BlackRock bets against Jupiter over asset management study

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BlackRock has bet against the share price of rival Jupiter as analysts point to Jupiter as being most exposed to the fallout from the FCA’s asset management study.

The Financial Times reports BlackRock began shorting Jupiter in October, and increased its short position from 0.88 per cent to 0.94 per cent last month when the regulator published its interim report into the fund management sector.

The FCA has criticised the practice of high active fees for low returns, and proposed an all-in fund management fee and greater clarity on communicating fund charges.

Jupiter has the highest number of retail clients of the UK-listed fund groups, with individual investors accounting for about three-quarters of the firm’s £40bn assets under management.

Broker Liberum analyst Justin Bates told the newspaper: “The FCA is quite clearly focused on pricing. One of the bear bets on Jupiter is that it will bear the brunt of the [FCA’s proposals] more than anyone else, given its higher revenue margin.”

A total of 15 analysts covering Jupiter have either a buy or hold recommendation, compared with three who have a sell recommendation.

BlackRock and Jupiter declined to comment.