appropriate. The fair value of the foreign exchange contracts, which are required to be settled at periods other than
month end, are recorded within financial assets or liabilities at FVTPL, as appropriate.
At 31 December 2021, the notional value of the swaps was £131.0m (2020: £118.1m) and the foreign exchange forward contracts was £106.7m (2020: £90.6m).
The settlement amount of the swaps at 31 December 2021 was a payable of £2.5m (2020: payable of £2.2m) which is included within trade and other
payables. The fair value of the foreign exchange forward contracts is included within financial assets at FVTPL (£1.0m (2020: £nil)) and financial liabilities at
FVTPL (£nil (2020: £0.2m)).
155Jupiter Fund Management plc | Annual Report & Accounts 2021
24. Financial risk management continued
Financial risk management objectives and policies
The Group is subject to a number of financial risks throughout its business, the principal risks being market risk (including price, foreign exchange and
interest rate risk), credit risk and liquidity risk. The Board is accountable for risk and is responsible for oversight of the risk management process. The Board
has ultimate responsibility for the risk strategy of the Group, and for determining an appropriate risk appetite and tolerance levels within which the Group
must operate. By defining these, the Board demonstrates that it is aware of and, where appropriate, has taken steps to mitigate the impact of risks that
may have a material impact on the Group.
The Executive Committee reviews the key corporate risks facing the Group. The Chief Executive Officer has ultimate responsibility for the governance of
the risk management of the firm, but delegates the risk and control framework to the Chief Risk Officer, who has responsibility for the monitoring and
reporting of risk and controls, and through the Risk and Finance Committee manages the ongoing development of the Group’s risk and control framework.
Jupiter embeds risk management within the business, with independent oversight and challenge being provided by the risk and compliance function.
Price risk
Price risk is the risk that a decline in the value of assets will adversely impact the profitability of the Group. Management has identified price risk as the
exposure to unfavourable movements in the value of financial assets held by the Group which would result in a loss recognised in the consolidated
income statement. In addition, due to the nature of the business, the Group’s exposure extends to the impacts on revenue that are determined on the
basis of a percentage of AUM, and are therefore impacted by the financial instrument risk exposure of our clients – the secondary exposure. This price risk
analysis deals only with our primary exposure of the risks from the Group’s direct holdings. The Group is not exposed to commodity price risk.
The Group holds listed equity investments in its seed investments portfolio which are exposed to the risk of changes in equity markets. At 31 December
2021, the fair value, and therefore maximum exposure to listed securities, was £142.3m (2020: £138.3m).
The Group’s policy is to hedge the equity market and currency exposure of its seed investments depending on the fund mandate and whether available
transactions are cost effective. As at 31 December 2020 and 31 December 2021, the Group held swap instruments to act as hedges against risk exposures
arising from certain holdings in seed fund investments.
Price risk sensitivity analysis on financial assets
The Directors believe that 10% gives a reasonable measure of the Group’s sensitivity to price risk. An increase or decrease of 10% in equity markets would
have the impact shown below on the Group’s profit before taxation. This reflects estimated gains and losses on the Group’s listed investments at the
balance sheet date and not any likely impact on the Group’s revenue or costs. There is no further impact on the Group’s equity.
Impact on the income statement of change in equity markets
2021
£m
2020
£m
+10% 1.1 4.5
-10% (1.1) (4.5)
The analysis takes account of the relevant derivative transactions the Group has entered into to hedge against such movements.
Foreign exchange risk
Foreign exchange risk is the risk that the Group will sustain losses through adverse movements in currency exchange rates. The Group predominantly
operates in the UK, with some transactions from overseas third parties in foreign currencies, which create exposure to non-Sterling income and expenses.
The Group’s policy is to hold the minimum amount of foreign currency required to cover operational needs and to convert foreign currency on receipt.
Direct exposures are limited to operational cash held in overseas subsidiaries, short-term outstanding foreign currency fee debtors and investments in
seed denominated in a foreign currency. The Group does not normally hedge these exposures, other than in the case of certain seed investments, which
are hedged using foreign exchange forward contracts. These contracts are measured at fair value at the balance sheet date. Foreign currency risk is
monitored closely and managed by the finance function.
Foreign exchange rate sensitivity analysis
The Directors believe that 10% gives a reasonable measure of the Group’s sensitivity to foreign exchange risk. The following table demonstrates the
sensitivity to a possible change in foreign exchange rates, with all other variables held constant, on the Group’s profit before tax. This reflects estimated
gains and losses on retranslating the Group’s foreign currency assets and liabilities at the balance sheet date and not any likely impact on the Group’s
revenue or costs. The exposure to foreign exchange risk arises principally through operational cash balances held in foreign currencies and seed
investments held in non-Sterling share classes. There is no further impact on the Group’s equity.
Impact on the income statement of change in exchange rates
2021 2020
+10%
£m
-10%
£m
+10%
£m
-10%
£m
Sterling against Euro (6.2) 7.6 (5.5) 6.7
Sterling against US Dollar (0.9) 1.1 (1.1) 1.3
Sterling against SG Dollar (0.2) 0.2 (0.2) 0.2
Sterling against Swiss Franc (0.2) 0.3 (0.2) 0.3
Sterling against HK Dollar (1.2) 1.4 (0.8) 1.0
The sensitivity analysis takes account of the relevant derivative transactions the Group has entered into to hedge against such exposures.
Notes to the Group Financial Statements
continued
156 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The Group’s exposure to interest rate risk relates primarily to the Group’s cash balances (Note 16). The Group manages interest rate risk via the finance
function monitoring of the interest rate cash flow risks and returns. The Group puts cash on deposit at fixed rates of interest for periods of up to three
months. The Group’s Tier 2 subordinated debt was issued at a fixed interest rate, and therefore has no interest rate risk exposure.
Interest rate sensitivity analysis
The Directors believe that a movement in interest rates of 50bps gives a reasonable measure of the Group’s sensitivity to interest rate risk. The following
table demonstrates the sensitivity to a possible change in interest rates, with all other variables held constant and using a floor of 0bps, on the Group’s
profit before tax (mainly through the impact on floating rate cash deposits). There is no further impact on the Group’s equity.
Impact on the income statement of change in interest rates
2021
£m
2020
£m
+50 bps 1.0 0.9
-50 bps (0.2) (0.3)
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract leading to a financial loss in the
Group’s operating activities.
The Group is exposed to credit risk primarily from its treasury activities, including deposits with banks and financial institutions, but also from its trade
receivables and, in certain circumstances, financial assets at fair value through profit or loss. Trade receivables are monitored regularly. Historically, default
levels have been insignificant. Financial assets at FVTPL expose the Group to credit risk where seed investments in funds are consolidated and those funds
hold investments in debt instruments or derivative positions with a positive fair value.
The Group’s maximum exposure to credit risk is £354.0m (2020: £400.3m), represented by the carrying value of its non-equity financial assets at FVTPL
(£47.4m (2020: £58.9m)), performance fee receivables included in financial assets at FVTPL (£55.5m (2020: £nil)), trade receivables (£53.8m (2020: £153.3m)) and
cash and cash equivalents (£197.3m (2020: £188.1m)).
The fair values of the Group’s financial liabilities at FVTPL are not affected by changes in the Group’s credit risk. There is no difference between the
carrying amount of financial liabilities at FVTPL and the amount the Group would be contractually required to pay at maturity.
With regard to credit risk related to financial instruments, the Group’s policy is to place deposits only with financial institutions which satisfy minimum
counterparty ratings and other criteria. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each
counterparty. The limits are set to minimise the concentration of risks and thereby mitigate the possibility of financial loss through counterparty failure.
The Group monitors any decrease in the creditworthiness of its counterparties.
The table below contains an ageing analysis of current and overdue trade receivables:
2021
£m
2020
£m
Neither past due nor impaired 53.7 152.9
Days past due:
< 30 – –
30-60 0.1 0.2
61-90 – –
> 90 – 0.2
53.8 153.3
None of the receivables past due were considered to be impaired (2020: £nil).
The table below contains an analysis of financial assets held by the Group for which credit ratings are available:
2021 2020
Financial assets
at FVTPL
£m
Trade
receivables
£m
Cash and cash
equivalents
£m
Total
£m
Financial assets
at FVTPL
£m
Trade
receivables
£m
Cash and cash
equivalents
£m
Total
£m
AAA 0.1 – – 0.1 – – – –
AA 0.7 – – 0.7 3.7 – 85.6 89.3
A – 3.5 75.0 78.5 0.3 3.9 102.5 106.7
BBB 4.9 – 122.3 127.2 10.1 – – 10.1
BB 13.8 – – 13.8 19.5 – – 19.5
B 20.1 – – 20.1 16.0 – – 16.0
CCC 7.7 – – 7.7 8.9 – – 8.9
CC – – – – 0.2 – – 0.2
C 0.1 – – 0.1 0.2 – – 0.2
Not rated 256.1 50.3 – 306.4 202.2 149.4 – 351.6
Total 303.5 53.8 197.3 554.6 261.1 153.3 188.1 602.5
157Jupiter Fund Management plc | Annual Report & Accounts 2021
Financial assets at FVTPL which are not rated comprise equity investments.
Trade and other receivables which are not rated comprise cancellations of units in unit trusts and sales of units in unit trusts, title to which is not
transferred until settlement is received.
Liquidity risk
Liquidity risk is the risk that the Group may be unable to meet its payment obligations as they fall due or only at a significantly higher cost. The Group
produces cash flow forecasts to assist in the efficient management of the collection and payment of liquid assets and liabilities.
The Group’s objectives in respect of liquidity are:
• to ensure that both the Group as a whole and individual entities within the Group have access to sufficient liquid funds to trade solvently and meet
trading liabilities as they fall due;
• to allow the Group to maintain a flexible dividend policy, taking reference to prior year and prospective profitability, capital requirements and cash
flow; and
• to provide the Group with appropriate flexibility over the transferability of its capital and cash balances.
Surplus cash held by the operating entities over and above the balances required for working capital management is held in interest-bearing accounts.
Regulated companies ensure that sufficient capital is maintained to meet regulatory requirements.
The Group has access to an RCF of £80.0m (2020: £80.0m) which was unutilised at 31 December 2021 (2020: same). The facility expires in 2023.
The table below summarises the maturity profile of the Group’s financial liabilities at 31 December 2020 and 31 December 2021 based on contractual
undiscounted payments:
Financial liabilities
2021 2020 (restated)
2
Within 1 year
or repayable
on demand
£m
1-5 years
£m
> 5 years
£m
Total
£m
Within 1 year
or repayable
on demand
£m
1-5 years
£m
> 5 years
£m
Total
£m
Loans and borrowings¹ 4.4 63.3 – 67.7 4.4 67.7 – 72.1
Lease liabilities 5.7 19.3 36.6 61.6 5.6 19.8 41.2 66.6
Trade and other payables 196.4 41.9 – 238.3 188.7 29.7 – 218.4
Financial liabilities at FVTPL 52.3 – – 52.3 89.4 – – 89.4
Total 258.8 124.5 36.6 419.9 288.1 117.2 41.2 446.5
1. Includes contractual payments of interest.
2. Comparative data relating to 2020 has been restated to show the undiscounted values of contractual payments. The discounted values had previously been disclosed in the 2020 Annual
Report and Accounts.
Capital management
The Group’s objectives when managing its capital and funding structure are to safeguard the Group’s ability to continue as a going concern, maintain
appropriate financial resources, maximise shareholder value, maintain an optimal capital structure to reduce the cost of capital and to meet working capital
requirements.
2021
£m
2020
£m
Cash and short-term deposits 197.3 188.1
Loans and borrowings (49.3) (49.2)
Net cash and cash equivalents 148.0 138.9
Equity¹ 260.8 261.0
Retained earnings, foreign currency translation reserve and non-controlling interests 640.0 625.1
Equity attributable to shareholders 900.8 886.1
1. Share capital, own share reserve and other reserves.
Regulatory capital requirements
The Group considers its share capital, reserves and subordinated debt, which was issued in 2020 and which qualifies as lower Tier 2 capital, to constitute its
total capital. The subsidiaries within the Group which are regulated are required to maintain capital resources to comply with the regulatory capital
requirements of the FCA and certain overseas financial regulators. Headroom over regulatory capital is discussed by the Risk and Finance Committee.
In addition to the capital held to meet regulatory capital requirements, the Group maintains sufficient cash resources to meet its liabilities as and when
they fall due, based on regularly produced cash forecasts, modelling both normal and stressed conditions. Liquidity risk is mitigated by the availability of
the RCF and the high level of cash in the business.
25. Interests in structured entities
IFRS 12 requires certain disclosures in respect of interests in subsidiaries, joint arrangements, associates and unconsolidated structured entities.
A structured entity is defined as an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the
entity, such as when any voting rights relate to administrative tasks only, or when the relevant activities are directed by means of contractual
arrangements. The Group has assessed whether the funds it manages are structured entities and concluded that mutual funds and investment trusts
managed by the Group are structured entities unless substantive removal or liquidation rights exist.
The Group has interests in these funds through the receipt of management and other fees and, in certain funds, through ownership of fund units or shares.
The Group’s investments in these funds are subject to the terms and conditions of the respective fund’s offering documentation and are susceptible to
market price risk. The investments are included in financial assets at fair value through profit or loss in the balance sheet.
Notes to the Group Financial Statements
continued
158 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
Where the Group has no equity holding in a fund it manages, the investment risk is borne by the external investors and therefore the Group’s maximum
exposure to loss relates to future management fees and any uncollected fees at the balance sheet date. Where the Group does have an equity holding,
the maximum exposure to loss constitutes the future and uncollected management fees plus the fair value of the Group’s investment in that fund.
The Group does not sponsor any of the structured entities and there are no guarantees or commitments.
Direct holdings in unconsolidated structured entities
Direct investments in unconsolidated structured entities comprise seed investments and hedges of awards in fund units or shares in mutual funds and
investment trusts, details of which are given below:
Number
of funds
Net AUM
of funds
£bn
Financial
assets
at FVTPL
£m
Investment
management/
performance
fees in the year
£m
Management/
performance
fees receivable
£m
As at 31 December 2021 78 44.1 247.0 502.7 134.0
As at 31 December 2020 72 42.5 257.4 383.4 93.3
Subsidiaries and associates
Information about seed investments judged to be subsidiaries and associates at 31 December 2021 is given below:
Name Category
Country of
incorporation
Principal
activities
Financial assets
at FVTPL
£m
Investment
in associates
£m
Percentage
of total
AUM held
Share class held
by the Group
Date of the end
of the fund’s
reporting period
Jupiter European Smaller Companies Subsidiary England & Wales Unit Trust 30.3 – 30% I Acc GBP 31-Aug
Jupiter Global Fund SICAV: Europe
ex-UK Equity
Subsidiary Luxembourg SICAV
sub-fund
22.0 – 66% L EUR Acc and
I GBP Acc
30-Sep
Jupiter Global Fund SICAV: Flexible
Income
Subsidiary Luxembourg SICAV
sub-fund
64.6 – 81% I EUR Acc
L EUR Acc
I EUR Q Inc
L USD M Inc HSC
N USD Acc HSC
A USD Acc HSC
C USD Acc HSC
L AUD M Inc IRD
L SGD M Inc IRD HSC
L M Inc USD IRD
D Q Inc USD IRD HSC
D USD Acc HSC
L USD Acc HSC
D EUR Q Inc and
I GBP Acc HSC
30-Sep
Jupiter Global Fund SICAV: Flexible
Macro
Subsidiary Luxembourg SICAV
sub-fund
12.2 – 83% F EUR Acc
D EUR Q Inc Dis
L EUR Acc
I EUR Acc
D EUR Acc
D GBP Acc HSC and
D USD Acc HSC
30-Sep
Jupiter Global Fund SICAV: Global
High Yield Short Duration Bond
Subsidiary Luxembourg SICAV
sub-fund
19.1 – 77% F EUR Acc
D EUR Q Inc Dis
L EUR Acc
I EUR Acc
D EUR Acc
D HSC Acc USD and
I GBP Acc HSC
30-Sep
Jupiter Global Fund SICAV: Global
Sustainable Equities
Subsidiary Luxembourg SICAV
sub-fund
11.1 – 86% A USD Acc
D USD Acc
G USD Acc
I USD Acc
L USD Acc
N USD Acc
T USD Acc
D EUR Acc
D EUR A Inc
G EUR Acc
I EUR Acc
L EUR Acc and
L EUR A Inc
30-Sep
Jupiter Merlin Real Return Subsidiary England & Wales Unit Trust 7.2 – 76% I Class Acc 31-May
159Jupiter Fund Management plc | Annual Report & Accounts 2021
25. Interests in structured entities continued
Related undertakings other than subsidiaries and associates
Entities in which the Group holds more than 20% of the shares in any single share class, but over which the Group neither has control nor significant
influence, are summarised below:
Name
Share class held by the
Group Country of incorporation
Principal
activities
Financial
assets at
FVTPL £m
Percentage of
share class held
by the Group
Percentage of
total shares
held
Date of the end
of the fund’s
reporting period
Jupiter Asset Management Series Plc: Europe (ex UK)
Smaller Companies Fund
U2 GBP Acc Ireland ICVC
sub-fund
0.1 100% 0% 31-Dec
Jupiter Asset Management Series Plc: Gold & Silver
Fund
N USD Acc Ireland ICVC
sub-fund
– 100% 0% 31-Dec
Jupiter Asset Management Series Plc: Jupiter Emerging
Market Debt Income Fund
U2 GBP Acc Ireland ICVC
sub-fund
– 100% 0% 31-Dec
Jupiter Asset Management Series Plc: Merian Global
Dynamic Bond
L EUR Acc Ireland ICVC
sub-fund
– 100% 0% 31-Dec
Jupiter Asset Management Series Plc: North American
Equity Fund (IRL)
U2 GBP Acc Ireland ICVC
sub-fund
0.6 90% 0% 31-Dec
Jupiter Asset Management Series Plc: Strategic
Absolute Return Bond
L SEK Acc HSC Ireland ICVC
sub-fund
– 82% 0% 31-Dec
Jupiter Asset Management Series Plc: UK Specialist
Equity Fund
X GBP Acc Ireland ICVC
sub-fund
3.2 46% 0% 31-Dec
Jupiter Global Fund SICAV: Asia Pacific Income A USD Acc Luxembourg SICAV
sub-fund
– 100% 13% 30-Sep
Jupiter Global Fund SICAV: Asia Pacific Income C USD Acc Luxembourg SICAV
sub-fund
0.1 100% 13% 30-Sep
Jupiter Global Fund SICAV: Asia Pacific Income L EUR Q Inc Luxembourg SICAV
sub-fund
0.3 88% 13% 30-Sep
Jupiter Global Fund SICAV: Asia Pacific Income L SGD Q Inc
Dist HSC
Luxembourg SICAV
sub-fund
0.7 100% 13% 30-Sep
Jupiter Global Fund SICAV: Asia Pacific Income N USD Acc Luxembourg SICAV
sub-fund
– 100% 13% 30-Sep
Jupiter Global Fund SICAV: Dynamic Bond L JPY Hsc Acc Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: Dynamic Bond N USD Acc Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: European Growth C USD HSC Acc Luxembourg SICAV
sub-fund
0.1 78% 0% 30-Sep
Jupiter Global Fund SICAV: European Growth E USD Acc Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: European Growth FIA IE Brazil SICAV
sub-fund
1.2 36% 0% 30-Sep
Jupiter Global Fund SICAV: European Growth L HKD HSC Acc Luxembourg SICAV
sub-fund
0.1 68% 0% 30-Sep
Jupiter Global Fund SICAV: European Growth N USD Acc Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: European Growth USD FC FIA IE Brazil SICAV
sub-fund
1.2 69% 0% 30-Sep
Jupiter Global Fund SICAV: Financial Innovation A USD Acc HSC Luxembourg SICAV
sub-fund
0.1 100% 0% 30-Sep
Jupiter Global Fund SICAV: Financial Innovation D USD Acc HSC Luxembourg SICAV
sub-fund
0.1 100% 0% 30-Sep
Jupiter Global Fund SICAV: Financial Innovation N USD Acc Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: Financial Innovation N USD Acc HSC Luxembourg SICAV
sub-fund
0.1 100% 0% 30-Sep
Jupiter Global Fund SICAV: Global Convertibles A USD Acc HSC Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: Global Convertibles C USD Acc HSC Luxembourg SICAV
sub-fund
0.1 100% 0% 30-Sep
Jupiter Global Fund SICAV: Global Convertibles N USD Acc HSC Luxembourg SICAV
sub-fund
– 70% 0% 30-Sep
Jupiter Global Fund SICAV: Global Ecology Growth D EUR Acc Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: Global Emerging Markets
Corporate Bond
A USD Q INC Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Notes to the Group Financial Statements
continued
160 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
Related undertakings other than subsidiaries and associates continued
Name
Share class held by the
Group Country of incorporation
Principal
activities
Financial
assets at
FVTPL £m
Percentage of
share class held
by the Group
Percentage of
total shares
held
Date of the end
of the fund’s
reporting period
Jupiter Global Fund SICAV: Global Emerging Markets
Corporate Bond
D GBP A INC
HSC
Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: Global Emerging Markets
Corporate Bond
I CHF Acc HSC Luxembourg SICAV
sub-fund
0.1 100% 0% 30-Sep
Jupiter Global Fund SICAV: Global Emerging Markets
Corporate Bond
L EUR Acc HSC Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: Global Emerging Markets
Short Duration Bond
C USD Acc Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: Global Emerging Markets
Short Duration Bond
I USD A Inc Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: Global Equity Growth
Unconstrained
D EUR Hedged
Acc HSC
Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: Global Equity Growth
Unconstrained
G EUR Acc Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: Global Equity Growth
Unconstrained
N USD Acc Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: Japan Select A USD Acc Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: Jupiter Global Sovereign
Opportunities
A USD Acc Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: Jupiter Global Sovereign
Opportunities
D EUR Acc HSC Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: Jupiter Global Sovereign
Opportunities
D USD Acc Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: Jupiter Global Sovereign
Opportunities
I EUR Acc HSC Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: Jupiter Global Sovereign
Opportunities
I GBP Acc HSC Luxembourg SICAV
sub-fund
0.1 51% 0% 30-Sep
Jupiter Global Fund SICAV: Jupiter Global Sovereign
Opportunities
L USD Acc Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: Jupiter Global Sovereign
Opportunities
N USD Acc Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: Pan European Smaller
Companies
A USD Acc HSC Luxembourg SICAV
sub-fund
– 55% 0% 30-Sep
Jupiter Global Fund SICAV: Pan European Smaller
Companies
C USD Acc HSC Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: Pan European Smaller
Companies
D GBP Acc HSC Luxembourg SICAV
sub-fund
0.1 81% 0% 30-Sep
Jupiter Global Fund SICAV: Pan European Smaller
Companies
L USD Acc HSC Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Fund SICAV: Pan European Smaller
Companies
N USD Acc HSC Luxembourg SICAV
sub-fund
– 100% 0% 30-Sep
Jupiter Global Sustainable Equities T Inc England & Wales Unit Trust 9.1 93% 4% 30-Apr
Jupiter Investment Funds Series II: Global Strategic
Bond Fund
U2 GBP Inc England & Wales OEIC
sub-fund
– 100% 0% 31-Oct
Jupiter Investment Management Series I: Monthly
Income Bond Fund
U2 GBP Inc England & Wales OEIC
sub-fund
– 99% 0% 31-Jul
Jupiter Investment Management Series I: UK Equity
Income Fund
U2 GBP Acc England & Wales OEIC
sub-fund
0.1 67% 0% 31-Jul
MGI Arbea Fund Limited GBP Man Cayman Islands Hedge Fund 1.8 22% 9% 31-Dec
The registered offices of the Group’s subsidiaries, associates, and unconsolidated structured entities are detailed in Note 30.
161Jupiter Fund Management plc | Annual Report & Accounts 2021
26. Related parties
The Group manages a number of investment trusts, unit trusts, OEICs, SICAVs, ICVCs, an ICAV (closed in 2021), a hedge fund and a Delaware LP and
receives management and, in some instances, performance fees for providing this service. The precise fee arrangements are disclosed within the financial
statements of each investment management subsidiary of the Group or within other publicly available information. By virtue of the investment
management agreements in place between the Group and the collective investment vehicles it manages, such funds may be considered to be related
parties. Investment management and performance fees are disclosed in Note 1.
The Group acts as manager for 38 (2020: 38) authorised unit trusts and 12 (2020: 12) OEICs. Each unit trust is jointly administered with the trustees, Northern
Trust Global Services SE. The aggregate total value of transactions for the year was £1,912m (2020: £2,360m) for unit trust creations and £3,692m (2020:
£5,295m) for unit trust redemptions. The actual aggregate amount due from (2020: to) the trustees at the end of the accounting year in respect of
transactions awaiting settlement was £2.6m (2020: £1.5m). The Group also acts as the management company for the Jupiter Global Fund and Jupiter Merlin
Fund SICAVs, made up of 19 sub-funds (2020: 18) and four sub-funds (2020: four) respectively as well as the Jupiter Investment Management Series II
(previously known as the Merian Investment Fund Series II), the Jupiter Asset Management Series plc (previously known as the Merian Global Investors
Series plc) and the Jupiter Investment Funds Series II (previously known as the Merian Global Investors Series II), made up of 12 (2020: 12), 21 (2020: 21) and nil
(2020: one) sub-funds respectively.
The amounts received in respect of gross management, registration and performance fee charges were £283.6m (2020: £274.9m) for unit trusts, £87.0m
(2020: £42.0m) for OEICs, £122.8m (2020: £110.5m) for SICAVs, £48.2m (2020: £56.7m) for ICVCs, £nil (2020: £0.3m) for the ICAV, £119.5m (2020: £38.3m) for
investment trusts and £25.9m (2020: £25.0m) for segregated mandates. At the end of the year, there was £31.2m (2020: £32.9m) accrued for annual
management fees, £3.2m (2020: £3.1m) in respect of registration fees and £113.0m (2020: £72.9m) in respect of performance fees.
Included within financial instruments (see Note 14) are seed investments and hedges of awards in fund units in mutual funds and investment trusts
managed by the Group. At 31 December 2021, the Group had a total net investment in such funds of £202.7m (2020: £168.2m) and received distributions of
£1.1m (2020: £0.8m). During 2021, it invested £70.8m (2020: £46.7m) in these funds and made disposals of £69.4m (2020: £51.1m).
Three members of key management personnel (2020: three) have invested in the Group’s subordinated debt issued in 2020 in the sum of £1.6m (2020:
£1.6m). These were made on terms equivalent to those that prevail in arm’s length transactions.
Key management compensation
Transactions with key management personnel also constitute related party transactions. Key management personnel are defined as the Directors, together
with other members of the Executive Committee. The aggregate compensation paid or payable to key management for employee services is shown
below:
2021
£m
2020
£m
Short-term employee benefits 5.5 5.6
Share-based payments 6.9 5.4
Post-employment benefits – 0.4
Other long-term employee benefits 0.4 0.4
12.8 11.8
Notes to the Group Financial Statements
continued
162 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
27. Basis of preparation and other accounting policies
Basis of preparation
The consolidated financial statements have been prepared in accordance with UK-adopted International Financial Reporting Standards (IFRS) and with the
requirements of the Companies Act 2006 as applicable to companies reporting under those standards.
The financial statements have been prepared on a going concern basis using the historical cost convention modified by the revaluation of certain financial
assets and financial liabilities (including derivatives) that have been measured at fair value. After reviewing the Group’s current plans and forecasts and
financing arrangements, as well as the current trading activities of the Group, the Directors consider that the Group has adequate resources to continue
operating for a period of at least 12 months from the date of signing.
In preparing the financial statements, we have considered the impact of climate change, particularly in the context of the disclosures included on ESG and
stewardship this year on pages 40 to 56. There has not been a material impact on the financial reporting judgements and estimates arising from our
considerations. We have specifically considered the impact of climate change in our goodwill assessment (see Note 10).
Basis of accounting
The consolidated financial statements for the year ended 31 December 2021 include the consolidated financial information of the Company and its
subsidiaries. The accounting policies set out those policies that have been applied consistently in preparing the Group financial statements. No Standards
or Interpretations have been issued that have had or are expected to have an impact on the Group’s financial statements. The preparation of financial
statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the
process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the consolidated financial statements, are disclosed later in this note within the section Critical accounting estimates,
judgements and assumptions.
Business combinations
The Group applies the acquisition method to account for business combinations. The consideration for the acquisition of a subsidiary is the fair values of
the assets transferred, the liabilities incurred to the former owners of the acquiree and any equity interests issued by the Group. The consideration
includes the fair value of any asset or liability resulting from contingent or deferred consideration arrangements.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the
acquisition date.
Basis of consolidation
Subsidiaries
Subsidiaries are those entities over which the Group has control. The Group controls an entity if it is judged to have all of the following:
• power over the investee;
• exposure, or rights, to variable returns from its involvement with the investee; and
• the ability to use its power over the investee to affect its returns.
The Group’s subsidiaries comprise operating and holding companies, and those funds where the Group acts as fund manager which are consolidated as a
result of additional exposure to the variable returns of the funds through seed investment. Where we own 100% of an operating or holding company, our
judgement is that the above elements of control are immediately satisfied and that the companies are therefore subsidiaries of the Group.
Seed investments are accounted for as subsidiaries, associates or other financial investments depending on the holdings of the Group and on the level of
influence and control that the Group is judged to have.
Significant area of judgement
In determining the level of control for seed investments, additional judgement is required. The Group considers all relevant facts and circumstances in
assessing whether it has power over an investee, including the purpose and design of an investee, relevant activities, substantive and protective rights,
and voting rights and potential voting rights. Exposure to variable returns is usually determined by the earning of management fees, and the percentage
investment in the funds’ net assets. Where the value of the Group’s holding exceeds 50% of the total value of the fund, the Group deems control to
automatically exist. Where ownership is under 50%, the Group applies a rebuttable presumption that interests amounting to 30% or more are
consolidated, subject to review of the facts and circumstances of each individual investment relevant to establishing whether the Group is acting as
principal or agent to the fund. These include the potential for large performance fees to be earned, an assessment of kick-out rights and the existence of
any other large investors in the fund. Kick-out rights rarely vary between the different types of funds that the Group manages; the percentage
investment in a fund is therefore the primary means for determining whether control exists for the Group, and the determination of the threshold to be
used as the rebuttable presumption is a key area of judgement for the Group. This judgement determines the extent to which the Group’s balance sheet
is grossed up to reflect additional financial instruments under the Group’s control and, as the value of such instruments is material to the Group, this
has been included as a significant area of judgement as set out below.
163Jupiter Fund Management plc | Annual Report & Accounts 2021
27. Basis of preparation and other accounting policies continued
The Group has seed investments in both its unit trusts and its SICAV sub-funds. The Group’s judgement is that control can exist in a sub-fund, even if it
does not exist in the whole of the umbrella fund, as the sub-funds have no cross-liability risk to other sub-funds or to the SICAV umbrella fund and thus
should be accounted for as separate entities.
The Group reassesses whether or not it controls an entity if facts or circumstances indicate that there are changes to one or more of the three elements
of control.
A list of subsidiaries, split into operating and holding companies and consolidated funds, is provided in Note 30. Consistent accounting policies are applied
across all Group companies. Intra-group transactions, balances, income and expenses are eliminated on consolidation. The transactions and balances of
subsidiaries are consolidated in these financial statements from the date that control commences until the date that control ceases. Where external
investors hold shares in funds controlled by the Group, the portion of profit or loss and net assets held by these non-controlling interests is included
within other gains/losses in the consolidated income statement and as liabilities at fair value through profit or loss in the consolidated balance sheet
respectively.
Foreign currency
(i) Functional and presentational currency
Items included in the financial information of each of the Group’s entities are measured using the currency of the primary economic environment in which
the entity operates (the functional currency). The consolidated financial statements are presented in Sterling, which is both the Company’s functional and
presentational currency as well as the currency in which the majority of the Group’s revenue streams, assets and liabilities are denominated.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the consolidated income statement within administrative expenses.
Translation differences on non-monetary financial assets and liabilities, such as equities held at fair value through profit or loss, are recognised
in the consolidated income statement as part of other gains/losses.
(iii) Group companies
The assets and liabilities of Group entities that have a functional currency different from the presentational currency are translated at the closing rate at
the balance sheet date, with income and expenses translated at average monthly exchange rates. Resulting exchange differences are recognised as a
separate component of other comprehensive income and are recycled to the income statement on disposal or liquidation of the relevant branch or
subsidiary.
New standards and interpretations not applied
The International Accounting Standards Board and IFRS Interpretations Committee (IFRS IC) have issued a number of new accounting standards,
interpretations, and amendments to existing standards and interpretations. There are no IFRSs or IFRS IC interpretations that are not yet effective that
would be expected to have a material impact on the Group.
Critical accounting estimates, judgements and assumptions
The preparation of the financial information requires management to make judgements, estimates and assumptions that affect the reported amount of
revenues, expenses, assets and liabilities and the disclosure of contingent liabilities. If such estimates and assumptions, which are based on management’s
best judgement at the date of preparation of the financial information, deviate from actual circumstances, the original estimates and assumptions are
modified as appropriate in the period in which the circumstances change.
There are no instances in these financial statements where there is a reasonable level of risk that the use of estimates could lead to a material change
within the next financial year. However, there are areas of the financial statements where the use of estimation is important, but where the risk of material
adjustment is not significant, being:
Note
4 Staff costs;
5 Share-based payments;
10 Goodwill; and
12 Calculation of lease assets and liabilities.
The areas where judgements are significant to the Group financial statements are discussed in the following notes:
10 Goodwill;
12 Calculation of lease assets and liabilities; and
24 Consolidation of seed investments.
164 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
COMPANY BALANCE SHEET
at 31 December 2021
Notes
2021
£m
2020
(restated)
1
£m
Non-current assets
Investment in subsidiary undertakings 29 541.1 515.6
541.1 515.6
Current assets
Financial assets at FVTPL 31 13.3 3.7
Trade and other receivables 32 104.4 105.8
Cash and cash equivalents 33 1.0 0.5
118.7 110.0
Total assets 659.8 625.6
Equity capital and reserves
Share capital 19 11.1 11.1
Own share reserve 20 (0.4) (0.2)
Other reserves
1
20 250.1 250.1
Retained earnings at 1 January 254.7 268.0
Profit for the year 73.6 61.4
Other movements (132.5) (74.7)
Retained earnings 195.8 254.7
Total equity 456.6 515.7
Non-current liabilities
Loans and borrowings 17 49.3 49.2
49.3 49.2
Current liabilities
Trade and other payables 35 153.8 60.7
Current income tax liability 0.1 –
153.9 60.7
Total liabilities 203.2 109.9
Total equity and liabilities 659.8 625.6
1. The split of the Company’s total equity between different non-distributable reserves has been restated. See Notes 19 and 20.
The financial statements of Jupiter Fund Management plc (registered number 6150195) on pages 165 to 171 were approved by the Board of Directors and
authorised for issue on 24 February 2022. They were signed on its behalf by
Wayne Mepham, Chief Financial Officer
165Jupiter Fund Management plc | Annual Report & Accounts 2021
COMPANY STATEMENT OF CASH FLOWS
for the year ended 31 December 2021
Notes
2021
£m
2020
£m
Cash flows from operating activities
Cash generated from operations 34 173.1 30.6
Net cash inflows from operating activities 173.1 30.6
Cash flows from investing activities
Purchase of financial assets at FVTPL (14.0) –
Proceeds from sale of financial assets at FVTPL 2.8 –
Proceeds from net asset adjustment on acquisition 1.8 6.7
Net cash (outflows)/inflows from investing activities (9.4) 6.7
Cash flows from financing activities
Proceeds from debt issued – 49.0
Purchase of shares by EBT (48.5) (10.7)
Finance costs paid (4.9) (0.3)
Dividends paid 21 (109.8) (83.9)
Net cash outflows from financing activities (163.2) (45.9)
Net increase/(decrease) in cash and cash equivalents 0.5 (8.6)
Cash and cash equivalents at beginning of year 0.5 9.1
Cash and cash equivalents at end of year 33 1.0 0.5
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2021
Share capital
£m
Own share
reserve
£m
Other reserves
(restated)
1
£m
Retained
earnings
£m
Total
£m
At 1 January 2020 9.2 (0.3) 8.0 268.0 284.9
Profit for the year – – – 61.4 61.4
Total comprehensive income – – – 61.4 61.4
Issuance of ordinary shares as consideration for a business combination, net
of transactions costs and tax (restated)
1
1.9 – 242.1 – 244.0
Vesting of ordinary shares and options – 0.2 – – 0.2
Dividends paid – – – (83.9) (83.9)
Share-based payments – – – 19.8 19.8
Purchase of shares by EBT – (0.1) – (10.6) (10.7)
Total transactions with owners 1.9 0.1 242.1 (74.7) 169.4
At 31 December 2020 11.1 (0.2) 250.1 254.7 515.7
Profit for the year – – – 73.6 73.6
Total comprehensive income – – – 73.6 73.6
Vesting of ordinary shares and options – 0.1 – – 0.1
Dividends paid – – – (109.8) (109.8)
Share-based payments – – – 25.5 25.5
Purchase of shares by EBT – (0.3) – (48.2) (48.5)
Total transactions with owners – (0.2) – (132.5) (132.7)
At 31 December 2021 11.1 (0.4) 250.1 195.8 456.6
Notes 19 20 20
1. The split of the Company’s total equity between different non-distributable reserves has been restated in the line ‘Issuance of ordinary shares as consideration for a business
combination, net of transaction costs and tax’ for 2020. See Notes 19 and 20.
166 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
NOTES TO THE COMPANY
FINANCIAL STATEMENTS
28. Accounting policies
Basis of preparation
The separate financial statements of the Company have been prepared in accordance with UK-adopted international financial reporting standards (IFRS)
and with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The principal accounting policies
adopted are the same as those set out in the Group’s financial statements.
The financial statements have been prepared on the historical cost basis, except for the revaluation of certain financial assets that have been measured at
fair value. The Company has taken advantage of the exemption in section 408 of the Act not to present its own income statement. The Company’s profit
for the year was £73.6m (2020: £61.4m).
Investments in subsidiary undertakings
Investments in subsidiary undertakings are held at cost less provision for impairment.
Share-based payments
The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings in the Group is treated as a capital
contribution. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an
increase to the investment in subsidiary undertakings, with a corresponding credit to equity in the Company financial statements.
29. Investment in subsidiary undertakings
2021
£m
2020
£m
At 1 January 515.6 260.0
Acquisition of subsidiary – 235.8
Share-based payments 25.5 19.8
At 31 December 541.1 515.6
On 1 July 2020, the Company acquired 100% of the share issued capital of Merian Global Investors Limited (Merian), an investment management company
registered in Jersey.
During 2020 and 2021, a number of subsidiary companies granted options to their employees over the shares of Jupiter Fund Management plc. For
accounting purposes, these grants are recorded as investments by the Company in its subsidiary undertakings.
30. Related undertakings
The following information relates to the Company’s operating subsidiaries. At 31 December 2020 and 2021 (unless otherwise indicated), with the exception
of Jupiter Fund Management Group Limited and Merian Global Investors Limited, these were all indirectly held, although the Company has some
direct investments in operating subsidiaries for accounting purposes as a result of share-based payment awards (see Note 29). All subsidiaries have the
same reporting dates and period of reporting as the parent Company. The parent held directly or indirectly all of the issued ordinary shares and controlled
all of the voting rights in all of the subsidiaries, unless otherwise indicated. All subsidiaries have been consolidated in the Group financial statements and
operate and are incorporated in the countries in which they are registered.
Name Registered office Principal activities
Jupiter Asset Management (Asia Pacific) Limited
1
6th Floor, Alexandra House,
18 Chater Road, Central, Hong Kong
Investment management
Jupiter Asset Management (Asia) Private Limited 50 Raffles Place, #27-01 Singapore Land Tower,
Singapore
Investment management
Jupiter Asset Management (Canada) Limited 45 O’Connor Street, Ottawa, Canada Dormant
Jupiter Asset Management (Europe) Limited
2
53 Merrion Square, South Dublin, Ireland ICVC management
Jupiter Asset Management Group Limited 70 Victoria Street, London, UK Investment holding company
Jupiter Asset Management (Hong Kong) Limited 6th Floor, Alexandra House,
18 Chater Road, Central, Hong Kong
Investment management
Jupiter Asset Management International S.A 5 Rue Heienhaff, Senningerberg,
L-1736, Luxembourg
SICAV management
Jupiter Asset Management Limited 70 Victoria Street, London, UK Investment management
Jupiter Asset Management (N America) Inc 1209 Orange Street, Wilmington, Delaware, USA Investment holding company
Jupiter Asset Management (Switzerland) AG 16 Löwenstrasse, Zurich, Switzerland Investment management
Jupiter Asset Management US LLC 1675 South State Street, #B, Dover, Delaware, USA Investment management
Jupiter Fund Management Group Limited 70 Victoria Street, London, UK Investment holding company
Jupiter Fund Managers Limited
3
70 Victoria Street, London, UK OEIC management
Jupiter Investment Management Group Limited 70 Victoria Street, London, UK Investment holding company
Jupiter Investment Management Holdings LLC 1675 South State Street, #B, Dover, Delaware, USA Investment holding company
167Jupiter Fund Management plc | Annual Report & Accounts 2021
30. Related undertakings continued
Name Registered office Principal activities
Jupiter Investment Management Limited
4
70 Victoria Street, London, UK Investment management
Jupiter Investment Trust Limited 70 Victoria Street, London, UK Dormant
Jupiter Management GP LLC 1675 South State Street, #B, Dover, Delaware, USA Investment management
Jupiter Unit Trust Managers Limited 70 Victoria Street, London, UK Unit trust management
Knightsbridge Asset Management Limited 70 Victoria Street, London, UK Investment holding company
Merian Global Investors (Finance) Limited 47 Esplanade, St Helier, Jersey, Channel Islands Investment holding company
Merian Global Investors Holdings Limited 70 Victoria Street, London, UK Investment holding company
Merian Global Investors (Jersey) Limited 47 Esplanade, St Helier, Jersey, Channel Islands Investment holding company
Merian Global Investors Limited 47 Esplanade, St Helier, Jersey, Channel Islands Investment holding company
Merian Global Investors (Singapore)
PTE Limited
50 Raffles Place, #27-01 Singapore Land Tower,
Singapore
Investment management
NZS Capital LLC (25% ownership) 850 New Burton Road, #201, Dover, Delaware, USA Investment management
Tyndall Holdings Limited 70 Victoria Street, London, UK Investment holding company
Tyndall Investments Limited 70 Victoria Street, London, UK Dormant
1. Previously known as Merian Global Investors (Asia Pacific) Limited.
2. Previously known as Merian Global Investors (Europe) Limited.
3. Previously known as Merian Investment Management Limited.
4. Previously known as Merian Global Investors (UK) Limited.
During the year, Merian Global Investors (Switzerland) GmbH merged with Jupiter Asset Management (Switzerland) AG. Jupiter Asset Management Australia
Pty Limited was incorporated on 19 January 2022.
The following information relates to seed investments which are judged to be subsidiaries of the Group at 31 December 2021:
Name Registered office Principal activities
Percentage of AUM
indirectly held by
the Company
Jupiter European Smaller Companies Fund 70 Victoria Street, London, UK Unit trust 30%
Jupiter Global Fund SICAV: Europe ex UK Equity
1
6 Route de Trèves, Senningerberg, Luxembourg SICAV sub-fund 66%
Jupiter Global Fund SICAV: Flexible Income 6 Route de Trèves, Senningerberg, Luxembourg SICAV sub-fund 81%
Jupiter Global Fund SICAV: Flexible Macro 6 Route de Trèves, Senningerberg, Luxembourg SICAV sub-fund 83%
Jupiter Global Fund SICAV: Global High
Yield Bond
2
6 Route de Trèves, Senningerberg, Luxembourg SICAV sub-fund 77%
Jupiter Global Fund SICAV: Global Sustainable
Equities
6 Route de Trèves, Senningerberg, Luxembourg SICAV sub-fund 86%
Jupiter Merlin Real Return 70 Victoria Street, London, UK Unit trust 76%
1. Previously known as Jupiter Global Fund SICAV: Eurozone Equity.
2. Previously known as Jupiter Global Fund SICAV: Global High Yield Short Duration Bond.
The following information relates to seed investments in funds where the Group holds more than 20% of the shares in any single share class, but over
which the Group has neither control nor significant influence:
Name Registered office Principal activities
Jupiter Asset Management Series Plc: Europe (ex
UK) Smaller Companies Fund
53 Merrion Square, South Dublin, Ireland ICVC sub-fund
Jupiter Asset Management Series Plc: Gold & Silver
Fund
53 Merrion Square, South Dublin, Ireland ICVC sub-fund
Jupiter Asset Management Series Plc: Jupiter
Emerging Market Debt Income Fund
53 Merrion Square, South Dublin, Ireland ICVC sub-fund
Jupiter Asset Management Series Plc: Merian Global
Dynamic Bond
53 Merrion Square, South Dublin, Ireland ICVC sub-fund
Jupiter Asset Management Series Plc: North
American Equity Fund (IRL)
53 Merrion Square, South Dublin, Ireland ICVC sub-fund
Jupiter Asset Management Series Plc: Strategic
Absolute Return Bond
53 Merrion Square, South Dublin, Ireland ICVC sub-fund
Jupiter Asset Management Series Plc: UK Specialist
Equity Fund
53 Merrion Square, South Dublin, Ireland ICVC sub-fund
Jupiter Global Fund SICAV: Asia Pacific Income 6 Route de Trèves, Senningerberg, Luxembourg SICAV sub-fund
Jupiter Global Fund SICAV: Dynamic Bond 6 Route de Trèves, Senningerberg, Luxembourg SICAV sub-fund
Jupiter Global Fund SICAV: European Growth 6 Route de Trèves, Senningerberg, Luxembourg SICAV sub-fund
Jupiter Global Fund SICAV: Financial Innovation 6 Route de Trèves, Senningerberg, Luxembourg SICAV sub-fund
Jupiter Global Fund SICAV: Global Convertibles 6 Route de Trèves, Senningerberg, Luxembourg SICAV sub-fund
Jupiter Global Fund SICAV: Global Ecology Growth 6 Route de Trèves, Senningerberg, Luxembourg SICAV sub-fund
Jupiter Global Fund SICAV: Global Emerging
Markets Corporate Bond
6 Route de Trèves, Senningerberg, Luxembourg SICAV sub-fund
Notes to the Company Financial Statements
continued
168
Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
Name Registered office Principal activities
Jupiter Global Fund SICAV: Global Emerging
Markets Short Duration Bond
6 Route de Trèves, Senningerberg, Luxembourg SICAV sub-fund
Jupiter Global Fund SICAV: Global Equity Growth
Unconstrained
6 Route de Trèves, Senningerberg, Luxembourg SICAV sub-fund
Jupiter Global Fund SICAV: Japan Select 6 Route de Trèves, Senningerberg, Luxembourg SICAV sub-fund
Jupiter Global Fund SICAV: Jupiter Global
Sovereign Opportunities
6 Route de Trèves, Senningerberg, Luxembourg SICAV sub-fund
Jupiter Global Fund SICAV: Pan European Smaller
Companies
6 Route de Trèves, Senningerberg, Luxembourg SICAV sub-fund
Jupiter Global Sustainable Equities 70 Victoria Street, London Unit trust
Jupiter Investment Funds Series II: Global
Strategic Bond Fund
70 Victoria Street, London OEIC sub-fund
Jupiter Investment Management Series I:
Monthly Income Bond Fund
70 Victoria Street, London OEIC sub-fund
Jupiter Investment Management Series I: UK
Equity Income Fund
70 Victoria Street, London OEIC sub-fund
MGI Arbea Fund Limited 190 Elgin Avenue, George Town, Grand Cayman Hedge Fund
31. Financial instruments held at fair value
In 2020, the Company purchased a forward contract over 9m of its own shares for the purpose of satisfying share option obligations to employees. This
contract was settled in November 2021. In 2021, the EBT purchased shares in certain funds managed by the Group in order to hedge compensation awards
made by a subsidiary of the Company.
2021
£m
2020
£m
Financial assets
Financial assets at FVTPL 13.3 3.7
13.3 3.7
32. Trade and other receivables
Trade and other receivables are initially recorded at fair value and subsequently at amortised cost. All trade and other receivables are due within one year
or repayable on demand. In line with the Company’s historical experience, and after consideration of current credit exposures, the Company does not
expect to incur any credit losses and has not recognised any expected credit losses in the current year (2020: £nil).
2021
£m
2020
£m
Amounts owed from subsidiaries 104.3 103.0
Trade receivables – 2.6
Prepayments and accrued income 0.1 0.2
104.4 105.8
33. Cash and cash equivalents
2021
£m
2020
£m
Cash at bank and in hand 0.7 0.5
Cash held by EBT 0.3 –
1.0 0.5
34. Cash flows from operating activities
2021
£m
2020
£m
Operating profit 77.9 64.4
Adjustments for:
Fair value losses/(gains) on current financial assets at fair value through profit or loss 3.8 (3.7)
Decrease/(increase) in trade and other receivables 0.6 (85.6)
Increase in trade and other payables 90.7 55.3
Cash inflows on exercise of share options 0.1 0.2
Cash generated from operations 173.1 30.6
Notes to the Company Financial Statements
continued
169Jupiter Fund Management plc | Annual Report & Accounts 2021
35. Trade and other payables
2021
£m
2020
£m
Amounts owed to subsidiaries 150.3 56.9
Accruals 3.5 3.8
153.8 60.7
36. Financial instruments
Financial instruments by category
The carrying value of the financial instruments of the Company at 31 December is shown below:
2021
Financial
assets held at
amortised cost
£m
Financial assets
held at fair
value through
profit or loss
£m
Financial liabilities
held at amortised
cost
£m
Total financial
instruments
£m
Non-financial
instruments
£m
Total
£m
Investment in subsidiary undertakings – – – – 541.1 541.1
Financial assets at FVTPL – 13.3 – 13.3 – 13.3
Current trade and other receivables 104.4 – – 104.4 – 104.4
Cash and cash equivalents 1.0 – – 1.0 – 1.0
Non-current loans and borrowings – – (49.3) (49.3) – (49.3)
Current trade and other payables – – (153.8) (153.8) – (153.8)
Current income tax liability – – – – (0.1) (0.1)
Total 105.4 13.3 (203.1) (84.4) 541.0 456.6
2020
Financial
assets held at
amortised cost
£m
Financial assets
held at fair
value through
profit or loss
Financial liabilities
held at amortised
cost
Total financial
instruments
£m
Non-financial
instruments
£m
Total
£m
Investment in subsidiary undertakings – – – – 515.6 515.6
Financial assets at FVTPL – 3.7 – 3.7 – 3.7
Current trade and other receivables 105.8 – – 105.8 – 105.8
Cash and cash equivalents 0.5 – – 0.5 – 0.5
Non–current loans and borrowings – – (49.2) (49.2) – (49.2)
Current trade and other payables – – (60.7) (60.7) – (60.7)
Total 106.3 3.7 (109.9) 0.1 515.6 515.7
For financial instruments held at 31 December 2021, issued subordinated debt, recorded within non-current loans and borrowings above, had a fair value of
£58.8m (2020: £54.0m), less unamortised expenses of £0.3m (2020: £0.4m).
At 31 December 2020 and 2021, the following hierarchy was used for determining and disclosing the fair value of financial instruments:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: other techniques, for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data
(unobservable inputs).
As at 31 December 2021, the Company held the following financial instruments measured at fair value:
2021
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
Financial assets at FVTPL – funds 13.3 – – 13.3
As at 31 December 2020, the Company held the following financial instruments measured at fair value:
2020
Level 1
£m
Level 2
£m
Level 3
£m
Total
£m
Financial assets at FVTPL – derivatives – 3.7 – 3.7
Notes to the Company Financial Statements
continued
170
Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
Financial assets at FVTPL
Financial assets at FVTPL – funds relates to hedges of awards in fund shares.
Financial assets at FVTPL – derivatives held at 31 December 2020 related to a forward contract the Group held over its own shares for the purpose of
hedging pricing risk in respect of unfunded share option obligations to employees.
Price risk
Price risk is the risk that a decline in the value of assets will adversely impact the profitability of the Company. Management has identified price risk as the
exposure to unfavourable movements in the value of financial assets held by the Company which would result in a loss recognised in the consolidated
income statement. The Company is not exposed to commodity price risk. The Company, through an EBT, holds listed equity investments as a hedge
against compensation awards made by a subsidiary of the Company. Gains and losses are borne by the subsidiary and, as a result, the Company is not
subject to price risk on these investments.
At 31 December 2020, the Company held a forward contract over its own shares for the purpose of satisfying share option obligations to employees. The
value of the contract was exposed to the risk of changes in equity markets. At 31 December 2020, the fair value, and therefore maximum exposure to listed
securities, was £3.7m.
Price risk sensitivity analysis on financial assets
The Directors believe that 10% gives a reasonable measure of the Group’s sensitivity to price risk. An increase or decrease of 10% in equity markets would
have the impact shown below on the Company’s profit before taxation. This reflects estimated gains and losses on the Company’s investments at the
balance sheet date and not any likely impact on the Company’s revenue or costs. There is no further impact on the Company’s equity.
Impact on the income statement of change in equity markets
2021
£m
2020
£m
+10% – 2.5
-10% – (2.5)
The Company’s exposure to foreign exchange, interest rate, credit and liquidity risk is not considered to be material and, therefore, no further information
is provided.
37. Related parties
Investments in subsidiary undertakings are disclosed in Note 29 and the amounts due from and to subsidiaries in Notes 32 and 35.
Key management compensation
The Company also considers transactions with its key management personnel as related party transactions. Key management personnel is defined as the
Directors, together with other members of the Executive Committee. The aggregate compensation paid or payable to key management for employee
services is shown below:
2021
£m
2020
£m
Short–term employee benefits 2.3 0.9
Share–based payments 2.4 0.6
Other long-term benefits 0.1 –
4.8 1.5
Notes to the Company Financial Statements
continued
171Jupiter Fund Management plc | Annual Report & Accounts 2021
Report on the audit of the financial statements
Opinion
In our opinion, Jupiter Fund Management plc’s group financial statements and company financial statements (the “financial statements”):
• give a true and fair view of the state of the group’s and of the company’s affairs as at 31 December 2021 and of the group’s profit and the group’s and
company’s cash flows for the year then ended;
• have been properly prepared in accordance with UK-adopted international accounting standards; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report & Accounts 2021 (the “Annual Report”), which comprise: consolidated and
company balance sheets as at 31 December 2021; consolidated income statement and consolidated statement of comprehensive income; the consolidated
and company statements of cash flows; the consolidated and company statements of changes in equity for the year then ended; and the notes to the
financial statements, which include a description of the significant accounting policies.
Our opinion is consistent with our reporting to the Audit and Risk Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK)
are further described in the Auditors’ responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,
which includes the FRC’s Ethical Standard, as applicable to listed public interest entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the FRC’s Ethical Standard were not provided.
Other than those disclosed in note 3 to the group financial statements, we have provided no non-audit services to the company or its controlled
undertakings in the period under audit.
Our audit approach
Context
Jupiter Fund Management plc (the “group” or “company”) is an active fund manager servicing retail and institutional clients. Jupiter listed on the London
Stock Exchange in 2010. The group operates principally in the United Kingdom with international operating subsidiaries in Luxembourg, which has branches
across Europe, Ireland, Hong Kong, Singapore, the United States and Switzerland.
Overview
Audit scope
• We performed an audit of the complete financial information of Jupiter Asset Management Limited and Jupiter Investment Management Limited (which
are significant components as each represent more than 15% of the profit before tax of the group), Jupiter Unit Trust Managers Limited, Jupiter Asset
Management International S.A, Jupiter Fund Managers Limited and Jupiter Fund Management plc based on their size and risk.
• As the adjustments made for the consolidation, including those for the seeded funds, are material for a number of financial statement line items (FSLIs),
we scoped in these adjustments as components and performed audit testing.
• We also performed specific audit procedures on certain balances and the financial statement disclosures.
• Taken together, our audit work covered more than 95% of group revenue and 99% profit before tax. Our audit scope provided sufficient appropriate
audit evidence as a basis for our opinion on the group financial statements as a whole.
Key audit matters
• Revenue recognition (group)
• Share-based payments expense and fund unit award employee benefits (group and parent)
• Impairment of goodwill (group)
• Current and deferred tax (group)
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBERS OF JUPITER
FUND MANAGEMENT PLC
172 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
Materiality
• Overall group materiality: £9.0 million (2020: £8.9 million) based on 5% of profit before tax (2020: underlying profit before tax).
• Overall company materiality: £6.6 million (2020: £5.6 million) based on 1% of total assets.
• Performance materiality: £6.75 million (2020: £6.7 million) (group) and £4.9 million (2020: £4.2 million) (company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the audit of the financial statements of the
current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by the auditors, including
those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement
team. These matters, and any comments we make on the results of our procedures thereon, were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
“Valuation of intangibles from the acquisition of Merian and impairment of the goodwill arising on acquisition” and “Impact of COVID-19”, which were key
audit matters last year, are no longer included because of those matters not being significant to the year ended 31 December 2021. Otherwise, the key
audit matters below are consistent with last year.
Key audit matter How our audit addressed the key audit matter
Revenue recognition (group)
Refer to Note 1. Revenue and Note 27. Basis of preparation and other
accounting policies.
Revenue is the most significant balance in the consolidated income
statement. The group’s primary source of revenue is management fees.
Management fees are earned from ongoing business activities and are
shown net of rebates. The group also earns performance fees when agreed
performance conditions have been met.
Management fees consist of gross management fees from pooled funds,
which includes, ICVCs, SICAVs, Unit Trusts and Investment Trusts; and
Segregated Mandates. Management outsourced various control activities
related to these revenue streams to third party service providers.
The value of management fees, net of rebates and discounts, received
during the year was £501.5m. The bulk of this revenue comes from pooled
funds, with segregated mandates contributing £25.9m. The key risk areas
related to management fees include:
• fee terms being incorrectly interpreted or entered into fee calculations;
• assets under management (‘AUM’) not being correctly attributed to fee
agreements;
• errors in manual calculations (for segregated mandates only); and
• rebates may not be recorded completely and accurately.
The value of performance fees received during the year was £113.0m.
Performance fees are manually calculated and more complicated than
management fee calculations, increasing the risk of error. The performance
fee calculation requires accurate implementation of the methodology set
out in the investment management arrangements listed in the legal
agreements which are bespoke to each fund / client.
Given the complexity and significance to the income statement we have
determined management fees and performance fees to be a key audit
matter.
We understood and evaluated the design and implementation of key
controls in place around revenue. This included outsourced activities at
third-party service providers.
In order to place reliance on the relevant controls over valuation and
existence of investments (AUM) at the outsourced providers we obtained
control reports issued by the independent service auditor of the third-
party providers. Where appropriate, we have obtained and reviewed
bridging letters issued by the third-party providers and performed
complementary user entity controls testing. We found that the key
controls on which we placed reliance were designed, implemented and
operated effectively.
In addition to controls testing we performed substantive audit procedures
which included the following.
For pooled funds we recalculated management fees by obtaining AUM data
from third parties and applying the fee rates. For a sample of fee
calculations we agreed the fee rates used in the calculation to supporting
evidence, such as the fact sheets or prospectus.
For segregated mandates we recalculated management fees for a sample of
invoices by obtaining AUM data and fee rates included within investment
management agreements.
For unit trusts and SICAVs we recalculated rebates using information from
third parties and agreed a sample of rate inputs within our calculation to
discount forms. We also tested the completeness of rebates by reviewing a
sample of unit holders / investors with no recorded rebates or nil rebates
terms and agreed this back to agreements.
For a sample of performance fees our procedures included the below:
• We verified the performance fee calculation methodology by referring
to the legal agreements.
• We assessed whether the performance fee crystallised and hence could
be recognised, by reviewing the legal agreements, ensuring the
performance conditions have been met.
• We recalculated the performance fee using legal agreements and key
inputs used by management. Key inputs have been agreed to legal
agreements, accounting records and third party sources where available.
• We agreed the receipt of performance fees (cash and shares) to the bank
statement and the supporting documentation where possible.
• Where available for investment trusts we agreed the performance fees
to the audited financial statements of the investment trusts concerned.
No material issues were identified.
173Jupiter Fund Management plc | Annual Report & Accounts 2021
Key audit matter How our audit addressed the key audit matter
Share-based payments expense and fund unit award employee benefits
(group and parent)
Refer to the Audit and Risk Committee report, Note 5. Share-based
payment and Note 27. Basis of preparation and other accounting policies.
There are a number of share-based and fund unit award arrangements in
place for which the recognition involves the interpretation of complex
terms, increasing the complexity of the accounting for each scheme.
These arrangements remunerate employees for their services by granting
the right to either shares, options over shares, or fund units, subject to
certain vesting conditions and exercise prices.
Options and share awards are accounted for as equity-settled share-based
payments whereas fund units are accounted for as cash-settled. Equity-
settled awards are fair valued on the date of grant, recognised within
equity and not subsequently adjusted. Cash-settled award fair values are
remeasured at each reporting date and on settlement and recognised as a
liability. For equity-settled awards the conditions are such that the fair
value calculated on grant equals the share price. For cash-settled awards
the conditions are such that at each measurement date the fair value
equals the value of the funds.
The share-based payments expense calculation involves a number of
manual elements and is judgemental in nature, involving estimation of both
the expected future outcome of the performance conditions where
applicable and the level of attrition in future years. For all awards, actual
leavers are adjusted either by reversing the expense recognised that relates
to them (bad leavers) or by accelerating the future expense still to be
recognised into the current year (good leavers).
The group financial statements provide sensitivity disclosures which
demonstrate the impact changes in assumptions may have on the income
statement expense.
We understood and evaluated the design and implementation of key
controls in place around share-based payments.
In testing the share-based payment and fund unit award employee benefits
expense, we performed the following substantive procedures where
relevant to each arrangement.
• Reconciled a sample of new tranches of existing awards granted in the
year to the signed Deeds of Grant, ensuring they were appropriately
authorised, approved and consistent with scheme plans.
• For a sample of new tranches of existing awards granted in the year
(options and fund units) we independently recalculated the fair value.
• Tested the classification of awards as equity or cash-settled;
• Assessed the reasonableness of the key assumptions, leaver rate and
expected outcome of performance conditions, by examining historical
data and performing sensitivity analyses;
• Tested forfeitures and lapses by agreeing samples back to source
documentation and ensuring the expense recognised had been trued up
appropriately, particularly in relation to good leavers and the
acceleration of the expense;
• Tested a sample of options exercised during the year to check they were
exercised in accordance with the terms of the grant;
• For cash-settled and equity-settled awards, tested a sample of current
year charges. For cash-settled, this is based on the year-end price of
underlying funds and results in re-measurement of the liability. For
equity-settled, this is based on fair value at grant date; and
• Agreed the share-based payment disclosures made in the financial
statements back to supporting documentation.
No material issues were identified.
Impairment of goodwill (group)
Refer to the Audit and Risk Committee report, Note 10. Goodwill and Note
27. Basis of preparation and other accounting policies.
Goodwill of £570.6m is the most significant balance in the group’s balance
sheet.
Management is required by IAS 36 ‘Impairment of assets’ to perform an
annual impairment review and consider if there are any impairment
indicators in respect of the carrying value of goodwill. Management has
performed their annual impairment review which demonstrated that no
impairment was required.
The impairment review used a discounted cash flow model to calculate the
net present value of the group’s future earnings. The model involved a
number of estimates and assumptions made by management including
those related to long-term growth rates and costs of capital.
Management has applied judgment in determining the cash generating unit
levels within its business for the purpose of impairment testing of goodwill.
Management has concluded that the group is one cash generating unit,
investment management.
We obtained management’s impairment review and performed the
following substantive procedures.
• We evaluated management’s discounted cash flow model, checking the
relevant inputs to supporting documentation and challenging
management on key assumptions within the calculations. Our challenge
included assessing whether management had incorporated climate
change considerations within their model;
• We evaluated management’s assessment that only one cash generating
unit exists and concluded it was appropriate;
• We challenged management’s sensitivity analysis by performing our own
sensitivity analysis;
• We assessed the accuracy of management’s historic forecasts against
actual financial results to assess the reasonableness of estimates used in
the forecast;
• We considered publicly available information on the asset management
industry and considered whether there were any views contrary to those
of management;
• We compared the fair value implied by management’s models to the
market value of the company for any indicators of impairment; and
• Agreed the goodwill disclosures made in the financial statements back to
supporting documentation.
No material issues were identified.
174 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
Key audit matter How our audit addressed the key audit matter
Current and deferred tax (group)
Refer to Note 8. Income tax expense, Note 13. Deferred tax and Note 27.
Basis of preparation and other accounting policies.
The calculation of the current and deferred tax is produced manually and is
based on a number of supporting complex calculations including share-
based payments and deferred bonuses.
The current income tax charge is calculated on the basis of the tax laws
enacted or substantively enacted at the balance sheet date in the countries
where the group operates and generates taxable items. Management
periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation.
Deferred tax is recognised on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the financial
statements. A deferred tax asset has been recognised by management
which it is considered recoverable.
We obtained management’s current and deferred tax computations and
workings, performing the following testing.
• We checked the mathematical accuracy of management’s computations;
• We agreed the inputs used in the computations to supporting
documentation;
• We evaluated whether the temporary difference will reverse in the
future and challenged management on the assumptions made in relation
to the deferred tax asset recognised;
• We confirmed management had appropriately reflected the changes in
UK corporation tax in their deferred tax calculations;
• Agreed the current and deferred tax disclosures made in the financial
statements back to supporting documentation; and
• We obtained and evaluated transfer pricing arrangements in place across
the group.
No material issues were identified.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking
into account the structure of the group and the company, the accounting processes and controls, and the industry in which they operate.
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole taking
into account the structure of the group and the company, the accounting processes and controls, and the industry in which they operate.
The group operates as a single-segment investment management business and the majority of the operations and finance team are based in the UK
resulting in most of the audit procedures being performed locally by the UK audit team.
In planning our audit, we made enquiries of management to understand the extent of the potential impact of climate change risk on the group’s financial
statements.
Management concluded that there was no material impact on the financial statements. Our evaluation of this conclusion included challenging key
judgements and estimates in areas where we considered that there was greatest potential for climate change impact. This was principally in relation to the
risk of impairment of goodwill as explained in our key audit matter on “Impairment of goodwill”.
We also considered the consistency of the climate change disclosures included in the Strategic Report with the financial statements and our knowledge
from our audit.
Based on the scoping procedures and detailed audit work performed across the group, we have obtained sufficient comfort across the individual account
balances within the group financial statements, obtaining more than 95% coverage over revenue and more than 99% coverage over profit before tax.
175Jupiter Fund Management plc | Annual Report & Accounts 2021
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with
qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating the effect of misstatements, both individually and in aggregate on the financial statements
as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – group Financial statements – company
Overall materiality £9.0 million (2020: £8.9 million). £6.6 million (2020: £5.6 million).
How we determined it 5% of profit before tax (2020: underlying profit before tax) 1% of total assets
Rationale for benchmark
applied
An underlying profit before tax benchmark was applied in 2020 however
given the reduced volatility of profit before tax in 2021, following the
reduction in exceptional costs incurred in connection with the Merian
acquisition during 2020, we believe that profit before tax is the primary
measure used by the shareholders in assessing the performance of the group
during 2021 which is consistent with our materiality benchmark for the years
ended 2018 and 2019.
As the company is a holding company and does
not earn any revenue, total assets is the most
appropriate method to determine materiality and
is a generally accepted auditing benchmark.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group materiality. The range of materiality
allocated across components was between £0.5 million and £8.8 million.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements
exceeds overall materiality. Specifically, we use performance materiality in determining the scope of our audit and the nature and extent of our testing of
account balances, classes of transactions and disclosures, for example in determining sample sizes. Our performance materiality was 75% (2020: 75%) of
overall materiality, amounting to £6.75 million (2020: £6.7 million) for the group financial statements and £4.9 million (2020: £4.2 million) for the company
financial statements.
In determining the performance materiality, we considered a number of factors – the history of misstatements, risk assessment and aggregation risk and
the effectiveness of controls – and concluded that an amount at the upper end of our normal range was appropriate.
We agreed with the Audit and Risk Committee that we would report to them misstatements identified during our audit above £450,000 (group audit)
(2020: £448,000) and £330,000 (company audit) (2020: £282,000) as well as misstatements below those amounts that, in our view, warranted reporting for
qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and the company’s ability to continue to adopt the going concern basis of accounting included:
• We obtained management’s latest forecasts that support the board’s assessment and conclusions with respect to the going concern basis of
preparation of the financial statements.
• We checked the arithmetical accuracy of management’s forecasts.
• We evaluated management’s base case forecast and downside scenarios, challenging the underlying data and adequacy and appropriateness of the
underlying assumptions used to make the assessment, and evaluated the directors’ plans for future actions in relation to their going concern assessment
should these be required.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively,
may cast significant doubt on the group’s and the company’s ability to continue as a going concern for a period of at least twelve months from when the
financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial
statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group’s and the company’s ability to
continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance Code, we have nothing material to add or draw attention
to in relation to the directors’ statement in the financial statements about whether the directors considered it appropriate to adopt the going concern
basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
176 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors’ report thereon. The
directors are responsible for the other information, which includes reporting based on the Task Force on Climate-related Financial Disclosures (TCFD)
recommendations. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or,
except to the extent otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If we identify an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there
is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on these
responsibilities.
With respect to the Strategic report and Directors’ report, we also considered whether the disclosures required by the UK Companies Act 2006 have been
included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described
below.
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors’ report for the year
ended 31 December 2021 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the group and company and their environment obtained in the course of the audit, we did not identify any
material misstatements in the Strategic report and Directors’ report.
Directors’ Remuneration
In our opinion, the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern, longer-term viability and that part of the corporate
governance statement relating to the company’s compliance with the provisions of the UK Corporate Governance Code specified for our review. Our
additional responsibilities with respect to the corporate governance statement as other information are described in the Reporting on other information
section of this report.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance statement is
materially consistent with the financial statements and our knowledge obtained during the audit, and we have nothing material to add or draw attention
to in relation to:
• The directors’ confirmation that they have carried out a robust assessment of the emerging and principal risks;
• The disclosures in the Annual Report that describe those principal risks, what procedures are in place to identify emerging risks and an explanation of
how these are being managed or mitigated;
• The directors’ statement in the financial statements about whether they considered it appropriate to adopt the going concern basis of accounting in
preparing them, and their identification of any material uncertainties to the group’s and company’s ability to continue to do so over a period of at least
twelve months from the date of approval of the financial statements;
• The directors’ explanation as to their assessment of the group’s and company’s prospects, the period this assessment covers and why the period is
appropriate; and
• The directors’ statement as to whether they have a reasonable expectation that the company will be able to continue in operation and meet its
liabilities as they fall due over the period of its assessment, including any related disclosures drawing attention to any necessary qualifications or
assumptions.
Our review of the directors’ statement regarding the longer-term viability of the group was substantially less in scope than an audit and only consisted of
making inquiries and considering the directors’ process supporting their statement; checking that the statement is in alignment with the relevant provisions
of the UK Corporate Governance Code; and considering whether the statement is consistent with the financial statements and our knowledge and
understanding of the group and company and their environment obtained in the course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of the following elements of the corporate governance
statement is materially consistent with the financial statements and our knowledge obtained during the audit:
• The directors’ statement that they consider the Annual Report, taken as a whole, is fair, balanced and understandable, and provides the information
necessary for the members to assess the group’s and company’s position, performance, business model and strategy;
• The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems; and
• The section of the Annual Report describing the work of the Audit and Risk Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement relating to the company’s compliance with the Code
does not properly disclose a departure from a relevant provision of the Code specified under the Listing Rules for review by the auditors.
177Jupiter Fund Management plc | Annual Report & Accounts 2021
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of Directors’ responsibilities, the directors are responsible for the preparation of the financial statements in
accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also responsible for such internal
control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud
or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and the company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate
the group or the company or to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws and regulations related to
breaches of UK regulatory principles, such as those governed by the Financial Conduct Authority (FCA), and we considered the extent to which non-
compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the
financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for fraudulent manipulation of the
financial statements (including the risk of override of controls), and determined that the principal risks were related to posting inappropriate journal entries
to revenue, and management bias in accounting estimates. Audit procedures performed by the engagement team included:
• Enquiries of management, including legal, compliance, risk and internal audit, including consideration of known or suspected instances of non-
compliance with laws and regulations including fraud.
• Reviewing the group/company’s litigation log in so far as it related to non-compliance with laws and regulations and fraud.
• Identifying and testing journal entries, in particular any journal entries posted on non-working days, unexpected account combinations or by
unexpected users.
• Review of relevant meeting minutes, including those of the Audit and Risk Committee and Board.
• Challenging assumptions and judgements made by management in their significant accounting estimates.
• Designing audit procedures to incorporate unpredictability around the nature, timing or extent of our testing.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and
regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material
misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example,
forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques. However, it
typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items
for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population
from which the sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/
auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance with Chapter 3 of Part 16 of the
Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
178 Jupiter Fund Management plc | Annual Report & Accounts 2021
FINANCIAL STATEMENTS
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited
by us; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• the company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting records
and returns.
We have no exceptions to report arising from this responsibility.
Appointment
We were appointed by the Directors to audit the financial statements for the year ended 31 December 2007 and subsequent financial periods. Following a
competitive tender process in 2014, we were reappointed as auditor of the Company by recommendation of the Audit and Risk Committee for the period
ending 31 December 2015 and subsequent financial periods. The period of total uninterrupted engagement is 15 years, covering the years ended 31
December 2007 to 31 December 2021.
Other matter
As required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule 4.1.14R, these financial statements form part of the ESEF-
prepared annual financial report filed on the National Storage Mechanism of the Financial Conduct Authority in accordance with the ESEF Regulatory
Technical Standard (‘ESEF RTS’). This auditors’ report provides no assurance over whether the annual financial report has been prepared using the single
electronic format specified in the ESEF RTS.
Colleen Local (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
24 February 2022
179Jupiter Fund Management plc | Annual Report & Accounts 2021
HISTORICAL SUMMARY (UNAUDITED)
for the year ended 31 December 2021
2021
£m
2020
£m
2019
£m
2018
£m
2017
£m
Net revenue 568.6 457.8 379.1 412.7 409.5
Administrative expenses (353.1) (312.1) (228.5) (225.1) (214.8)
Other (losses)/gains (4.4) 3.3 4.1 (6.5) 0.6
Amortisation of intangible assets (20.6) (11.3) (1.8) (1.8) (2.3)
Operating profit 190.5 137.7 152.9 179.3 193.0
Finance income – – 0.1 0.1 0.1
Finance costs (6.8) (5.1) (2.0) (0.2) (0.2)
Profit before taxation 183.7 132.6 151.0 179.2 192.9
Income tax expense (34.1) (27.3) (28.2) (36.2) (38.1)
Profit for the year 149.6 105.3 122.8 143.0 154.8
Earnings per share
Basic (p/share) 27.6 21.3 27.5 31.8 34.5
Diluted (p/share) 26.9 20.8 26.8 31.1 33.7
Dividends per share
Interim (p/share) 7.9 7.9 7.9 7.9 6.8
Final (p/share) 9.2 9.2 9.2 9.2 10.3
Special (p/share) – 3.0 – 11.4 15.5
Total dividends paid out of current year profit 17.1 20.1 17.1 28.5 32.6
AUM at year end (£bn) 60.5 58.7 42.8 42.7 50.2
Average headcount (number) 584 593 529 533 504
Cash and cash equivalents (£m) 197.3 188.1 179.4 201.7 234.2
Net cash inflows from operating activities (£m) 188.9 104.6 149.8 170.5 194.6
Underlying profit before tax (£m) 216.7 179.0 162.7 183.0 193.8
Underlying earnings per share (p/share) 31.7 28.7 28.8 32.4 34.2
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Jupiter Fund Management plc | Annual Report and Accounts 2021
OTHER INFORMATION
The Group uses Alternative Performance Measures (APMs) for two principal reasons:
• We use ratios to provide metrics for users of the accounts; and
• We use revenue, expense and profitability-based APMs to explain the Group’s underlying profitability.
These non-IFRS measures are considered additional disclosures and are not intended to replace the financial information prepared in accordance with the
basis of preparation detailed in the financial statements. Moreover, the way in which the Group defines and calculates these measures may differ from the
way in which these or similar measures are calculated by other entities. Accordingly, they may not be comparable to measures used by other entities in
the asset management industry.
Ratios
The Group calculates ratios to provide comparable metrics for users of the accounts. These ratios are derived from other APMs that measure underlying
revenue and expenditure data.
In the 2021 Annual Report and Accounts, we have used the following ratios:
APM 2021 2020 Definition Reconciliation
1 Net management fee margin 76 bps 79 bps Net management fees divided by average AUM See table 1 below
2 Operating margin 39% 41% Operating profit (before exceptional items) divided
by Adjusted net revenue
3 Operating margin before
performance fees
38% 39% Operating profit (before exceptional items and
performance fees) divided by Net revenue before
performance fees
4 Total compensation ratio 37% 35% Fixed staff costs before exceptional items plus
Variable staff costs before exceptional items as a
proportion of Net revenue
5 Total compensation ratio before
performance fees
33% 35% Fixed staff costs before exceptional items plus
Variable staff costs before exceptional items and
performance fees as a proportion of Net revenue
before performance fees
6 Underlying EPS 31.7p 28.7p Underlying profit after tax divided by average issued
share capital
7 Underlying pay-out ratio 54% 60% Total ordinary dividend per share divided by
underlying EPS
8 Underlying EPS before net
performance fees
24.1p 22.9p Underlying profit after tax before net performance
fees divided by average issued share capital
THE USE OF ALTERNATIVE PERFORMANCE
MEASURES IN THIS ANNUAL REPORT
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Jupiter Fund Management plc | Annual Report and Accounts 2021
Reconciliations: table 1
APM
2021
£m
2020
£m
Management fees (page 137) 501.5 426.6
Less: Fees and commissions relating to management fees (page 137) (47.8) (42.6)
Net management fees 453.7 384.0
Average AUM (£bn) 59.7 47.8
Net management fee margin 1 76 bps 79 bps
Operating profit (page 132) 190.5 137.7
Exceptional items (page 24) 33.0 46.4
Operating profit (before exceptional items) 223.5 184.1
Net revenue (page 132) 568.6 457.8
Less: Performance fees classified as exceptional items (page 137) – (10.0)
Adjusted net revenue 568.6 447.8
Operating margin 2 39% 41%
Operating profit (before exceptional items) (see above) 223.5 184.1
Performance fee profits (page 21) (52.1) (35.9)
Operating profit (before exceptional items and performance fees) 171.4 148.2
Net revenue before performance fees (page 21) 455.6 384.2
Operating margin before performance fees 3 38% 39%
Fixed staff costs before exceptional items (page 21) 73.0 76.1
Variable staff costs before exceptional items (page 21) 140.0 85.8
Total 213.0 161.9
Net revenue (see above) 568.6 457.8
Total compensation ratio 4 37% 35%
Fixed staff costs before exceptional items (see above) 73.0 76.1
Variable staff costs before exceptional items and performance fees (page 21) 79.1 58.1
Total 152.1 134.2
Net revenue before performance fees (see above) 455.6 384.2
Total compensation ratio before performance fees 5 33% 35%
Statutory profit before tax (page 132) 183.7 132.6
Exceptional items (see above) 33.0 46.4
Underlying profit before tax 216.7 179.0
Tax at average statutory rate of 19% (41.2) (34.0)
Underlying profit after tax 175.5 145.0
Average issued share capital (m) (page 144) 553.1 505.4
Underlying EPS 6 31.7p 28.7p
Total ordinary dividend per share (page 152) 17.1p 17.1p
Underlying EPS (see above) 31.7p 28.7p
Underlying pay-out ratio 7 54% 60%
Underlying profit after tax before net performance fees (page 25) 133.3 115.9
Average issued share capital (m) (see above) 553.1 505.4
Underlying EPS before net performance fees 8 24.1p 22.9p
Revenue, expense and profit-related measures
1. Asset managers commonly draw out subtotals of revenues less cost of
sales, taking into account items such as fee expenses, including
commissions payable, without which a proportion of the revenues would
not have been earned. Such net subtotals can also be presented after
deducting non-recurring exceptional items.
2. The Group uses expense-based APMs to identify and separate out
non-recurring exceptional items or recurring items that are of significant
size in order to provide useful information for users of the accounts who
wish to determine the underlying cost base of the Group. To further
assist in this, we also provide breakdowns of administrative expenses
below the level required to be disclosed in the statutory accounts, for
example, distinguishing between variable and fixed compensation, as well
as non-compensation expenditure. These subdivisions of expenditure are
also presented before and after exceptional items and after accounting
for the impact of performance fee pay-aways to fund managers.
3. Profitability-based APMs are effectively the sum of the above revenue
and expense-based APMs and are provided for the same purpose - to
separate out non-recurring exceptional items or recurring items that are
of significant size in order to provide useful information for users of the
accounts who wish to determine the underlying profitability of the
Group.
4. Underlying profit after tax is, in addition, used to calculate underlying EPS
which determines the Group’s ordinary dividend per share and is used in
one of the criteria for measuring the vesting rates of share-based awards
that have performance conditions attached.
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OTHER INFORMATION
183
Jupiter Fund Management plc | Annual Report and Accounts 2021
In the 2021 Annual Report and Accounts, we have used the following
measures which are reconciled or cross-referenced in table 1:
Rationale for use
of measure
Net management fees 1
Operating profit 3
Exceptional items 1, 2
Net revenue 1
Adjusted net revenue 1
Performance fee profits 3
Fixed staff costs before exceptional items 2
Variable staff costs before exceptional items
1
2
Underlying profit before tax 3
Underlying profit after tax 3, 4
1. We also use this measure excluding performance fees – see pages 23 and 24.
As stated in 2 above, the Group presents a breakdown of administrative
expenses below the level required to be disclosed in the statutory
accounts, distinguishing between variable and fixed compensation, as well
as non-compensation expenditure. The relevant amounts are set out in the
table on page 21.
Changes in use of APMs since 2020
In 2021, as a result of significant performance fee earnings, we have
introduced four new APMs that serve to exclude the impact of both
performance fees earned and amounts paid away to employees in respect
of those performance fees. The purpose of the new APMs is to make it
easier for users of the accounts to see the Group’s underlying results and
profitability by excluding these substantial items of revenue and expense
which, by their nature, are unlikely to be comparable year-on-year. These
measures are:
• Operating margin before performance fees;
• Total compensation ratio before performance fees;
• Underlying EPS before net performance fees; and
• Performance fee profits.
In 2020, but not 2021, we used ‘Variable compensation ratio’ as an APM. In
addition, ‘Operating expenses (before exceptional items)’ was also an APM,
although its sole purpose was to enable the calculation of the variable
compensation ratio. The Group’s principal external reporting measure of
compensation is the total compensation ratio.
SHAREHOLDER INFORMATION
Shareholder enquiries All enquiries relating to holdings of shares in Jupiter Fund Management plc, including notification of change of
address, queries regarding dividend/interest payments or the loss of a share certificate, should be addressed to the
Company’s Registrars:
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
Tel: 0871 664 0300 (Calls are charged at the standard geographic rate and will vary by provider)
Overseas tel: +44 (0) 371 664 0300
Calls outside the UK will be charged at the applicable international rate.
Lines are open (UK only) 9.00am-5.30pm Monday to Friday.
Email: shareholderenquiries@linkgroup.co.uk
Other shareholder queries should be addressed to the Company Secretary (shareholderservices@jupiteram.com).
Share dealing service There is a share dealing service offered by the Registrars. It is a simple way to buy and sell shares via the internet or
telephone with quick settlement. For information visit: www.linksharedeal.com
For telephone purchases:
Tel: 0371 664 0445. Lines are open 8.00am to 4.30pm, Monday to Friday. UK calls are charged at the standard
geographic rate. Calls outside the UK will be charged at the applicable international rate.
Financial calendar Event Date
Ex-dividend date for final dividend 21 April 2022
Record date for final dividend 22 April 2022
Trading update 26 April 2022
Annual General Meeting 11 May 2022
Payment date for final dividend 20 May 2022
Interim results announcement 29 July 2022
Trading update 18 October 2022
Company details and
principal office
Jupiter Fund Management plc
The Zig Zag Building
70 Victoria Street
London SW1E 6SQ
Registered number: 6150195
Company Secretary – Lisa Daniels
Tel: 020 3817 1000
Website The Company has a corporate website, which holds, amongst other information, copies of its latest annual report and
copies of all press announcements released. This site can be found at www.jupiteram.com
Share information The Company’s ordinary shares are traded on the London Stock Exchange:
ISIN GB00B53P2009
SEDOL B53P200
TICKER JUP.LN
Electronic communications We encourage shareholders to receive shareholder documentation electronically to help reduce the environmental
impact caused by printing and distributing hard copies. You can register your communication preference at
www.signalshares.com
Electronic proxy voting This year we have not produced hard copies of the proxy form and are requesting all shareholders vote electronically
by logging onto www.signalshares.com and selecting Jupiter Fund Management plc. Alternatively you can request a
hard copy proxy form by calling our Registrars, Link Group, on the number above. Further information can be found
in the 2022 Notice of Annual General Meeting.
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OTHER INFORMATION
GLOSSARY OF TERMS
A
Act
Companies Act 2006 (as amended, supplemented
or replaced from time to time)
AGM
Annual General Meeting
AIFM
Alternative Investment Fund Manager
AML
Anti-money laundering
APM
Alternative Performance Measures as defined on
pages 181-183
AUM
Assets under management
B
Board
The Board of Directors of the Company
Bps
One one-hundredth of a percentage point (0.01%)
BREEAM
Building Research Establishment Environmental
Assessment Method is the world’s longest
established method of assessing, rating, and
certifying the sustainability of buildings
Brexit
The withdrawal of the United Kingdom from
membership of the European Union
C
CASS
The FCA’s Client Asset Sourcebook rules
CDP
Formerly the Carbon Disclosure Project
CGU
Cash-generating unit
Code
UK Corporate Governance Code adopted by the
Financial Reporting Council in 2018
Company
Jupiter Fund Management plc
CREST
The system for paperless settlement of trades in
listed securities, of which Euroclear UK & Ireland
Limited is the operator
C (continued)
CSR
Corporate Social Responsibility
D
D&I
Diversity and Inclusion
DBP
Deferred Bonus Plan
DBP
Deferred Earn Out
E
EBT
The Jupiter employee benefit trust established
pursuant to a trust deed dated 22 April 2004
EPS
Earnings per share
ESG
Environmental, social and governance
EU
The European Union
F
FCA
Financial Conduct Authority of the United
Kingdom
FRC
Financial Reporting Council
FSA
Free Share Award
FVTPL
Fair value through profit or loss
G
GHG
Greenhouse gas
Good Work Initiative
A ShareAction-led coalition that brings together
institutional investors to collaboratively engage
on workforce issues, including the Living Wage,
diversity and inclusion and insecure working
practices
Group
The Company and all of its subsidiaries
I
IAS
International Accounting Standard(s)
ICAAP
Internal Capital Adequacy Assessment Process
ICARA
Internal Capital Adequacy and Risk Assessment
ICAV
Irish Collective Asset-management Vehicle
ICVC
Investment Company with Variable Capital
IFRS
International Financial Reporting Standard(s)
IFRS IC
IFRS Interpretations Committee
IIGCC
Institutional Investors Group on Climate Change
ISA
International Share Award
J
Jupiter
The Company and all of its subsidiaries
K
KPI
Key performance indicator
L
Listing
The Company’s Listing on the London Stock
Exchange on 21 June 2010
Listing Rules
Regulations subject to the oversight of the FCA
applicable to the Company following Listing
LGBTQ+
Lesbian, gay, bisexual, transgender and other
sexual or gender identities
LTIP
Long-term Incentive Plan for retention
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Jupiter Fund Management plc | Annual Report and Accounts 2021
M
Merian
Merian Global Investors Limited and its subsidiary
undertakings
Mutual funds
Collective investments where a group of
investors pool their money (buying units
or a portion of the mutual fund)
N
NZAM
Net Zero Asset Management
NZIF
Net Zero Investment Framework
O
OEIC
Open Ended Investment Company
Ordinary dividends per share
Interim and final/full-year dividends (does not
include any special dividends)
P
PBT
Profit before tax
Platforms
Service providers that enable investors to buy
and hold in a single place a range of investments
from multiple providers with different tax
wrappers
PPA
Purchase price agreement
R
RCF
Revolving credit facility
RE100
RE100 is a global corporate renewable
energy initiative, bringing together businesses
committed to 100% renewable electricity
Registrar
Link Asset Services
RFP
Request for proposal
S
SAYE
Save As You Earn
SEDOL
Stock Exchange Daily Official List
Segregated mandates
An investment strategy run exclusively
for certain institutional clients
SFDR
Sustainable Finance Disclosure Regulation
SICAV
Société d’Investissement à Capital Variable; an
open-ended collective investment scheme
offered in Europe
SIP
Share Incentive Plan
SMCR
Senior Managers and Certification Regime;
an FCA regime governing the regulation of senior
employees of entities operating in
the financial services sector in the UK
SONIA
Sterling Overnight Index Average
T
TCFD
The Financial Stability Board Task Force on
Climate-related Financial Disclosures (TCFD) is a
market-driven initiative to help investors
understand their financial exposure to climate risk
and help companies disclose this information in a
clear and consistent way
U
UCITS
Undertaking for Collective Investment in
Transferable Securities as defined by EC Council
Directive 85/611/EEC, as amended
UNGC
United Nations Global Compact. A UN-led pact
to encourage businesses worldwide to adopt
sustainable and socially responsible policies, and
to report on their implementation. It is the
world’s largest corporate sustainability initiative
and is based on ten principles in the areas of
human rights, labour, the environment and
anti-corruption
W
WAEP
Weighted average exercise price
WDI
Workforce Disclosure Initiative
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Jupiter Fund Management plc | Annual Report and Accounts 2021
OTHER INFORMATION
This report is printed on Printspeed Offset which is derived from
sustainable sources. Both the manufacturing paper mill and printer
are registered to the Environmental Management System ISO 14001
and are Forest Stewardship Council® chain of custody certified.
Designed and Produced by Black Sun Plc
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Registered address:
The Zig Zag Building
70 Victoria Street
London SW1E 6SQ
www.jupiteram.com