April 18, 2018 / 7:28 AM / 7 months ago

UPDATE 1-Fund manager Jupiter hit by Q1 outflows, shares fall

* Q1 net outflows 1.3 bln stg; most from fixed income

* Market returns also weigh, total assets now 46.9 bln stg

* Shares down 3.1 pct, among top mid-cap fallers (Adds detail from statement, analyst quote, share reaction, bullet points)

By Carolyn Cohn

LONDON, April 18 (Reuters) - British asset manager Jupiter Fund Management was hit by 1.3 billion pounds ($1.86 billion) in net outflows in the first quarter, hurt by withdrawals from its fixed income portfolios.

The firm’s assets under management fell 6.6 percent to 46.9 billion pounds at the end of the quarter, hit also by negative market returns, Jupiter said in a trading statement on Wednesday.

“It has been a challenging start to 2018,” Chief Executive Maarten Slendebroek said. “We have seen a period of market turbulence together with subdued demand.”

The firm saw withdrawals of a net 1.1 billion pounds from fixed income. It also said it had seen one “long-standing institutional client” withdraw assets from a segregated mandate, without giving details.

KBW analysts said the outflows were greater than its 700 million pounds forecast and they expected downward pressure on analysts’ 2018 earnings expectations, although they reiterated their ‘market perform’ rating on the stock.

Jupiter’s shares were down 3.1 percent to 451.8 pence per share at 0721 GMT, making it among the worst performers in the FTSE mid-cap index.

The outflows for Jupiter contrast with the performance of emerging markets-focused peer Ashmore on Tuesday and hedge fund group Man Group last week, both of which reported strong quarterly net inflows.

Active managers such as Jupiter have come under pressure from lower-cost index-tracking funds in recent years, compounded by a rise in operational costs that has prompted a rash of mergers and acquisitions across the industry.

As part of its efforts to cushion the impact of the various market pressures, Jupiter said it would continue its plan to drive growth through diversifying by product, client type and country, although this would make short-term flows “less predictable”, Slendebroek said.

$1 = 0.6990 pounds Editing by Silvia Aloisi and Simon Jessop

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