## SOWING THE SEEDS ## FOR A BRIGHTER OUTLOOK ## JUPITER FUND MANAGEMENT PLC Annual Report and Accounts 2021 # CONTENTS ## 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 - 152 Group financial statements - 156 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 1. More details on the Group's use of Alternative Performance Measures (KPIs) can be found on pages 58 to 65. ## FINANCIAL KPIs¹ Net management fees £453.7m 2020: £384.0m Dividends 17.1p 2020: 20.1p Underlying earnings per share 31.7p 2020: 28.7p ## OTHER KEY METRICS Assets under management £60.5bn 2020: £58.7bn Surplus capital over regulatory requirements £117m 2020: £111m 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. ## 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 Jupiter Fund Management plc | Annual Report and Accounts 2021 1 ### STRATEGIC REPORT STRATEGIC REPORT ## OUR PURPOSE AND CULTURAL PILLARS ## 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. ## THE VALUE OF OUR ## ACTIVE MINDS PURPOSE ### We exist to help our clients achieve ### We believe that generating sustainable ### their long-term investment objectives. ### long-term outperformance for our ### clients, in a complex and challenging ### CLIENTS EMPLOYEES ### world, requires diversity of thought and At Jupiter, our clients are our focus and our priority. We are We believe that our value is in our people, whatever their role ### mindset in all its aspects. The ability to dedicated to serving our clients and put their interests at the in the organisation. We encourage collaboration, debate and be agile, entrepreneurial and adaptable centre of our business. diversity. Our employees have the freedom and support they need to perform at their best, to challenge and be open to ### to solve problems is a human quality. We have deep relationships that enable us to understand challenge. ### This is why our approach fosters real what our clients want from us and we engage continuously with them to ensure we deliver to their expectations. When we recruit, we look for talented people to build a ### diversity of thinking, accountability, diverse workforce. We consider diversity and inclusion at a Our commitment to active asset management is a driving ### collaboration and a willingness to be Group-wide level and firmly believe that fostering a culture force. Our fund managers have the freedom to pursue their ### challenged. We seek to be flexible and which embraces differences among people creates a stronger own investment style within a collegiate environment with a and more sustainable business. Through this commitment to ### change as circumstances and our shared commitment to sustainability. improving diversity, we actively promote independence of ### environment evolve around us. Our distinct, entrepreneurial culture encourages independence thought. of thought and individual accountability. This enables our fund Jupiter is committed to developing its people through its ### We believe that a combination of managers to follow their convictions and seek those talent and learning programmes. We strongly encourage investment opportunities that they believe will ensure the ### experience and creativity, as well as employee share ownership and provided free Jupiter share best outcome for our clients. awards to all staff in each of the last three years, aligning the ### a commitment to keep listening and interests of employees and shareholders, which will ultimately ### learning across all of our business, benefit our clients. ### enables us to deliver for our clients and SOCIETY Our value to society lies in being responsible stewards of our ### make a positive difference in the world. clients’ assets, carefully deploying capital and increasing the ### SHAREHOLDERS value of our clients’ savings. We understand that active fund ### We call this advantage Through our unwavering focus on meeting the needs of our management is not only about financial results, but also about clients and achieving superior investment performance, we successfully identifying sustainable businesses that create strive to generate net inflows and drive the growth of the value for both society and shareholders. We believe these business. ## THE VALUE OF companies have better long-term growth prospects, which also delivers benefits for our clients. Combining growth through top quartile net new business with rigorous financial discipline will lead to strong financial Our fund managers engage with our investee companies to ## ACTIVE MINDS. performance. Along with a carefully managed capital base, this help drive improvement in governance and encourage will deliver strong total returns for our shareholders. 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. 2 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## WE EXIST TO HELP OUR CLIENTS ## ACHIEVE THEIR LONG-TERM ## INVESTMENT OBJECTIVES ## OUR OUR ## PURPOSE CULTURAL PILLARS ### We exist to help our clients achieve WE PUT CLIENTS FIRST ### their long-term investment objectives. ### A focus on serving our clients ### and a commitment to delivering ### CLIENTS EMPLOYEES ### superior performance after At Jupiter, our clients are our focus and our priority. We are We believe that our value is in our people, whatever their role ### fees is central to why we exist dedicated to serving our clients and put their interests at the in the organisation. We encourage collaboration, debate and ### centre of our business. diversity. Our employees have the freedom and support they as a business. need to perform at their best, to challenge and be open to We have deep relationships that enable us to understand challenge. what our clients want from us and we engage continuously with them to ensure we deliver to their expectations. When we recruit, we look for talented people to build a ### WE VALUE OUR PEOPLE diverse workforce. We consider diversity and inclusion at a Our commitment to active asset management is a driving ### Group-wide level and firmly believe that fostering a culture Independence of thought and force. Our fund managers have the freedom to pursue their ### which embraces differences among people creates a stronger individual accountability define own investment style within a collegiate environment with a and more sustainable business. Through this commitment to ### shared commitment to sustainability. us. We believe that diversity in improving diversity, we actively promote independence of ### Our distinct, entrepreneurial culture encourages independence thought. people and freedom to think and of thought and individual accountability. This enables our fund ### Jupiter is committed to developing its people through its act differently will set us apart. managers to follow their convictions and seek those talent and learning programmes. We strongly encourage investment opportunities that they believe will ensure the employee share ownership and provided free Jupiter share best outcome for our clients. awards to all staff in each of the last three years, aligning the ### WE SUCCEED TOGETHER interests of employees and shareholders, which will ultimately ### benefit our clients. Only collectively, by working ### SOCIETY ### together as one team, can Our value to society lies in being responsible stewards of our ### clients’ assets, carefully deploying capital and increasing the we meet our individual and ### SHAREHOLDERS ### value of our clients’ savings. We understand that active fund business goals. Through our unwavering focus on meeting the needs of our management is not only about financial results, but also about clients and achieving superior investment performance, we successfully identifying sustainable businesses that create strive to generate net inflows and drive the growth of the value for both society and shareholders. We believe these business. ### companies have better long-term growth prospects, which WE CHALLENGE OURSELVES also delivers benefits for our clients. Combining growth through top quartile net new business with ### We encourage open debate, rigorous financial discipline will lead to strong financial Our fund managers engage with our investee companies to ### performance. Along with a carefully managed capital base, this innovation and continuous help drive improvement in governance and encourage will deliver strong total returns for our shareholders. ### initiatives that could be beneficial for both the firm and improvement. 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 3 ### STRATEGIC REPORT STRATEGIC REPORT ## 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. ## WHO WE SERVE ## CLIENTS SPLIT OF ASSETS UNDER MANAGEMENT (AUM) We exist to help our clients achieve their long-term investment objectives. Investment management By asset class We offer a number of investment strategies Equities 7% within four core asset classes: Fixed Income 6% Multi-Asset • Equities 14% Alternatives 14% • Fixed Income • Multi-Asset | • Alternatives | £58.7bn | | | £60.5bn | | | | --- | --- | --- | --- | --- | --- | --- | | Our investment teams are unconstrained by | | 2020 | | | 2021 | | | | | | 55% | | | 55% | 25% a house view, and are supported by the CIO 24% office and specialists in environmental, social and governance (ESG) issues and data science. Product By vehicle type 2% We offer a range of actively managed investment Mutual funds 1% products. Investments can be made through: Segregated mandates 14% Investment trusts 14% • Mutual funds • Segregated mandates • Investment trusts ## We earn revenues by charging fees to £58.7bn £60.5bn our clients for the provision of investment 2020 2021 management services, typically based on a percentage of the AUM. A number of funds and mandates also have the potential to earn 85% 84% performance fees. Distribution By distribution partner type 2% 1% 3% We primarily access our clients through a range Advisory 2% 2% 1% of distribution partners. Our core partners include: Discretionary 8% Institutional • Funds of funds 9% Direct • Platforms Investment Trust | • Global financial institutions | Other | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | • Advisers | | | £58.7bn | | | £60.5bn | | | | | | | | | 50% | | | 50% | | • Wealth managers | | | | 2020 | | | 2021 | | | • Life companies | | 36% | | | | | | | 36% • Private banks • Institutional clients • Consultants 4 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## HOW WE DO IT ### Talented individuals Meeting our clients’ needs An efficient operating model ### delivering with conviction through working together We have a single operating platform, which we continue to develop to minimise We enable talented individuals to pursue We work together to innovate and deliver complexity and support growth. This their own investment styles. Without the the products that help our clients meet means we remain agile and able to adapt constraints of a house view, our fund their objectives, providing the best as market conditions evolve. managers can follow their convictions to outcomes for our clients, shareholders and deliver the best outcomes for clients. all our stakeholders. ## WHERE WE OPERATE | UK | | | Asia | | --- | --- | --- | --- | | | 71% | 516 | | | | AUM by geographical | Employees | | | | location of client | | 5% | 2020: 555 2020: 72% AUM by geographical location of client 2020: 4% UK ## 15 Employees 2020: 17 Asia ## EMEA ## 21% Third party AUM by geographical Client service via local licensed distributors location of client Remote access 2020: 21% EMEA Rest of ## World 42 Employees 2020: 40 ## Rest of ## 3% 12 ## World AUM by geographical Employees location of clients 2020: 9 2020: 3% Jupiter Fund Management plc | Annual Report and Accounts 2021 5 ### STRATEGIC REPORT ## OUR BUSINESS MODEL ## Jupiter has a clear, robust value creation model, which helps us to ## generate value for our clients, shareholders, people and society. ## WHAT WE DO – THE JUPITER DIFFERENCE HOW WE DO IT ## 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. N T M A N A M E G E T M E S E N V T I N THE JUPITER DIFFERENCE SPECIALIST ACTIVE STRATEGIES HIGH CONVICTION D THOUGHT LEADERS I S T T AGILE & FOCUSED C R I U B U D T O I R O P N | DISTRIBUTION | PRODUCT | | --- | --- | | • Basing our distribution structure around client | • Our product development and governance | | types and geographies gives us a clear | structure brings together our investment | | understanding of our clients’ investment | management and distribution teams, to ensure | | objectives, product and service needs | our product offering is aligned to client needs | | • We build strong relationships with consultants, | • Our product development strategy is focused on | | in line with our culture | innovation to adapt to clients’ changing needs | | > Read more on product and | > Read more on product and | | distribution on page 32. | distribution on page 32. | 6 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## WE EXIST TO HELP OUR CLIENTS ## ACHIEVE THEIR LONG-TERM ## INVESTMENT OBJECTIVES ## THE VALUE WE CREATEHOW WE DO IT FOR CLIENTS ## OPERATING AND ## RISK ENVIRONMENT Investment performance after all fees • We have a single operating platform ## 58% across the Group, minimising complexity We help our clients to meet their long-term and supporting growth investment goals, by delivering investment Mutual fund investment • We drive efficiencies through a disciplined outperformance after all fees. performance approach to investing in our platform • We identify, monitor, manage and mitigate risk through a robust and clearly defined risk framework FOR EMPLOYEES > Read more on our approach to risk Individual development management on page 60. We have a culture that attracts and ## 76% develops talent. We support and ## PEOPLE challenge our people to Employee engagement continuously develop. • 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, FOR SHAREHOLDERS purpose and set of guiding principles Total returns > Read more on our people and culture We target capital and income returns. ## on page 36. 17.1p We pay a progressive ordinary dividend, supplemented by the distribution of any Total dividend capital that is surplus to business needs. ## CAPITAL MANAGEMENT • We maintain a robust capital surplus over our regulatory requirements • We balance investment for growth with returns to shareholders through a clear FOR SOCIETY capital allocation framework Stewardship > Read more on our capital management One of our biggest impacts comes from ## on page 26. 708 engaging with the companies we invest in. Each year, we hold more than 1,000 Engagements with company meetings to obtain investor companies on ESG matters 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 7 ### STRATEGIC REPORT ## CHAIRMAN’S ## STATEMENT ## 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. ## “Jupiter’s agility has ## enabled us to adapt ## throughout the ## pandemic to ensure ## we continue to ## serve our clients’ ## best interests.” Nichola Pease Chairman Dear Stakeholder We believe having a diverse workforce supported Sustainability by an inclusive culture is critical for the future 2021 has been a year of progress in challenging Investing sustainably and building ESG risk success of our business. There have been a circumstances. We have continued to invest in considerations into our processes have long been number of initiatives to help improve diversity key areas of our business, which we believe central to our investment philosophy. across Jupiter and the wider industry, as detailed provide the best opportunity to accelerate our We launched our first sustainable investment on page 39. We have also included diversity growth agenda. This has been achieved despite product in 1988, recognising the benefits of targets in our executive remuneration structures the difficult market context, with the global deploying capital into companies that provide and our people manager objectives to drive pandemic still creating much uncertainty across solutions to environmental and social problems. progress in this important area. the world and continued outflows from the UK As described on page 40, our stewardship and European-focused asset classes. Further information on our culture and people activities are embedded across all of our can be found from page 36 and information on The pandemic has continued to impact our investment strategies and we engage with our the Board’s oversight of these matters can be clients, our people and how we operate our investee companies on ESG matters to drive found on page 79. business; however, Jupiter’s agility has enabled us progress on these key issues. This focus on to adapt throughout the pandemic, to ensure we Helping our clients achieve their long-term sustainability has continued and some key continue to serve our clients’ best interests, investment objectives is wider than pure decisions made by the Board this year related to progress our strategic initiatives and focus on the investment performance. Clients want to invest accelerating and strengthening our sustainable wellbeing of our people. their capital in a sustainable way, through active initiatives. stewardship, which helps to drive change and We joined the Net Zero Asset Management Purpose and culture provides benefits for the world we live in. As an (NZAM) initiative, under which we have Our purpose is to help our clients achieve their active fund manager, we are entrusted stewards committed to operate our business and manage long-term investment objectives. This is of our clients’ capital and recognise the all assets on a net zero emissions basis by 2050 at supported by our culture which puts our clients importance of this role to add value over and the latest. You can read more on our targets, at the heart of everything we do, and drives a beyond delivering investment performance. This plans to deliver this and how we measure our high-performing, collaborative and supportive enables us to further differentiate ourselves from progress on page 45. We have also become a environment for our people. other asset managers whilst building on our long signatory to the UN Global Compact (UNGC), a history of effective stewardship. corporate sustainability initiative which contains 8 Jupiter Fund Management plc | Annual Report and Accounts 2021 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 by 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 92. ### 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 £605bn, we are disappointed to remain in a net outflow position, that outflows for 2021 amounted to £1.8bn, despite continued strong gross sales of £14.5bn. 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 lines, refining our investment offering to meet institutional client needs and evolving our infrastructure to support this type of client activity. ### "We have committed to operate our business and manage all assets on a net zero emissions basis by 2050." 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 CRO's Review starting on page 20. ### Capital allocation In-line with our previously disclosed capital allocation policy, we are proposing a final dividend of 9.3p 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 9.3p 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 30 years, and has driven the development of our investment management capabilities since his appointment as CIO in 2016. 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 Paine Chairman 24 February 2022 Jupiter Fund Management plc | Annual Report and Accounts 2021 9 ### STRATEGIC REPORT ## CHIEF EXECUTIVE ## OFFICER’S REVIEW ## 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. ## “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.” Andrew Formica Chief Executive Officer It was a challenging year for Jupiter despite some It is a challenge we embraced in 2021 as we seeing our clients in person when restrictions significant progress on our strategic objectives. broadened our product offering, invested in our have allowed. The global pandemic remained a disruptive force, talent, and adopted the processes, systems and Despite challenging net flows, Jupiter’s success affecting the way we do business, buffeting technology to meet the evolving needs of our has been built on its ability to navigate the economies and markets, and having a profound clients. Further details on how we are adapting to choppy waters of markets since its inception in impact on how our clients allocate their capital. the challenges in the market can be found on 1985. Forward thinking is key in a highly The UN Climate Change Conference in Glasgow page 13. competitive landscape, where the pace of change kept climate change on the agenda and ESG It is also a year in which we prioritised our has accelerated with the global pandemic. Our considerations firmly in the spotlight. | | support and focus on our people as they | investment in new areas over the last two years is | | --- | --- | --- | | UK equities remained out of favour, despite the | continued to deliver under difficult | starting to deliver and I am optimistic this | | resolution on Brexit, and inflation concerns | circumstances. We enjoyed welcoming our | momentum will carry forward in 2022 to the | | slowed the appeal for fixed income funds, two | colleagues back to the London office in | benefit of our clients, our people and our | | areas where Jupiter has a strong product line-up. | September, some of them for the very first time. | shareholders. | | Client demand remained concentrated in narrow | It was an opportunity to rebuild our cultural | | | areas such as global equities or multi-asset, with | reserves, inevitably somewhat depleted after | Our purpose and performance | | the knock-on effect that Jupiter saw an elevated | nearly 18 months of intermittent remote working. | Jupiter’s purpose is clear. We exist to help our | | level of redemptions across a number of its | For some, it was their first face-to-face meetings | clients achieve their long-term investment | | investment strategies. This challenging net flow | with colleagues since joining Jupiter. | objectives. Our actions are guided this year, as in | | picture, however, was offset by another strong | | every year, by our unwavering focus on delivering | The cultural benefits of being back in the office year for gross sales. At an industry level, passive value for our clients, who are at the heart of were immediately clear to all; being together strategies meanwhile continued to attract client everything we do. We saw a material under one roof in London proved an opportunity flows, putting the onus on us to demonstrate improvement in our annual Assessment of Value to build or rebuild relationships and reinforce a how an active, high-conviction approach to report, with 84% of our funds’ unit classes key cultural pillar of the firm – that only investment can be a differentiator, delivering receiving positive ratings for delivering value. collectively, working together as one team, can value and outperformance to clients. More details on this can be found on page 33. we meet our individual and business goals. Equally, we have been delighted to get back to 10 Jupiter Fund Management plc | Annual Report and Accounts 2021 Our investment performance remains strong, which we will focus our investment, to ensure we Assets under management with 58% of our mutual fund assets continue to move forward. They are: outperforming over three years, one of our KPIs. • Expanding our sustainability capabilities; We have done this by sticking to what we do • Supporting our ambitions in the institutional ## £60.5bn best: truly active, high-conviction asset market; and management. We talk about the value of active • Growing our international presence. 2020: £58.7bn minds because we have built a culture that encourages diversity of thought and intellectual A commitment to sustainability challenge. Our talented managers and their teams Sustainability at Jupiter can be viewed through have a high degree of autonomy, expressing their three lenses: the integration of ESG principles in views in concentrated portfolios with high active the investment process of our managers, our Gross sales shares. More broadly, this focused conviction also sustainable offering to clients, and a commitment means we choose to centre our client offering in to corporate engagement. areas where we believe we can differentiate Jupiter has a proud heritage as an active ## ourselves and consistently deliver for our clients. £16.5bn participant in helping find solutions to era- Our strong financial results this year reflect the defining challenges. In 1988, we were the first ongoing resilience of our business and the 2020: £16.5bn asset manager to offer clients the opportunity to strategy that underpins it. Underlying profit invest in a unit trust, the Jupiter Ecology Fund, before tax was up 21% from £179.0m to £216.7m, entirely dedicated to companies seeking to environmental solutions. We are also making as we saw the full-year benefit of the address environmental issues. Over thirty years significant investments in ESG headcount across contribution from Merian. Full details of our on, we continue to lead the conversation. the business, increasing resource to the central financial results can be found in the CFO review stewardship team and appointing ESG investment In 2021, Jupiter became a signatory to the on page 20. Our strong investment performance directors to a number of our strategies. Institutional Investors Group on Climate Change’s also generated £113m of performance fees this (IIGCC) NZAM initiative, committing us to This investment in our ESG capability and year, driven primarily by the Chrysalis Investment achieving net zero emissions by 2050 across our resources started bearing fruit in 2021. Good flows Trust. While this is excellent performance, we full range of investments and operations. At the and strong investment performance saw AUM in would not expect those elevated levels to be same time, we agreed to align with the UNGC, our Global Sustainable Equity strategy increase by repeated through 2022 or every year going committing us to meeting fundamental almost four times over the year. The strategy has forward. responsibilities in the areas of human rights, also attracted several positive consultant ratings We were disappointed to see net outflows of labour, the environment and anti-corruption. Our over the year, helping attract institutional interest £3.8bn (2020: net outflows of £4.0bn), especially efforts have been recognised by the industry, in the fund. To widen client access to the strategy, given it was another outstanding year of £16.5bn with Morningstar awarding Jupiter an Advanced we launched a Luxembourg-domiciled vehicle. We of gross sales. It was particularly pleasing to see rating for our ESG commitment, one of only five have continued to build out our sustainability strong flows directed towards some of our key asset managers to receive this accolade. offering early in 2022 with the introduction of a growth strategies. Global Sustainable Equities, Sustainable Finance Disclosure Regulation (SFDR) We have also continued to add resource in key which invests in companies leading the transition ‘Article 8’-compliant version of our Dynamic Bond areas, including appointing a new Head of to a more sustainable world, continued to build fund and the launch of the Global Ecology Bond Sustainability, who will coordinate ESG activities momentum and saw net flows of £200m. Our US fund for international markets. and drive our sustainability strategy across the strategic relationship with NZS Capital also hit its firm. To find out more about our corporate stride, boosted by the launch of a Luxembourg- Ambitions in the Institutional channel engagement on ESG matters, please see from domiciled SICAV version of their global equity page 40. The institutional market represents a significant growth strategy, which helped generate over growth opportunity for Jupiter. Institutional clients £300m of net inflows, with total assets under We are not only high-conviction active managers currently only account for 8% of the Group’s management growing to over £1bn. Recently but also stewards of our clients’ capital. We have AUM, but we have a strategic objective to extend launched products have performed well. a responsibility to actively engage with our this contribution over the medium term. | Strategies launched since 2018 have attracted | investee companies and encourage sustainable | | | --- | --- | --- | | £2.2bn of cumulative net inflows and now | practices that we believe drive better outcomes | Developing an institutional business is not just a | | account for £3.6bn of our AUM. More details on | for our clients and, ultimately, all of our | case of targeting new clients, but requires | | our flows this year can be found in the CFO | stakeholders. All our portfolio managers are | investment in talent, products and platform. In | | review on page 22. | required to build ESG risks into their investment | 2021, we invested across all three. We appointed | | | processes. | new institutional regional heads in the UK and Asia | With clients showing real appetite for some of and grew our team in the US. We are in the our new strategies, it has been painful to see this We understand our clients are at different stages process of recruiting a new head of institutional success overshadowed by elevated levels of on the ESG journey. While some clients may only for continental Europe and we are developing an redemptions for the reasons I have cited above. It be looking for their manager to handle financially on-the-ground presence in Australia. has not, however, dented our ability to deliver a material ESG risks on their behalf, there are strong financial performance which has in turn others seeking to minimise the negative impacts We have a wide range of products which are allowed us to invest in the future growth of the of their investment, or who actively require a ideally suited to the institutional market, from | business. We have a strong core business, built | dedicated allocation strategy that delivers | Global Sustainable Equities and NZS Capital’s | | --- | --- | --- | | over more than three decades, that will continue | positive outcomes. We have evolved our product | global growth strategies, to our unconstrained | | to generate the bulk of our revenues over the | suite accordingly, restructuring our sustainable | global fixed income funds and emerging market | | short to medium term. Yet no company can | investing strategy in 2021 into two distinct | products, both in fixed income and equity. | | stand still, and there are three key growth areas in | channels – sustainable investing and | | Jupiter Fund Management plc | Annual Report and Accounts 2021 11 ### STRATEGIC REPORT CHIEF EXECUTIVE OFFICER’S REVIEW continued Global consultants, who are key to unlocking this ## “ In 2021, Jupiter became a signatory to the market for us, are beginning to recognise the strength of our franchises. We now have 15 ## consultant ‘buy’ ratings across nine strategies – IIGCC Net Zero Asset Managers initiative this has more than doubled over the last ## 12 months. committing us to achieving net zero To support our push into this market, we have ## emissions by 2050 across our full range developed our support and operational platform. Institutional clients, and increasingly our existing ## of investments and operations.” 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. | competing needs of work and family. For a | powerful video for Pride Month that was one of | | --- | --- | --- | | | second year running, Jupiter offered a £1,000 | the Company’s most widely viewed and shared | | A growing overseas presence | contribution for home office improvements to | posts on social media. The end of the year also | | When I first joined Jupiter, I stated that | ensure our people were able to work in optimal | saw the successful launch of the Jupiter Gravity | | reinforcing our market-leading position in UK | conditions. | Network, a group aimed at raising awareness of | | retail had to be a priority after several years of | | cultural and ethnicity challenges and closing the | On the reopening of our London headquarters, focusing on expanding our international presence. gaps that have traditionally been barriers to employees returned to an office that had been The successful acquisition and integration of advancement. redesigned with new collaborative spaces, Merian has fulfilled this objective, allowing us to blending both the formal and informal to help On a personal level, I signed up to a reverse widen our perspectives and take a fresh look at rebuild relationships and foster communication. mentoring programme set up by our global footprint. At the end of December, The reopening was also an opportunity to Investment20/20 and #TalkaboutBlack, part of 29% of our AUM came from clients based outside celebrate our people, and we did so with a series the Diversity Project. It was a wonderful the UK. of ‘welcome back’ events that were very well opportunity to get a better understanding from a In 2020, Jupiter established its first presence in received. senior black professional of the challenges black the US, opening an office in Denver initially to men and women face when trying to develop Despite these measures, and perhaps support our colleagues at NZS Capital. In the last and progress into senior roles. More broadly, in unsurprisingly after the last two turbulent years, 12 months, we have expanded the team there and 2021, we set all our Executive Directors and the latest employee engagement survey recorded opened an investment office in New York Executive Committee members clear Diversity a drop in the engagement score from the focusing on US credit. The institutional market is and Inclusion (D&I) goals, and our efforts in this previous year. Our people continued to tell us our sales focus in this region, and as our product space will continue as the Company seeks to they cared deeply about the future of the set and pipeline grows, we expect North America draw inspiration and strength from the vibrant, Company and appreciated the efforts the firm to make a more significant contribution to the diverse society in which it operates. More details had taken to support them during the pandemic, group going forward, with £1.2bn of client assets on this can be found from page 36. but they wanted to see greater visibility around in the region today. the direction and future of the firm. The We also announced this year the retirement of We have taken steps to establish a foothold in Executive Committee will be working hard to our Chief Investment Officer, Stephen Pearson. Australia, where we are targeting the institutional address this in 2022. Stephen has been at Jupiter for over 20 years and market. We have already started to work with in the fund management business for over 35. His As a firm, when we look to bring in talent, we our first client and are in the process of adding contribution to the business cannot be believe that businesses with a diverse workforce on-the-ground resource. overstated and I would like to thank him for his and an inclusive culture are more sustainable. This strong leadership, relentless commitment to Finally, we continue to explore our growing is an approach I have championed for many years, clients and clear vision, which have led to a relationship with Ping An, a Chinese financial having co-founded Investment20/20 with our transformational change in our investment services company, which we inherited through Chairman, Nichola Pease. Investment20/20 is an capabilities. Merian. In 2021, Ping An began managing our initiative aimed at bringing more diverse talent China Equity fund, offering invaluable on-the- into all aspects of investment management. Positioned for future growth ground expertise and insight into Chinese Under the scheme, Jupiter this year chose to It was a year of challenge and achievement in companies. We will continue to work with our nearly triple the number of entry level equal measure as we continued to build the strategic partner, as we look to develop our opportunities for school leavers and graduates, foundations of our future prosperity. As we presence in the Chinese market. recognising both that the last 12 months have move into 2022, we will maintain our strategy of been more challenging for young people to gain a People investing for growth, focusing our efforts in those foothold in the workplace and also the value that areas where we can best serve our clients. We could not have made the progress we did in they can bring to Jupiter. 2021 without the commitment, resilience and The significant change the business has Diversity only works when it goes hand in hand hard work of our people. I would like to thank undergone over the last two years is beginning to with inclusion. Jupiter’s Executive Committee has them for all their efforts over the last 12 months pay off, and I am optimistic we will see an been a strong supporter of the Company’s in what was another challenging year. acceleration in the pace of delivery in 2022. I look employee networks, believing they can provide forward to working with my colleagues to The health and wellbeing of our people remained invaluable insight on helping create a workplace achieve our objectives and deliver on our future our top priority as the pandemic continued to where people from under-represented success. disrupt our lives. We introduced a new flexible backgrounds can feel comfortable and thrive. In working model to better accommodate the 2021, the Jupiter Pride Network created a Andrew Formica Chief Executive Officer 12 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## 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. | 1. GROWTH | 2. AN INCREASED | 3. A MOVE | 4. EVOLVING | | --- | --- | --- | --- | | IN PASSIVE | FOCUS ON | TO A MORE | REGULATORY AND | | PRODUCTS | SUSTAINABILITY | GLOBAL FOCUS | RISK LANDSCAPE | | Context: | Context: | Context: | Context: | | As clients become more sensitive | Over recent years, there has been | We have seen an industry-wide | As we move through the global | | to fees and seek more stable | a significant shift as clients are | shift over recent years, in which | pandemic, regulators across the | | returns, they are increasingly | increasingly focused not just | clients have looked to invest in | globe have evolved their | | moving part of their portfolios into | on the financial returns of their | products with broader investment | approach. Traditional risk | | passive investments and away from | investments, but also on the | universes. Clients are increasingly | management and business | | active products. In 2021, two thirds | impact of these investments on | investing in more globally-focused | continuity have evolved to focus | | of flows from UK clients went into | people and on the planet. Across | products and away from those | on systemic risk. Regulators are | | passive products and now account | the asset management industry, | with a more regional or single- | also focused on stewardship, | | for just under 20% of the total | clients are investing in products | country scope. | seeking to bring clarity and | 1 AUM across the industry. that build environmental, social authenticity to an area which has and governance factors into Jupiter’s response: not historically always used Jupiter’s response: their investment processes. consistent taxonomy and Over recent years, we have We are aware that, for some of actively broadened our product labelling. Jupiter’s response: our clients, passive products may range into more globally-focused Jupiter’s response: form part of their portfolio. But Sustainability is at the core of what products. as a high-conviction, truly active we do at Jupiter and is embedded Jupiter works closely with our The global growth strategies of asset manager, our product range throughout our culture. All our regulators to ensure that we NZS Capital have performed provides a complementary offering. fund managers are required to have a strong, well-capitalised exceptionally well since the start We construct concentrated, high consider ESG risks as part of their business. We have a robust risk of the strategic partnership with active share, benchmark-agnostic investment processes and ESG framework that ensures our risks Jupiter in early 2020. Strong portfolios to deliver returns for our objectives are part of our are managed in way which helps investment performance has clients in all market environments. Executive Committee’s and Jupiter achieve its strategic goals, supported net inflows in 2021 of | | investment professionals’ appraisal | | while keeping our business and | | --- | --- | --- | --- | | Delivering value is key to our | | over £300m. AUM for this | | | | process. | | clients safe. More on our | | ongoing success. After all fees, | | capability now stands at over £1bn. | | approach to risk management | 58% of our mutual fund assets | We believe that companies that | | | | --- | --- | --- | --- | | | | Global Sustainable Equities, one | can be found on page 60. | | outperformed their peer group | are managed in a sustainable way | | | of our flagship sustainable over three years, with 37% in the will outperform over time, driving The most notable new piece of products, also generated inflows in top quartile. better outcomes for our clients regulation around stewardship 2021 of £200m. We have launched and ultimately all of our is the SFDR, which applies to new vehicles for each of these > More on our investment stakeholders. As an active manager, products domiciled in the EU and strategies this year to make them performance can be found we engage with the companies in defines products as those with available to a wider range of on page 30. which we invest, including over ESG factors integrated or clients. We also actively engage with our 700 engagements on ESG issues promoted, or with clearly this year. Away from equities, we also have defined sustainable outcomes. investee companies, believing a significant and market-leading Jupiter’s approach has been one better run companies perform We also have a range of products range of global unconstrained of authenticity. Rather than better. Whereas passive products which are explicitly focused on fixed income products. Dynamic adjusting existing products’ are obliged to hold all of the sustainable investing and and Strategic Bond collectively processes or objectives, where stocks within their benchmark, we environmental solutions. This have AUM of almost £13bn. In early necessary we generally prefer to are highly selective in our investee includes Global Sustainable 2022, we also launched the Global launch new, ESG-focused companies and have the resources Equities, our Ecology range, and Ecology Bond fund. vehicles for existing strategies, and commitment to actively the newly launched Ecology Bond engage with them across business such as with Dynamic Bond ESG. and Dynamic Bond ESG funds. > More on our product range and ESG issues. can be found on page 32. > More details on our approach > More on our approach to > More on our stewardship to SFDR can be found sustainable investing can be approach can be found on page 49. found on page 40. on page 40. 1. Data from the Investment Association, includes UK-based clients investing in UK and overseas domiciled funds Jupiter Fund Management plc | Annual Report and Accounts 2021 13 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 Gross sales (£bn) ![img-0.jpeg](img-0.jpeg) 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 11. ### 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 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 £5.1bn of COVID-19 in form institutional clients ![img-1.jpeg](img-1.jpeg) 14 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## “As an independent ## business, we are well ## positioned to respond ## quickly and effectively ## FORWARD ## as circumstances ## change.” ## SEEING TOMORROW’S directors who are solely focused on ESG ## TRENDS TODAY IS allocated to key strategies. We have set a clear ## path towards achieving our net zero targets, for THE VALUE OF ACTIVE MINDS both our portfolio constituents and our business. And we have continued to develop our range of dedicated investment funds focused on reflect the world in which we operate, as well as on doing this as well as we possibly can, while sustainable investing and environmental solutions. attracting and retaining talent and drawing on a looking after our people and our planet, we really We have also worked hard to meet the broad range of experience to build a successful, are serving the best interests of our valued and developing regulatory frameworks, some of sustainable future. diverse clients across our international markets. which came into place at the start of 2022. For more on our approach to sustainability, please While continuing to build on the strong see page 40. foundations we have established for the business ## “Asset management has to flourish in the future, it is also important to Technological advances ## reflect on an aspect of Jupiter’s identity that has a crucial part to play The trend for technological solutions shows no remained constant, namely its purpose. Jupiter ## has always been committed to the belief that through the allocation sign of abating and this has been a year for huge advancements in a broad range of sectors. Jupiter client outcomes are improved through a dynamic, ## of capital to sustainable recognised the potential for data science to collaborative, and consistent approach to active deliver improved outcomes for clients and we fund management. We believe that by focusing ## businesses.” have grown our data science team over recent years both in size and scope. Today its targeted AUM by client domicile (£bn) 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, 70 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 60 valuable as clients have moved their focus towards ESG. Generational change 50 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 40 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 30 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 20 2018 2019 2020 2021 connection, the glue with which we can build our culture. By being a part of this, we can better UK EMEA Asia Rest of World ## THINKING Jupiter Fund Management plc | Annual Report and Accounts 2021 15 ### STRATEGIC REPORT ## OUR STRATEGIC PRIORITIES ## We aim to meet the following goals by 2024 by successfully delivering ## on our strategic priorities and achieving our core objectives. ## OUR GOALS WHY IT’S IMPORTANT LINK TO KPIs Investment performance is the lead indicator ## WE WILL DELIVER Investment performance for our continued success and demonstrates ## SUPERIOR INVESTMENT our competitive advantage in delivering investment excellence to clients. ## PERFORMANCE AFTER ## FEES, ACROSS OUR ## STRATEGIES Diversification of assets by client and product ## WE WILL BUILD OUT Net flows lowers the unsystematic risk we face and leads ## OUR CLIENT REACH, to a less volatile shareholder return. ## OUR INVESTMENT ## CAPABILITIES AND OUR ## CLIENT CHANNELS Net flows are a lagging indicator of investment ## WE WILL ACHIEVE Net flows success, reflecting our ability to deliver ## TOP‑QUARTILE NET investment performance that attracts client funds, and to grow. ## NEW MONEY GROWTH Delivery of our goals will drive profitability, 1 ## AS A RESULT, WE WILL Net management fees generating value for shareholders. ### Underlying earnings ## SIGNIFICANTLY INCREASE 1 ### per share ## OUR CLIENT ASSETS AND ### Dividends ## PROFITABILITY 1. More details on the Group’s use of APMs can be found on page 181. 16 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## OUR PROGRESS IN 2021 ## OUR STRATEGIC PRIORITIES AND PROGRESS IN 2021 | Sustainability | Institutional | International | | --- | --- | --- | | • Launched new vehicles and products for ESG | • Key new hires including heads of institutional | • £17.5bn of AUM from clients based outside | | and Sustainability-focused strategies including | in the UK and Asia Pacific | the UK | | a Luxembourg-domiciled SICAV for Global | • Invested for growth with additional resource | • 60% growth in overseas AUM over the last | | Sustainable Equities, the Global Ecology Bond | in the US, in client service and RFP teams | three years, with net positive flows of £200m | | fund and Dynamic Bond ESG | | in 2021 | • Developed strong relationships with global • Invested for growth with newly appointed consultants – ‘buy’ ratings have increased to 15 • Investments made in key growth markets: ESG investment directors, broader resource in ratings across nine strategies • Key new distribution hires in the US and the stewardship team and a newly created opened a credit analyst office in New York Head of Sustainability role • Establishing presence in Australian • Over £1bn of AUM in sustainability-labelled institutional market products • Continued to explore relationship with Ping • Set interim targets for net zero for both An in China portfolio and corporate emissions Investment offering Talent and culture Develop and deliver the best Attract, develop and retain investment offering to meet the high-quality and diverse talent ## 43 needs of our current and future aligned to a results-driven and clients inclusive culture ## Client relationships OUR Operating model ## Build deep, long-term client CORE Enhance the operating model and relationships based on trust, and develop governance, risk and ## 2 | | OBJECTIVES | | 5 | | --- | --- | --- | --- | | consistently deliver an excellent | | control processes that are | | | client experience | | purposeful, efficient, flexible and | | scalable | | Investment performance | Financial resources | | | --- | --- | --- | --- | | | Consistently deliver strong | Deploy financial resources with | | | | investment performance and | discipline to support growth and | | | 1 | | | 6 | | | outcomes for clients in a responsible | deliver consistent total returns to | | | | and sustainable manner | shareholders | | Jupiter Fund Management plc | Annual Report and Accounts 2021 17 ### STRATEGIC REPORT STRATEGIC REPORT ## OUR KEY PERFORMANCE ## INDICATORS ## How we performed in 2021. Our key performance ## indicators (KPIs) enable us to monitor our progress. 1 ## FINANCIAL KPIs NON‑FINANCIAL KPIs Net management fees (£m) Underlying earnings per share (p) Dividends (p) Investment performance (%) Net flows (£bn) Fees earned from managing our funds, net of Underlying profit after tax divided by issued Ordinary and special dividends paid Percentage of our mutual fund AUM above the Net flows are the gross inflows to our funds less payments to our distribution partners. share capital. to shareholders in relation to the year. median over three years. redemptions from our funds during the year. ## £453.7m 31.7p 17.1p 58% £(3.8)bn 453.7 34.2 32.4 15.5 31.7 392.4 395.7 384.0 370.0 28.8 28.7 11.4 3.0 17.1 17.1 17.1 17.1 17.1 17 18 19 20 21 Ordinary Special | Net management fees increased 18% to £453.7m. | Underlying EPS increased by 3.0p in | The total ordinary dividend for the year was | Investment performance remained robust | Despite another year of record gross flows of | | --- | --- | --- | --- | --- | | Average AUM increased by 25% to £59.7bn while | 2021 to 31.7p. | unchanged from 2020 at 17.1p, representing a | in 2021 with 58% of mutual fund AUM | £16.5bn, we saw total net outflows of £3.8bn | | net management revenue margins declined by 3 | | total underlying pay-out ratio of 54%. | outperforming their peer group over a | (2020: net outflows of £4.0bn). | Although underlying profit before tax increased basis points (bps) to 76bps, both as a result of three-year period (2019: 70%), with 37% in the | | by 21% to £216.7m, the increase in EPS was | | | Redemptions were primarily from areas where | | --- | --- | --- | --- | --- | | the full-year impact of the Merian acquisition. | | Why this is important | top quartile. | | | | diluted by the full-year impact of shares issued | | | retail client demand was muted, such as UK and | Demonstrates our ability to pay a progressive In addition, we generated £113.0m of gross as part of the Merian acquisition. The decline from the prior year was due to two European equities, or where there were specific dividend and return any surplus capital to performance fees (2020: £73.6m). funds which marginally moved into the third performance concerns. Why this is important shareholders, where it is in excess of our needs. quartile at the very end of December 2021. We generated net inflows into key growth areas Why this is important Measures the overall effectiveness of our | | | Over one year, 80% of AUM outperformed | such as Global Sustainable Equities, NZS Capital’s | | --- | --- | --- | --- | | Net management fees are the largest | business model and drives both our dividend | | | | | | and over five years the figure was 68%. | global equity strategies and a number of recently | | 43 5.5 component of our revenue and demonstrate our | policy and the value generated for shareholders. | | | launched products. 33 ability to earn attractive fees by designing and Why this is important 34 successfully distributing products that deliver 28 Why this is important Investment performance is the lead value to clients. indicator for our continued success and Net flows are a lagging indicator of investment 21 demonstrates our competitive advantage in success, reflecting our ability to deliver delivering investment excellence for clients. investment performance that attracts client 44 42 funds, and to grow our distribution. 38 38 37 (4.6) (4.5) (4.0) (3.8) 1. More details on the Group’s use of APMs can be found on page 181. 17 18 19 20 21 18 Jupiter Fund Management plc | Annual Report and Accounts 2021 1st quartile 2nd quartile 17 17 17 18 18 18 19 20 19 20 19 20 21 21 21 1 ## FINANCIAL KPIs NON‑FINANCIAL KPIs OTHER KEY METRICS Net management fees (£m) Underlying earnings per share (p) Dividends (p) Investment performance (%) Net flows (£bn) Assets under management (£bn) Fees earned from managing our funds, net of Underlying profit after tax divided by issued Ordinary and special dividends paid Percentage of our mutual fund AUM above the Net flows are the gross inflows to our funds less payments to our distribution partners. share capital. to shareholders in relation to the year. median over three years. redemptions from our funds during the year. ## £60.5bn 17 50 ## £453.7m 31.7p 17.1p 58% £(3.8)bn 18 43 19 43 59 5.5 21 61 43 33 34 28 Total shareholder return (change in share price plus dividends paid) (%) 21 44 (4.6) (4.5) (4.0) (3.8) 42 ## 38 38 (2)% 37 | | | | | 17 | | 49 | | --- | --- | --- | --- | --- | --- | --- | | | | | | 18 | (48) | | | | | | | 19 | | 48 | | 17 | 18 | 19 20 | 21 | | | | (27) 1st quartile 2nd quartile | | | | | | 21 | (2) | | --- | --- | --- | --- | --- | --- | --- | | Net management fees increased 18% to £453.7m. | Underlying EPS increased by 3.0p in | The total ordinary dividend for the year was | Investment performance remained robust | Despite another year of record gross flows of | | | | Average AUM increased by 25% to £59.7bn while | 2021 to 31.7p. | unchanged from 2020 at 17.1p, representing a | in 2021 with 58% of mutual fund AUM | £16.5bn, we saw total net outflows of £3.8bn | | | | net management revenue margins declined by 3 | | total underlying pay-out ratio of 54%. | outperforming their peer group over a | (2020: net outflows of £4.0bn). | | | Although underlying profit before tax increased | basis points (bps) to 76bps, both as a result of | | | three-year period (2019: 70%), with 37% in the | | | | --- | --- | --- | --- | --- | --- | | | by 21% to £216.7m, the increase in EPS was | | | Redemptions were primarily from areas where | Surplus capital over regulatory | | the full-year impact of the Merian acquisition. | | Why this is important | top quartile. | | | 1 diluted by the full-year impact of shares issued retail client demand was muted, such as UK and requirements (£m) Demonstrates our ability to pay a progressive In addition, we generated £113.0m of gross as part of the Merian acquisition. The decline from the prior year was due to two European equities, or where there were specific dividend and return any surplus capital to performance fees (2020: £73.6m). funds which marginally moved into the third performance concerns. Why this is important shareholders, where it is in excess of our needs. quartile at the very end of December 2021. ## We generated net inflows into key growth areas £117m Why this is important Measures the overall effectiveness of our Over one year, 80% of AUM outperformed such as Global Sustainable Equities, NZS Capital’s 15.5 Net management fees are the largest business model and drives both our dividend and over five years the figure was 68%. global equity strategies and a number of recently 17 91 453.7 component of our revenue and demonstrate our policy and the value generated for shareholders. 34.2 11.4 launched products. 32.4 | ability to earn attractive fees by designing and | | | | | | | 31.7 | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | | Why this is important | | 18 | 118 | | | | 392.4 | 395.7 | | | | | | | | | | | | successfully distributing products that deliver | | | | 384.0 | | | | | Why this is important | | | | | | | | 370.0 | | 28.8 | 28.7 | | Investment performance is the lead | | | | | | value to clients. | | | | | | | | | | 19 | | 146 | | | | | | | | | | indicator for our continued success and | Net flows are a lagging indicator of investment | | | | 3.0 | | | demonstrates our competitive advantage in | success, reflecting our ability to deliver | | 111 | | --- | --- | --- | --- | --- | --- | | 17.1 | 17.1 17.1 17.1 17.1 | delivering investment excellence for clients. | investment performance that attracts client | | | | | | | | 21 | 117 | funds, and to grow our distribution. 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. | | | | | 20 20 20 | | | | --- | --- | --- | --- | --- | --- | --- | | 17 | 18 | 19 20 | 21 | | | | | | | | | | Jupiter Fund Management plc \| Annual Report and Accounts 2021 | 19 | Ordinary Special 17 18 19 20 21 17 18 19 20 21 17 18 19 20 21 ### STRATEGIC REPORT ## CHIEF FINANCIAL ## OFFICER’S REVIEW ## 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 I am pleased to report strong progress in our 28.7p), as the increase in profitability was partially our business. Making these changes was an financial results for 2021, which included the first offset by the impact of higher levels of share important step towards ensuring the business is full-year contribution from the acquisition of capital in 2021 due to the issuance of shares in July well positioned to pivot to growth. Merian. Despite net outflows, positive investment 2020 as part of the Merian acquisition. Basic Our resources have also been focused on performance and the impact of Merian resulted statutory earnings per share increased by 30% to ensuring we attract, retain and develop talent. At in a 25% increase in our average AUM and an 18% 27.6p (2020: 21.3p). Jupiter, we pride ourselves on diversity and increase in management fees. | | 2021 has been another year of uncertainty and | inclusion and our cultural pillars help drive the | | --- | --- | --- | | We have also recognised cost savings through | disruption caused by the Covid-19 pandemic. | ability of our people, both individually and | | reorganising the business, and synergies that are | Although we are seeing early signs of a more | collectively, to be able to put our clients first. We | | enabling us to invest for growth. | stable environment, we are not yet in a post- | have undergone significant change in the past | | | Covid world. Undoubtedly, the experiences of | two years and, combined with the disruption of | We generated significant performance fees this the last two years will result in far-reaching Covid-19, our focus has remained on providing an year and there were continued exceptional costs changes – from the type of products our clients attractive environment for our people in which through the Merian acquisition. We have wish to invest in, to the flexibility of the working they can thrive and deliver value for our clients. provided additional disclosures to better environment we provide for our people. We This year we introduced our leading flexible illustrate the drivers and trends in our financial remain focused on ensuring that Jupiter is agile working arrangements, which balance the performance, and address the industry and and that our client-centric approach continues to benefits of collective office-based work with Jupiter-specific headwinds. These include deliver strong investment performance in added flexibility in remote working options. As separate presentation of the contribution from products that are relevant to our clients’ changing we welcomed our people back to the office this performance fee profits, which are shown over needs. year, many for the first time, we launched our the page. new office environment, focused around working Against this backdrop, we made significant Overall, profit before tax and exceptional items collaboratively. progress towards delivering on our strategic increased 21% to £216.7m (2020: £179.0m). goals, reinforced our strong foundations and As set out in the Chief Executive Officer’s review Statutory profit before tax rose 39% to £183.7m invested in areas that are important for the on page 10, from an investment capability and (2020: £132.6m) after the deduction of exceptional delivery of long-term growth. Last year, we distribution channel perspective, we have items of £33.0m (2020: £46.4m). Underlying announced the restructuring of various parts of invested resources into areas such as earnings per share was up 10% at 31.7p (2020: 20 Jupiter Fund Management plc | Annual Report and Accounts 2021 | sustainability, the institutional channel and our | From a regional perspective, we remain focused | Although 2021 has been another challenging year | | --- | --- | --- | | international footprint, building on some of the | on our UK market while also developing clear | from a net flows perspective, we continue to | | foundations that we have made in the past. We | opportunities for the Group internationally. In | have strong client demand. We have worked hard | | are already seeing strong signs that these can | the US, we are building on our strategic | towards returning the Group to a net inflow | | meaningfully contribute growth for the Group. | partnership with NZS Capital and have enhanced | position and see strong signs from our growth | | Nevertheless, in 2021 we continued to be | our institutional client capabilities in Denver, as | areas. | | impacted by net outflows in some of our | well as introducing an office in New York, | | Against this backdrop, we delivered good established capabilities and, as a result, we have focused on fixed income analysis. We also see financial results, demonstrating the benefit of the not yet moved to sustained growth in our net opportunities across other international regions Merian acquisition and again bolstered by flows. Some of those established capabilities are and we are establishing an on-the-ground exceptional levels of performance fees earned being impacted by current investor trends. presence in Australia. Our focus on growing our this year. institutional business requires investment in the Sustainability has been an area where there has short term, with interesting client opportunities Our focus in 2021 has been on ensuring we are been an acceleration in interest recently. Jupiter already starting to emerge. committing capital in the right areas to deliver on has always been highly active in this space, and our strategic goals. This investment is principally our policy of active engagement has meant that We continue to make investments in each of through our income statement, with no current ESG has been an important part of our these areas as we see the opportunity for them balance sheet demands. We have retained a investment philosophy. Our focus on to drive growth in the future. robust capital position following the sustainability and social matters has developed Our 2021 AUM ended the year at £60.5bn, a £1.8bn implementation of the new Investment Firms over this time and we are well placed as investor increase on the prior year despite £3.8bn of net Prudential Regime (IFPR) in 2022. We will embed demand has grown. In 2021, we reaffirmed our outflows. This is a record level of year-end AUM this process and consider additional returns of commitment to sustainability and concentrated for Jupiter, driven by strong investment capital at the end of 2022, in line with our efforts in this area in terms of both our offering performance. Our AUM, from segregated commitment to return capital to shareholders and recruitment of talent. At an investment mandates and a broader institutional client base when it is not required in the business. strategy level, we now hold more than £1bn of is largely unchanged over that period but we AUM in sustainable funds, and we saw net flows We continue to face headwinds in a number of have a strong pipeline of well-progressed client in the year of around £200m. With SFDR coming areas and it is important that we direct our demand that is expected to deliver growth. into force for EU-domiciled funds, we have resources to areas that will address these and launched new sustainability products early in support long-term growth. 2022. 2021 2020 | | | Before | | | | | | Before | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | exceptional | | | | | | exceptional | | | | | | | | items and net | | Performance | | | | items and net | | | Performance | | | | performance fees | | | fee profits | | Total | performance fees | | | | fee profits | 1 | Total | | | | £m | | £m | £m | | | | £m | | £m | £m | 1 Net revenue 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) 2 Administrative expenses (278.0) (60.9) (338.9) (237.4) (27.7) (265.1) Other (losses) /gains (4.4) – (4.4) 3.3 – 3.3 3 Amortisation of intangible assets (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) Jupiter Fund Management plc | Annual Report and Accounts 2021 21 ### STRATEGIC REPORT CHIEF FINANCIAL OFFICER’S REVIEW continued | Movement in AUM by product (£bn) | | Net revenue increased by £110.8m to £568.6m. | | --- | --- | --- | | | 31 Dec 2020 Net flows Market returns 31 Dec 2021 | The majority of the increase in net revenue came | | Mutual funds 49.9 (3.1) 4.1 50.9 | | through net management fees, which increased | by £69.7m to £453.7m. This was driven by higher Segregated mandates 7.9 (0.8) 1.3 8.4 average AUM, which increased by £11.9bn to Investment trusts 0.9 0.1 0.2 1.2 £59.7bn, reflecting a full year of AUM acquired 58.7 (3.8) 5.6 60.5 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 Assets under management (AUM) The Chrysalis Investment Trust grew to £1.4bn of lower net management fee margins. AUM, following capital raises in March and AUM increased by 3% to end the year at £60.5bn Our average net management fee margin reduced December 2021 and strong investment (2020: £58.7bn). Average AUM was £59.7bn, an from 79bps in 2020 to 76bps for 2021. This performance. Elsewhere, the Gold & Silver fund increase of 25% on 2020, driven by the inclusion reduction was largely due to the full-year impact generated almost £0.3bn of net inflows and the of a full year of AUM acquired through Merian on of the acquisition of the lower-margin Merian Strategic Absolute Return Bond saw clients invest 1 July 2020. business, as well as other changes in business mix net new business of over £130m. We maintained gross flows at record levels of towards products and client mandates earning £16.5bn, but a combination of continued Net revenue lower fee rates. consumer preference for growth strategies and Financial markets generally improved in the year, In 2021 we earned substantial gross performance muted demand for equities, particularly in the UK but demand for financial investments was spread fees, increasing from £73.6m in 2020 to £113.0m. and continental Europe, resulted in these flows unevenly between products, with investors We have the potential to generate performance being more than offset by redemptions, with understandably favouring defensive stocks and fees from nine funds, along with a number of total net outflows in the year of £3.8bn (2020: net safe harbours for their savings. segregated mandates. outflows of £4.0bn). However, strong investment Revenue in the year was £617.8m (2020: £500.5m), In 2020, performance fees were principally earned performance in rising markets enabled the Group with net revenues of £568.6m (2020: £457.8m), of from four fund mandates as well as one and investors to benefit from market returns in which performance fees contributed £113.0m segregated account. In 2021, these performance excess of these flows at £5.6bn. (2020: £73.6m). fees were mainly generated through the Chrysalis Client redemptions predominantly came from Net revenue (£m) 2021 2020 Investment Trust, along with a number of small those strategies which are in areas of weaker Net management fees 453.7 384.0 fees from other funds. The Chrysalis performance client demand. These included UK equities, which fee reflects the strong investment performance Net initial charges 1.9 0.2 saw £1.6bn of net outflows, and European 1 generated in the financial results to 30 September Performance fees 113.0 73.6 Growth, which saw £0.9bn of net outflows. The 2021. Following the receipt of this performance Merlin range continued to see outflows of £0.6bn Net revenue 568.6 457.8 fee, we have agreed to discuss potential fee and the Systematic range saw £1.3bn of net Reclassified revenue – (10.0) structures for this investment trust which are redemptions, predominantly from the North Adjusted net revenue 568.6 447.8 expected to be announced later in 2022. American fund. Revenue 617.8 500.5 More positively, a number of our recently 1. Includes performance fees of £10.0m in 2020 that have launched products have continued to grow and been used to reduce an exceptional cost (see APMs on generate net inflows. Global Sustainable Equities pages 181 to 183) 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. 22 Jupiter Fund Management plc | Annual Report and Accounts 2021 | Administrative expenses | Costs by category (£m) 2021 2020 | | | We continue to pursue a disciplined approach to | | --- | --- | --- | --- | --- | | | | 1 | | cost management which enables us to allocate | | Despite some headwinds during the year, we | Fixed staff costs | | 73.0 76.1 | | resources effectively whilst managing ongoing remained focused on cost control, alongside Variable staff costs 79.1 58.1 cost headwinds. targeted investment. We implemented changes before performance 1 | to our operating model, restructuring to position | fee-related costs | | | Fixed staff costs before exceptional items | | --- | --- | --- | --- | --- | | resources in areas of growth. This resulted in | | 1 | | decreased by £3.1m as a result of restructuring | | | Other expenses | | 125.9 103.2 | | | some changes in how we operate and allocate | | | | programmes to remove duplicated roles after the | | | Administrative | | 278.0 237.4 | | | resources, unfortunately including some | | | | Merian acquisition, and to reposition the Group | expenses before redundancies within the Group. by concentrating investment in areas of growth. performance 1 We ended the year with 579 heads operating in We also concentrated on ensuring we have an fee-related costs the business, and a further six heads within our attractive incentive package and a balanced Performance fee 60.9 27.7 strategic partnership with NZS Capital. Average allocation between fixed and variable pay. As the related variable staff headcount for the Group in 2021 decreased from variability of the significant performance fees we costs 593 to 584. earned in 2020 and 2021 can distort the Administrative 338.9 265.1 underlying trend, we have reported these 1 In 2021 we continued to support the expenses separately in the tables that follow. Investment20/20 programme, increasing our Exceptional items 14.2 47.0 cohort to 17 heads. Following our focused review We have maintained our focus on managing the Administrative 353.1 312.1 of strategic priorities, we targeted headcount efficiency of our operating model, undertaking a expenses increases into areas of growth, notably in project during the year to streamline our service Total compensation 33% 35% sustainability, institutional and our international | providers following the increase in suppliers that | ratio before | | | | --- | --- | --- | --- | | | | 1 | business. This has increased our costs in 2021, as | | came with the Merian acquisition. | performance fees | | | we reinvested the savings identified above. Total compensation 37% 35% Going forward, investment for growth and 1 Targeted headcount increases, and ensuring our ratio operational agility will continue to be at the reward packages are competitive and support the centre of our approach to cost management, as Operating 38% 39% retention of existing talent, have resulted in some | well as ensuring we attract and retain talented | margin before | | | | | --- | --- | --- | --- | --- | | | | 1 | | variable staff cost increases. The proportion of | | people and have a robust control environment. | performance fees | | | | | | | 1 | | fixed to variable compensation has moved back | | | Operating margin | | 39% 41% | | In 2021, as in the previous year, we have to our historic trend of a greater weighting separately presented certain items as exceptional. 1. Stated before exceptional items (see APMs on pages 181 towards annual performance-related awards. These principally comprise costs relating to the to 183). Merian acquisition that are required to be spread Before performance fee-related variable staff Variable staff costs (£m) 2021 2020 | over multiple years and which are therefore a | costs and exceptional items, administrative | | | | --- | --- | --- | --- | | continuation of certain exceptional items we | expenses were £278.0m (2020: £237.4m), 17% | Variable staff | 79.1 58.1 | | disclosed last year. In 2021, such costs comprise | higher than in 2020. A significant part of this | costs before | | | amortisation of intangible assets and accounting | increase relates to the first full year of costs | performance fee | | | charges relating to the timing of expense | relating to the Merian business, which we | related costs and | | 1 | recognition for deferred compensation awards | acquired on 1 July 2020. We have delivered | exceptional items | | | --- | --- | --- | --- | | linked to the acquisition and the restructuring | savings through integration and restructuring and | Performance fee | 60.9 27.7 | | referred to above. | have used these savings to make investments in | related variable staff | | | | areas where we see the potential for growth. | costs | | | | | Variable staff | 140.0 85.8 | cost before exceptional items 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). Jupiter Fund Management plc | Annual Report and Accounts 2021 23 ### STRATEGIC REPORT CHIEF FINANCIAL OFFICER’S REVIEW continued Variable staff costs before performance The Group’s total compensation ratio before Exceptional items fee-related costs and exceptional items increased performance fees and exceptional items Exceptional items are items of income or from £58.1m to £79.1m. The increase was mainly decreased from 35% to 33%, reflecting the expenditure that are significant in size and which due to a full-year of costs relating to the efficiency savings arising as a result of the are not expected to repeat over the short to investment teams that joined us with the Merian completion of the Merian integration, partially medium term. Such items have been separately acquisition. In addition, variable staff costs have offset by cost headwinds and investment presented to enable a better understanding of increased as we align employees’ variable expenditure. The Group’s total compensation the Group’s financial performance. Where compensation with the financial performance of ratio increased from 35% to 37%. This reflected appropriate, such items may be recognised over the Group, which we assess before performance both the deferred costs of prior year multiple accounting periods. In 2021, exceptional fees and variable staff costs. performance fees and the current year costs of items were £33.0m (2020: £46.4m) and were performance fees earned in 2021. Charges for A proportion of our variable compensation mainly accounting charges arising from the deferred variable staff costs are required to be comprises deferred bonuses in the form of acquisition of Merian that, due to their nature, spread over the relevant vesting period. | share-based and fund-linked awards. The | | are required to be spread over more than one | | | | --- | --- | --- | --- | --- | | accounting charge for fund-linked awards is | Other expenses have increased due to a full year | financial year. The charges in 2020 were primarily | | | | linked to the fair value of the relevant funds. We | of Merian costs, but also include certain one-off | acquisition-related, including transaction and | | | | hedge such movements in the value of these | costs relating to foreign exchange and historic | integration costs and certain other costs. | | | | awards by purchasing units or shares in the | tax-related charges. Other factors contributing | | 2021 | 2020 | | | | | £m | £m | | underlying funds, although accounting timing | towards the increase in costs included | | | | | mismatches occur between the recognition of | administrative costs largely linked to AUM levels | Acquisition-related | | | | gains or losses on the units or shares and the | and expenditure on specific investments in data, | Transaction costs – 12.7 | | | | recognition of the corresponding gain or loss on | research and marketing, as we target areas that | Integration and | – 26.6 | | | the deferred variable compensation awards. In | are expected to deliver long-term growth. | related costs | | | | 2021, this mismatch, which resulted in a net | | | – 39.3 | | The Group’s operating margin decreased from increase in costs, arose principally on 41% to 39%. The 2020 operating margin benefited Amortisation of 18.8 9.4 performance fee-related awards. | | from the impact of performance fees and the | acquired intangible | | | --- | --- | --- | --- | | Other factors driving the increase in the Group’s | requirement to charge deferred bonus awards | assets | | | variable compensation were movements in | over the vesting period, with no brought-forward | Deferred | 7.7 3.7 | | Jupiter’s share price and the UK Government’s | charges. In 2021, the operating margin has been | compensation costs | | | decision to increase the UK rate of national | impacted by brought-forward charges, along with | related to the | | | insurance contributions by 1.25% from April 2022, | different cost tiering structures for the | acquisition | | | the net result of which was to increase social | current-year performance fees. | Performance fees | – (10.0) | | security costs on deferred awards. | | attributed to the | | The operating margin excluding performance fee seller’s obligation | The performance fee-related variable staff costs | profits decreased by one percentage point from | | | | --- | --- | --- | --- | | include both cash and deferred elements. The | 39% to 38%. This is largely driven by gains on | Total acquisition- | 26.5 42.4 | | charges for the deferred elements are required to | financial instruments in 2020 compared with | related | | | be spread over a number of accounting years. We | losses in 2021, which are explained further below. | Non-acquisition | | | expect that charges arising from the 2020 and | | related | | | 2021 performance fee earnings will continue to be | | Redundancy | 6.5 4.0 | | recognised until 2025. | | programme and other | | compensation costs 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 The Group incurred acquisition costs in the form Tax expense Underlying profit before tax of deferred earn out awards to certain former The effective tax rate for 2021 was 18.6% (2020: Merian shareholders. These are required to be 20.6%), marginally below the headline UK treated as compensation costs as they include corporation tax rate of 19.0% (2020: 19.0%). The employment criteria and are charged over a ## difference is due to net tax credits relating to £216.7m three-year period. Vesting of these awards is future tax deductions on deferred compensation contingent on meeting certain performance 2020: £179.0m and additional tax credits available in respect of conditions on 1 July 2023. prior year tax submissions. Our published tax Across both 2020 and 2021, the Group incurred strategy is available from our website at redundancy and other compensation costs, www.jupiteram.com. recognising costs of £6.5m (2020: £4.0m) as part Earnings per share (EPS) Underlying earnings per share of a targeted post-integration restructuring | programme, reviewing the structures, systems | The Group’s basic and diluted statutory EPS | | | --- | --- | --- | | and processes of the Group. Following the | measures were 27.6p and 26.9p respectively | | | completion of this programme, no further | in 2021, compared with 21.3p and 20.8p in 2020. | | | redundancy costs are expected to be reported as | | 31.7p | Underlying EPS, defined as underlying profit after exceptional costs in the foreseeable future. tax divided by the weighted average number of 2020: 28.7p shares in issue (see page 144), was up 3.0p at 31.7p Other income statement movements (2020: 28.7p). Other losses of £4.4m (2020: gains of £3.3m) Excluding performance fees, underlying EPS was principally comprised losses of £2.9m (2020: loss up 1.2p at 24.1p (2020: 22.9p). of £0.4m) on seed investments, net of hedges, Cash flow | and including dividend income, and a £1.5m loss | | 2021 2020 | | | --- | --- | --- | --- | | (2020: £3.7m gain) on a forward contract taken | Statutory profit | 183.7 132.6 | The Group generated positive operating cash | | out to hedge share-based compensation awards | before tax | | flows after tax in 2021 of £188.9m (2020: £104.6m), | | to staff. Seed investments are hedged for market | | | representing 126% (2020: 99%) of statutory profit | Exceptional items 33.0 46.4 beta risk, usually by taking a short position on a after tax. Net outflows from investing activities Performance fee (52.1) (35.9) fund’s benchmark, where it is possible to do so, 1 of £12.0m (2020: inflows of £63.9m) principally profits | and foreign exchange risk through the purchase | | | constituted net investment into seed capital. | | --- | --- | --- | --- | | | Underlying profit | 164.6 143.1 | | | of forward currency contracts. Gains and losses | | | Outflows from financing activities of £167.7m | before tax before therefore generally arise from under or (2020: £159.8m) included dividend payments of performance fee overperformance against a fund’s benchmark, as £109.8m made to shareholders and £48.5m of profits | well as the costs relating to the beta hedge. In | | | shares purchased by the Employee Benefit Trust | | --- | --- | --- | --- | | | Tax at average | (31.3) (27.2) | | | 2021 we recognised gains after hedging and | | | (EBT) to hedge deferred compensation awards | statutory rate of 19% | related costs across the majority of our seed | | | to employees in the form of Jupiter shares. | | --- | --- | --- | --- | | | Underlying profit | 133.3 115.9 | | | portfolio, offset principally by losses from a single | | | The net increase in cash in the period was £9.2m | after tax before fund. (2020: £8.7m increase). performance fee | Finance costs | profits | | Assets and liabilities | | --- | --- | --- | --- | | Finance costs of £6.8m (2020: £5.1m) have | | | The Group’s cash position at the year-end date | | increased principally as a result of the recognition | Statutory profit | 183.7 132.6 | was £197.3m (31 December 2020: £188.1m), as net | | of a full year of interest charge on the £50m | before tax | | cash receipts from trading profits were offset by | | subordinated debt issued in April 2020. | Exceptional items 33.0 46.4 | | dividend payments to shareholders and payments | | | Underlying profit | 216.7 179.0 | to the EBT. Payment of the performance fees | | Profit before tax (PBT) | | | earned in the year was made in 2022, with 54% of | before tax | Statutory PBT for the year increased by 39% to | Tax at average | (41.2) (34.0) | the Chrysalis performance fees received in | | --- | --- | --- | --- | | £183.7m (2020: £132.6m) mainly as a result of higher | statutory rate of 19% | | Chrysalis shares to match the deferred bonus | | levels of management and performance fee | | | awards and related employment taxes. | | | Underlying profit | 175.5 145.0 | | income, partially offset by a higher cost base after tax The Group’s issued debt of £50m is repayable in relating to performance fees, a full year’s worth July 2030 or, at the Group’s option, from April of post-Merian costs and net cost increases in Weighted average 553.1 505.4 2025. The revolving credit facility of £80m other areas, principally focused on areas of issued share capital provides additional access to liquidity. The growth. Excluding exceptional items and net three-year facility, which expires in April 2023, performance fees, PBT increased by 15% to was not drawn in the year. Underlying EPS 24.1p 22.9p £164.6m (2020: £143.1m). before net performance fees Underlying EPS 31.7p 28.7p 2 Basic EPS 27.6p 21.3p 1. Excludes £10m of performance fees classified as exceptional items. 2. See Note 9 to the accounts. Jupiter Fund Management plc | Annual Report and Accounts 2021 25 STRATEGIC REPORT 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: £223.3m). 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 IPPF 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 The Group defines its long-term strategic In the most recent ICAAP, approved by the Board planning objectives over five years and this is in July 2021, scenarios included: underpinned by a rolling five-year financial plan, • sustained market downturn, combined with an the first year of which is the current year budget. operational risk event and a significant loss in The further into the future the planning horizon the seed portfolio; is, the greater the level of uncertainty in the • the failure of internal policies, leading to a financial projections. Therefore, the Group uses a regulatory breach; and three-year period in assessing viability in order to • a discrimination tribunal and dismissal of a key be consistent with the minimum period used in fund manager. the Group’s Internal Capital Adequacy Assessment Process (ICAAP) and financial Primary management actions to relieve stresses projections, and because it has a sharper focus on the Group’s ability to operate during these than the full five-year rolling financial planning scenarios are reductions in variable compensation horizon. costs, reducing returns to shareholders, and disposal, where possible, of seed investments to The rolling financial plan incorporates both the provide additional liquidity. Group’s strategy and principal risks and is reviewed by the Board at least annually when the The Group also considers the correlation budget for the following year is approved. between different levels of AUM and profitability, modelling the impact of and In exceptional circumstances, the Board reviews sensitivity to market movements which directly and approves structural changes to the budget affect the value of AUM and therefore the intra-year. These formal approval processes are Group’s revenues. underpinned by regular Executive Committee and Board discussions of strategy and risks, in the We believe that the statement of viability normal course of business. continues to reflect our internal financial planning, budgeting, forecasting, review and Details of the principal risks faced by the Group, challenge processes which assess profitability, as and the strategies in place to mitigate exposure well as those through which we assess risk to them can be found in Our Approach to Risk exposures arising from the implementation of the Management, beginning on page 60. Group’s operational strategy. Throughout the year the Board assesses progress The Strategic report found on pages 1-67 has by reviewing forecasts compared to the budget been duly approved by the Board and signed on and longer-term projections compared to the its behalf by: financial plan. The current year forecast and longer-term financial projections are regularly Wayne Mepham updated as appropriate and consider the Group’s Chief Financial Officer profitability, cash flows, dividend payments, share purchases, seed investments and other key 24 February 2022 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 27 ### STRATEGIC REPORT STRATEGIC REPORT ## 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. AUM and cumulative net flows from strategies launched since 2018 (£bn) Strength in conviction Number Conviction is at the heart of our investment of newly 7 3 7 4 | culture. We have no house view when it comes | launched | | | --- | --- | --- | | to investing. Instead, we allow our talented fund | vehicles | | | managers the freedom and autonomy to form | 4.0 | 2.5 | their own opinions and follow their convictions – always supported by a dedicated central CIO 3.5 office. 2.0 3.0 2.5 1.5 2.0 1.0 1.5 1.0 0.5 ## £3.6bn 0.5 AUM from strategies 0.0 0.0 launched since 2018 | | FY18 | | FY19 FY20 | | | | FY21 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | AUM | | Strategies launched in: | | | | | | Cumulative | | (£bn) | | 2018 | | 2019 | 2020 | 2021 | net flows (£bn) | | Cumulative net flows ## “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.” 28 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## “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 | Our fund manager-led approach to stewardship | | --- | --- | | range of investment solutions on offer to our | differs by strategy and asset class, but it is always | | clients. At Jupiter we keep all of our products | centred on improving client outcomes. We | | under constant review to ensure that the whole | believe that conviction in our ideas, a focus on | | range is suitable and attractive to our clients at all | our strengths and a thorough grounding in our | | times. There are a number of reasons why | role and responsibility to the world around us will | | products might not be successful, including | result in sustainable, long-term gains for all of our | | changing market appetite. Where this is the case, | stakeholders. More on our approach to | | we take action. When we look to grow our | sustainability can be found on page 40. | 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 DECISIONS THAT SPARK standing still while the world around us changes. ## Climate change, and society’s response to it, LONG-TERM OPPORTUNITIES means that investors are increasingly focused on ## SHOW THE VALUE OF ACTIVE MINDS 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. ## CONVICTION Jupiter Fund Management plc | Annual Report and Accounts 2021 29 ### STRATEGIC REPORT ## STRATEGIC AND OPERATING REVIEW: ## INVESTMENT MANAGEMENT ## 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. We have a diverse product range, covering both A focus on sustainability Top 10 largest funds by AUM developed and emerging market equities, fixed 3-year and active engagement AUM quartile income, multi-asset and alternatives strategies. | | We believe that better run companies perform | | (£bn) | ranking | | --- | --- | --- | --- | --- | | However, we remain focused on specialist | better. As an active manager that takes | Dynamic Bond 8.4 1 | | | | strategies where we believe we can deliver | high-conviction positions in our investee | European 4.6 2 | | | | high-quality, sustainable performance to | companies, we believe that we have a key role to | | | | Strategic Bond 4.4 3 our clients, and differentiate ourselves from play in engaging with these companies and driving UK Mid Cap 3.3 1 our peers. better, sustainable outcomes for our clients. Merlin Income 2.1 1 We do not have a house view, but rather To this end, all of our fund managers are required UK Special Situations 2.0 4 empower our fund managers with a high degree to embed ESG risks and considerations into their Merlin Balanced 2.0 3 of autonomy to follow their convictions. investment processes, helping our investee Merlin Growth 1.8 2 companies improve their ESG practices. We pride ourselves on this approach and our North American Equity 1.8 3 culture which puts clients first and allows our We also have a range of products dedicated to Income Trust 1.4 4 talented fund managers the freedom and investing in those companies leading the responsibility to pursue their own, clearly defined transition to a more sustainable economy. Broad fixed investment approach and philosophy. income capabilities We have invested additional sustainability- Following the acquisition of Merian last year, focused resource across the group this year. We have continued to invest in our strong fixed which significantly improved the depth of our As well as adding new headcount within the income capabilities this year. We have investment expertise, we have been delighted stewardship team, we have also put a number of significantly diversified this area over recent years this year to welcome our new colleagues back to ESG investment directors in place, who will drive and have a broad depth of investment expertise. the office. We have worked hard on reinforcing the sustainability agenda across their product We manage around £15bn of our clients’ AUM, that strong culture after more than 18 months of ranges. across 12 strategies run by more than 30 remote working. investment professionals – ensuring that we have Early in 2021, we made a number of senior the right products for our clients regardless of Throughout the year, we have maintained our appointments within our sustainability team, the market or inflationary environment. focus on sustainable investing, with new resource ensuring that we had the correct suite of across the investment team and the launches of products to continue to offer clients a range of Through 2021, we have deepened our investment new SFDR Article 8 - and 9-compliant products. differentiated investment options with a shared expertise with the addition of credit analysts We continue to evolve our market-leading fixed goal of generating attractive returns through based in our newly-opened office in New York. income capabilities and have again invested in our long-term sustainable investing. We have reinforced the rapidly growing Strategic data insights capabilities. Absolute Return Bond fund team and Through this team restructuring, Abbie Llewellyn- repositioned our Emerging Market Debt range. Waters became Head of Sustainable Investing, | leading the firm’s sustainable investing capability. | We have also broadened our product range with | | --- | --- | | Concurrently, Rhys Petheram took on a new role | new ESG-focused funds. Global Ecology Bond is | | as Head of Environmental Solutions, analysing and | an Article 9-compliant product from our | | investing in companies that are focused on | environmental solutions team and Dynamic Bond | | providing solutions to sustainability challenges | ESG is an Article 8-compliant version of our | | across key environmental themes. | flagship global unconstrained fixed income | strategy. Both of these were launched in early More details on our stewardship activities and 2022. approach to sustainable investing can be found on page 40. 30 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## DATA-DRIVEN INSIGHTS 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. ACTIVE PERFORMANCE DRIVEN ## Performance over other time periods remained BY DATA INSIGHTS strong, with 80% delivering above median We have continued to invest this year in our data science capabilities. The performance over one year and 68% over five function was founded in late 2018 as a team of one. The team has grown to 11 years. data scientists and engineers, with more key hires to be made in 2022. The table to the left shows the three-year The team’s purpose remains unchanged – to integrate data science across the investment performance of our ten largest funds. organisation and to provide data-driven insights to our investment Our assets are more diversified across our professionals, which help them make better decisions for our clients’ benefit. product range than last year. We now have 14 The team does not manage money itself, but provides analysis and insights funds with over £1bn of our clients’ AUM, up from from often complex and large datasets, which our fund managers would 13 a year ago. 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 ## 58% expanding our coverage to include fixed income holdings. The team have broadened their reach this year, working in collaboration with Mutual fund our investment teams. As we have expanded our capabilities, the team has outperformance 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 2020: 70% many months before it features in external research. ## 14 Link to core objectives: funds with over 1 3 4 £1bn in AUM > For more information see page 17 2020: 13 Link to principal risks: 1 2 > For more information see page 60 Jupiter Fund Management plc | Annual Report and Accounts 2021 31 ### STRATEGIC REPORT ## STRATEGIC AND OPERATING REVIEW: ## PRODUCT AND DISTRIBUTION ## 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. | Broader expertise in the | A wider global footprint | A high-conviction, genuinely active | | --- | --- | --- | | institutional channel | In 2020, the acquisition of Merian allowed us to | product range | | Expanding our reach within the institutional | consolidate and strengthen our leading position | As a high-conviction asset manager, we focus our | | channel remains a key focus for us and a | within our home market of UK retail. This year we | resources on the areas in which we believe we | | significant opportunity for growth. Currently, | were able to expand our outlook and focus | can help our clients achieve their financial goals. | | 8% of our AUM are through the institutional | specific investment into our overseas businesses. | This client-led approach naturally leads us to a | | channel, but we have targeted growing this to | | carefully designed product line-up focusing on | Our initial focus has been on the US, having 20% in the medium term. our areas of specialist capabilities, with no desire opened our first presence in Denver in 2020, both to achieve ‘waterfront’ coverage. A more direct client relationship, and typically supporting the NZS team and initiated our move greater longevity, means that we can build into the US institutional market. Through this Over recent years, we have continued the deeper relationships with our institutional clients year, we have grown that resource with a greater process of rationalising our product range, to and provide exceptional quality of client service. distribution presence and a carefully selected ensure we have the right products in the right | This is increasingly expected by all of our clients | product designed to appeal to the US | jurisdictions. Over the last three years, we have | | --- | --- | --- | | and seen as a differentiator, in addition to | institutional market. We have also established an | closed some 18 products, resulting in a more | | investment performance. | investment office in New York with three credit | focused, targeted product range. | analysts. The US market, with half of the world’s Through 2021 we have continued to invest in this We will, however, always continue to evolve our investible assets, remains a material opportunity area. We have committed new resource, product range, including with significant for Jupiter and one in which we continue to including new senior hires in the UK and Asia and investment in new strategies through seed invest. | a growing presence in the US. As we move into | | capital. Where we have launched new products, | | --- | --- | --- | | 2022, additional investment will take place | We are extending our global reach to the | these have predominantly been ESG-focused, | | including in the consultant database and RFP | Australian market and are actively engaged in | such as the Article 8-compliant Dynamic Bond | | teams and hires in continental Europe. | discussions on investment solutions we can offer | ESG and the Article 9-compliant Global Ecology | | | to Australian-based institutional clients. The | Bond, which have expanded our sustainability | A number of our key products are ideally placed Australian market is one that is dominated by the range into fixed income. Both of these products for institutional markets around the world, such institutional channel and, much like the US, one were launched in January 2022. as Global Sustainable Equities, unconstrained which is likely to favour our Global equity global fixed income and NZS Capital’s global We have also launched new vehicles in existing capabilities, such as Global Sustainable Equities equity strategies. While not a guarantee of future strategies, such as a Luxembourg-domiciled and NZS Capital. flows, gaining ‘buy’ recommendations from global SICAV for Global Sustainable Equities and both | consultants is often viewed as a key precursor. | We are also developing our relationship with Ping | Luxembourg and Delaware LP vehicles for NZS | | --- | --- | --- | | This year, we have greatly increased our standing | An in China, which we inherited through Merian. | Capital’s global equity strategies. | | amongst global consultants and we now have 15 | In 2021, Ping An took over management of our | | | ‘buy’ ratings across nine strategies, more than half | China Equity product and we are working with | A focus on sustainability | | of which were gained this year. | them to develop this relationship further through | | Jupiter has a long history of delivering investment 2022. performance for our clients through responsible | Overall, more than £17bn of our AUM is from | investing. Our approach is based on active | | --- | --- | | clients based overseas, a near 70% increase since | engagement with the companies in which we | | 2018. | 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. | | £5.1bn | £17.5bn | | 12 | | --- | --- | --- | --- | --- | | client assets through the | | assets from clients | products accredited | | | institutional channel | | based outside the UK | as SFDR Article 8 or 9 | | 32 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## RECONNECTING ## WITH OUR CLIENTS 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 After more than a year away from meeting our clients face-to- approach to the classifying of European- face, we were delighted to once again be able to do so in the domiciled funds under the SFDR. Our approach second half of this year. We held a number of safe, Covid-secure has been defined by listening to our clients’ events as local measures allowed, including our successful preferences and their desire for authenticity. London-based investment conference. Our distribution and fund More details on our authenticity focused management teams have also been back on the road in the approach to SFDR are on page 49. second half of this year, and our ‘Meet the Manager’ roadshows We do not plan to change the investment connected with over 225 clients. 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 ## “The presenters were all excellent funds. Therefore, in a select number of cases, we ## will look to launch Article 8 or 9 versions of and the amount and relevance of existing strategies, that are designed to invest ## within those stricter criteria. As set out above, we the subject matter the best I’ve have already launched the Article 8-compliant ## heard for some while.” Dynamic Bond ESG and the Article 9-compliant Global Ecology Bond fund. Jupiter client Delivering value for money We remain committed to delivering value for ## “Insightful, “Excellent money for our clients. This year, we published our ## second annual Assessment of Value report for informative presentations. our UK fund range. ## and interesting.” Great to be back In this year’s report, 84% of our funds’ unit classes Jupiter client ## received a positive rating of either 4 stars (“has at a live event.” consistently delivered strong value”) or 3 stars Jupiter client (“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 Link to core objectives: deliver. 2 3 4 Producing the report once again allowed us to > For more information see page 17 demonstrate to our investors that real client value derives from a host of different elements. Link to principal risks: We look forward to repeating this process in 1 2 6 coming years, with a view to continually > For more information see page 60 improving the value we deliver to our investors across the board. Jupiter Fund Management plc | Annual Report and Accounts 2021 33 ### STRATEGIC REPORT STRATEGIC REPORT ## DIVERSE ## Since we began, we have Claire Mediene, Co-Chair, Jupiter Pride Network ## shaped our investment “It’s been a banner year for the Jupiter Pride Network! In June, we were overwhelmed by the identity around a core belief 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 ## that we can make a difference but also reminded us many LGBTQ+ people around the world continue to live in a climate of for clients by giving talented 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 ## professionals freedom to forward to building on this momentum in 2022, and working with our allies to develop their ## pursue their own investment pledge into meaningful engagement.” ## 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 Jupiter considers diversity and inclusion ## “Independent bringing in people with different ways of thinking company-wide, by region, by function and by is particularly important. team, as well as at varying levels of seniority. We ## thinking delivers also take part in Investment20/20, an initiative ## started by our CEO Andrew Formica and diverse perspectives Chairman Nichola Pease to bring more diverse ## that ultimately lead talent into all aspects of investment management. In 2021, we chose to nearly triple the number of ## to better outcomes for | “Having a truly | entry-level opportunities available for school | | | --- | --- | --- | | | leavers and graduates, recognising the last 12 | our clients.” | | diverse workforce | months have been more challenging for young | | Matthew Beesley talent to gain work experience and get a start in ## leads to much Chief Investment Officer their chosen career, as well as the value that this brings to Jupiter. ## greater and Diversity goes hand in hand with inclusion, and ## richer outcomes.” To mark Pride month, our Jupiter Pride Andrew Formica has led from the front in his Network joined together to recite a Andrew Formica, passionate support to open up the investment powerful poem, written by Kalaavathy, Chief Executive Officer industry to a wider pool of talent. In 2021, Andrew a gifted LGBT poet, inspired by Maya signed up to a reverse mentoring programme set Angelou’s “Still, I rise”. Visit our website up by Investment20/20 and #TalkaboutBlack. to view the video: The organisation, which works under the umbrella www.jupiteram.com/jupiter-pride- of the Diversity Project, aims to create “a pipeline month/ 34 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## “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 ## THE ABILITY TO BE AGILE, ## leavers and graduates.” ## Tracey Kinsella ENTREPRENEURIAL AND FLEXIBLE HR Director ## IS THE VALUE OF ACTIVE MINDS of black leaders in the asset management efforts in this space will continue as the company ## “ At Jupiter we choose industry.” For Andrew, the initiative reinforced his seeks to draw inspiration and strength from the long-held view that having a truly diverse vibrant, diverse society in which it operates. For ## to embed diversity workforce leads to much greater and richer more on our approach to diversity and inclusion, ## outcomes. Everyone, whatever path they have please see page 39. by asking everyone taken to be where they are today, brings their ## to play their part.” 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 Jas Singh, Executive Sponsor, Jupiter Gravity Network insight on helping create a workplace where “The Gravity Network is our group focused on addressing cultural and ethnicity aspects of people from under-represented backgrounds can diversity and inclusion. We chose the name ‘Gravity’ to acknowledge diversity and inclusion as feel comfortable and thrive. a force that affects us all while recognising the advancement of some minority groups can be The Jupiter Pride Network is a case in point. weighed down by entrenched views, stereotypes, and a lack of opportunity. As a network, we The network offers LGBTQ+ employees and want to demonstrate how an ethnically and culturally diverse workforce is a source of their allies advice, support and camaraderie in competitive advantage for our business, and a benefit to our clients and stakeholders. In the a safe, judgement-free space, but also works to short term, we seek to boost access for young people from ethnic minority backgrounds into effect change in the business and raise awareness the industry and to find ways to attract more candidates from under-represented groups to of LGBTQ+ specific issues. In 2021, a video filmed apply for roles at Jupiter. Longer term, we want to embed diversity and inclusion as an by the network to mark Pride Month successfully irrevocable part of the agenda and a business priority. The positive response to our launch at all drew attention to the ongoing discrimination levels of the business has been very encouraging.” 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 ## PERSPECTIVES Jupiter Fund Management plc | Annual Report and Accounts 2021 35 ### STRATEGIC REPORT ## 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 During 2021, we re-designed our London office space and set to work to create a truly Our business is built upon the value of our people welcoming, flexible working environment to and the way in which we embrace our cultural foster greater collaboration. We also continued pillars in all that we do. Putting clients first is OUR CULTURAL PILLARS to develop our technology to fully enable the central to our culture and at the heart of our new working environment. Through a regular WE PUT CLIENTS FIRST business model. programme of internal communications that As we continue to navigate these turbulent times, WE VALUE OUR PEOPLE included a weekly newsletter ‘Zigzagging’, based working closely together and appreciating the on the name of our headquarters in London, in WE SUCCEED TOGETHER contribution that each and every individual makes addition to our monthly digital staff magazine, we has become more pertinent than ever before. shared information about our plans for returning WE CHALLENGE OURSELVES We follow a set of principles that guide and to the office and provided updates on the underpin the way we treat each other and how exciting developments to our office space. We we do business. These help us to understand the were particularly cognisant that we had a number behaviours that are important to delivering for of new joiners, including those through the our clients. At Jupiter we express these principles Merian acquisition, coming to the office for the around four ‘cultural pillars’: first time, and were focused on creating a seamless transition to their new workplace. • We put clients first With the safety and wellbeing of our employees • We value our people an ongoing focus, we were officially able to • We succeed together launch our hybrid working model once • We challenge ourselves restrictions were eased and we were able to | We seek out new and improved ways to embed | return to the London office. Through a | | --- | --- | | these principles in everything we do, from the | comprehensive programme of events with | | way we communicate, to how our decisions are | employee health and wellness at the centre, we | | made. Given the headwind of Covid-19 and the | celebrated being back together and created time | | inevitable potential cultural challenges that | to allow people to reconnect with colleagues | | acquisitions can bring, we made people and | both old and new. Our employees abroad | | culture a key priority in 2021. | participated in their own programmes which | reflected each different country’s own level of Back together, our opportunity restrictions. 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. 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 Health and wellbeing Enabling Company-wide share ownership is an ESG continues to be an important focus for important objective in promoting our cultural Jupiter as well as for the industry. In support of As employees transitioned back to the office, we pillar of ‘We succeed together’. Compensation our business objectives in this area, we offered all provided a programme of hybrid working awards, particularly deferred bonus payments and employees the chance to study for the CFA ESG webinars aimed at offering practical tips and regular Long-Term Incentive Plans, are designed Certificate, fully sponsored by the Company. strategies to maximise productivity, improve to align the interests of our employees with Since the end of July 2021, more than 5% of our collaboration and maintain a healthy work and those of the Company’s stakeholders, including people have enrolled on the course. life balance. Running alongside the webinars, we its shareholders. put together a series of facilitated ‘reconnection The Jupiter leadership conference took place in | days’ to help people re-engage with their teams | We are pleased to have been able to once again | October which brought together senior leaders in | | --- | --- | --- | | and the organisation, and Executive Committee | grant a share award of £2,000 to each of our | the Company to discuss the strategy, explore | | engagement meetings for our people to discuss | permanent employees. This is the third year in a | new ideas and promote collaboration amongst | | key issues with senior management. | row that we have done so, promoting the | the group. The presentations focused on our | | | philosophy of allowing staff to share in Jupiter’s | clients, our culture and diversity and inclusion, as | We supported employees to ensure that their long-term success. We have also continued our well as exploring arguably the most important home office remained as comfortable and ‘CEO Award’ programme which recognises a issue we are facing as a planet – that of climate effective as possible and once again offered a number of employees who have demonstrated change. We will build on the success of this event contribution of up to £1,000 per employee an exceptional contribution to the Company’s and the development of Jupiter leaders through a towards the purchase of office equipment and success, in addition to excellent performance in senior leadership programme which began in furniture to enhance their working environment. their role. This award is granted in Jupiter shares. early 2022. Whilst we very much encouraged our employees In addition, employees are invited each year to to take some time off over the summer to rest participate in schemes, which provide and recharge, we acknowledged that 2021 was opportunities to purchase Jupiter shares in a tax not a normal year to take holiday, with a efficient manner, in some schemes matched by significant amount of time spent under Jupiter. government restrictions. We therefore adjusted our holiday rules so that employees had the Keep learning opportunity to double the number of days that The development of our people is key to Jupiter’s they were permitted to carry over. success. Our cultural pillars inform the core Rewarding our employees curriculum we offer to all employees and drive our intention to help people fulfil their potential, Our reward framework is designed to attract, whether that’s through individual development, motivate and retain talent. It creates a tangible team activities, management courses or link between performance and compensation, professional qualifications. while ensuring that our people’s interests are aligned with those of our clients. Through a mix During 2021, we offered a virtual training ## 17 of fixed and variable components, we provide programme focusing on a diverse range of topics. competitive total compensation that rewards These included courses on current industry people joined success and the promotion of our culture and trends such as crypto-currency, and workshops Jupiter through values. on communication and management skills. Investment20/20 Employees also had the opportunity to expand their understanding of programming through a course developed by Jupiter’s experienced data science team. ## £2,000 free share award to all permanent employees Jupiter Fund Management plc | Annual Report and Accounts 2021 37 ### STRATEGIC REPORT PEOPLE AND CULTURE continued ### INVESTMENT20/20 Investment20/20 is an industry-wide initiative Gergana tells us that, “Jupiter’s active approach He explains, “In my last few months at college I that aims to reduce barriers to entry into asset goes beyond the investment concept and came across a few articles that explained why management and to recruit a more diverse pool reaches to the spirit and mind-set of its many university graduates struggle to find jobs in of talent. Its mission is to achieve systemic employees. I really enjoy the fact that Jupiter a role that they studied. I still applied to UCAS change across the industry, so that all firms hire maintains its proactive environment with and went through with my university application; for potential, rather than academic background employees – Jupiter is a company which however, I thought that I might look into other or experience alone. recognises people’s potential and ideas.’’ ways to get into the asset management industry.” Investment20/20 was founded in 2013, with Jupiter is keen to support employees in gaining The majority of the applicants for the role had Nichola Pease (our Chairman) and Andrew qualifications and ensuring they are able to studied to either undergraduate or master’s level. Formica (our CEO) co-founding the initiative. maintain a healthy work-life balance. Over the Bartek’s application stood out as being different Jupiter was one of a small number of firms who last eight years, Jupiter has sponsored Gergana in and it was clear to the interview panel that he took part in its launch and we welcomed our first the CFA qualification and supported her during had a keen desire to learn, as well as to work hard cohort of four trainees in its first year. Its scope maternity leave and her subsequent return to the and prove that a degree isn’t required to work in has significantly grown since and, taking office. asset management. At Jupiter, we look to advantage of the Government’s apprenticeship promote internally where we can and support She says, “Jupiter offers a very supportive scheme, we now hire both trainees and younger employees in gaining international environment for working parents and I am really apprentices from a variety of backgrounds. In experience as they develop their careers. In early pleased to say that returning to work from my 2021 we nearly tripled our intake from previous 2021, Bartek successfully applied for an investment maternity leave was a very smooth process, years, welcoming 17 trainees and apprentices. analyst role in Jupiter’s Luxembourg office. throughout which I received continuous support Initially joining us on a temporary contract, we from my managers and colleagues.” Bartek notes that, “When I started my trainee role, have offered permanent roles to over 80% of our I didn’t dream that in three years’ time I’d get to In 2018, when Gergana was a Senior Portfolio Investment20/20 intakes. move to Luxembourg. I’ve been given a lot of Analyst, she was involved in the process of opportunities to learn and develop at Jupiter; after Gergana Kabakova joined Jupiter as part of the recruiting the team’s next trainee, hiring Bartek taking these I was given more responsibilities very first cohort, starting her career as a Marketing Kapron. which led to my move to Luxembourg.” Information Executive Trainee. Eight years later, Bartek joined Jupiter as a trainee portfolio analyst she remains at Jupiter, is now a Senior Performance in the investment risk team straight after college, Reporting Analyst and is CFA Level 2 qualified. having chosen not to go to University. 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. 38 Jupiter Fund Management plc | Annual Report and Accounts 2021 # 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 DBJ 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 # "Achieving greater diversity amongst our people and creating a more inclusive culture is a key focus." 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. | At 31 December 2021 | 2021 | | 2020 | | | --- | --- | --- | --- | --- | | | 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 | # 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 39 ### STRATEGIC REPORT ## ACTIVE RESPONSIBILITY ## ESG AND STEWARDSHIP ## Sustainability is a key focus for Jupiter, with the ## principles of acting responsibly embedded into our culture. The world is undergoing an unprecedented We have continued this evolution, launching new This principle of active responsibility, extends period of change, with social and environmental ESG-focused products over recent years, throughout the company, with focus on all of issues defining the current era. We believe that including Global Sustainable Equities and an SFDR our stakeholders. We actively engage with the active asset managers are among the groups most Article 8-compliant version of Dynamic Bond. companies in which we invest. We help our empowered to address these challenges. As a diverse and talented people to drive a culture We started assessing and reporting against the high-conviction active asset manager, we have an of collaboration, and we support and protect Task Force on Climate-Related Financial important role to play, both in the allocation of our local communities and the environment Disclosures (TCFD) requirements in 2017 and, as a capital and in active engagement with the around us. member of the NZAM initiative, have committed companies in which we invest. This is a role that is to net zero across our investment portfolios and Sustainability and the principles of active at the core of active management. corporate operations by 2050. This year, we have responsibility at Jupiter can be considered This approach applies across all of our business, evolved our approach and set interim targets to through three distinct but overlapping areas: with ESG factors built into investment processes be achieved by 2030. Our full TCFD report can be 1. The integration of ESG principles in active for all of our strategies. We have always believed found from page 45. investment in this approach and the heightened focus on This active responsibility also means a 2. Our sustainability-focused product range sustainability is core to our beliefs. We believe commitment to hold ourselves to the same high 3. Our corporate commitments that companies which are managed sustainably standards which we apply to our investee will create value over the long term for the companies, for the benefits of our people, our benefit of our clients and all of our stakeholders, local communities and the wider environment. including society and the environment. We have Along with a commitment to net zero, we are this Link to core objectives: a long and successful history of investing year reporting in line with the UNGC framework. sustainably, launching the first green unit trust in 2 3 4 5 the UK in 1988. > For more information see page 17 A long history of active responsibility 2015 Industry Launch of TCFD | 1988 | | 2008 | | | --- | --- | --- | --- | | Investment | | Investment | | | First sustainable fund | | PRI. Jupiter has been a | | | launched in UK – Jupiter | 2000 | signatory of the UN Principles | 2012 | | Ecology Fund | | for Responsible Investment | | | | Corporate | | Corporate | (PRI) since 2008 CDP. Jupiter founder Membership of signatory to the Carbon the 30% Cub Disclosure Project | | 2001 | | 2014 | | --- | --- | --- | --- | | | Industry | | Investment | | 1998 | | 2010 | | | | EUROSIF (European SRI | | Investor Forum | | Industry | Transparency Code) | Investment | Membership | | UKSIF (the UK | | Signatory to the | | | Sustainable Investment | | UK Stewardship | | | and Finance Association) | | Code | | 2013 Corporate Launch of Investment20/20 Jupiter Industry 40 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## 1. THE INTEGRATION OF ESG PRINCIPLES ## IN ACTIVE INVESTMENT The principle of analysing ESG-related risks as we There are a wide variety of investment flagship Global Sustainable Equities strategy, construct our high-conviction portfolios has long approaches available in the market, ranging from which has seen net inflows this year of £200m. been a cornerstone of our investment those solely focused on financial returns all the We have also broadened our range both with philosophy. way through to impact investing. Our philosophy, ESG-focused versions of existing strategies, such and active engagement with our investee as Dynamic Bond ESG, and new products such as All of our fund managers are required to build companies, mean that all of Jupiter’s products the Global Ecology Bond fund. ESG risk considerations into their investment have ESG-risk considerations built into their processes, which are assessed as part of our More details on our sustainability-focused investment processes. annual appraisal process. product range can be found on page 49. Client demand in recent years has moved Over recent years, we have seen a marked shift in towards those products with clearer sustainable client demand. Many clients are increasingly investing objectives. Our product strategy has moving away from looking solely at the financial mirrored this, with recent launches being of returns of their investments, and are now taking a strategies with a clear focus on sustainability. This keener interest in the wider impact these year, we have launched an additional investments have on people and the planet. Luxembourg-domiciled SICAV vehicle for our | 2017 | | 2021 | | | | --- | --- | --- | --- | --- | | Corporate | | Investment | | | | Signatory to the Women | | NZAM interim targets set | | | | in Finance Charter | | for portfolio emissions | | | | | 2019 | | | 2050 | | Founding member of | | Finance for Biodiversity pledge | | | | | Investment | | Investment | | the Diversity Project Member of the IIGCC Corporate Net zero targets A4S – Accounting for NZAM interim targets set for for NZAM across Member of Climate Sustainability corporate operations portfolios and Action 100+ corporate Empower mentoring scheme UNGC – inaugural communication Corporate operations on progress RE100 initiative Member of Workforce Disclosure Initiative Industry SFDR introduced | 2016 | | 2020 | | | --- | --- | --- | --- | | Industry | | Investment | | | | 2018 | | 2030 | | Green Bond Principles | | Signatory to NZAM initiative | | | | Investment | | Investment | | Hampton Alexander Review | | Member of Farm Animal | | | | Signatory to the Japan | | Interim targets for NZAM | Investment Risk & Return Stewardship Code across portfolios and (FAIRR) initiative corporate operations PLC annual report starts to Corporate disclose against TCFD Member of Good recommendations Work Coalition Launch of Global Forest Carbon Initiative Sustainable Equities Signatory to the UNGC Industry LGPS Investment Code of Transparency 41Jupiter Fund Management plc | Annual Report and Accounts 2021 ### STRATEGIC REPORT ESG AND STEWARDSHIP continued Investing for the future sustainability, the team benefits from a broad active communication with our wider range of experience. stakeholders, including regulators and Throughout this year, we have continued to government bodies. | invest in growing our sustainability capabilities | Having made these investments, we move into | | | --- | --- | --- | | across the firm, with new products and key new | this year with over 20 people dedicated to | We engaged over 700 times with almost 500 | | hires. | questions of sustainability, in addition to an | companies on ESG matters in 2021. The box | | | 11-strong data science function. We will continue | below describes a number of these key | We have created a new role of Head of to invest appropriately in this key area of growth engagements. Sustainability, who joined us in early 2022. This through 2022. group-wide role is responsible for co-ordinating Where change is not forthcoming, one of our our overall ESG strategy and ensuring best most powerful tools is to use our voting rights Active engagement practice across the business. and influence, often in collaboration with other As high-conviction, active investors, we have a investors, to address any issues that are an Within the investment function, we have also duty to our clients to be effective and impediment to change. invested in a number of newly-created ESG responsible stewards of the investments we make investment directors. These product specialists In 2021, we voted at 388 meetings in the UK and on their behalf. In this spirit, we seek to invest in are focused on integrating ESG factors into 2,029 overseas. Although our preference is always well-managed companies with business models investment processes, communicating with our to actively engage prior to these meetings, we that are sustainable in the long term. clients and acting as a link between the voted against management on at least one A key part of this process is actively engaging investment and stewardship teams. We have resolution at 44 UK meetings and 772 overseas with our investee companies across all asset appointed ESG investment directors within fixed meetings. classes, to drive more sustainable business income, UK equities and multi-manager teams During the period Jupiter voted on 66 climate practices, which results in better outcomes for and we will continue to grow this function resolutions, including both management and our clients and, ultimately, all of our stakeholders. through 2022. shareholder proposals, supporting 70% of items. This active engagement directly with We have also increased the dedicated resource We also voted on 83 proposals that were management is key to our investment philosophy. within our stewardship team, who are focused on classified as social resolutions, both management It allows us to glean a different kind of insight supporting our fund managers through active and shareholder proposals, and supported 61% of into managements’ view of their businesses’ engagement with our investee companies. With these items. A further breakdown and more progress on ESG matters than through data new hires with backgrounds in fixed income, detailed analysis will be provided in Jupiter’s analysis alone. Our engagements also include climate risk and advising corporates on Annual Stewardship Report to be published in April 2022. ## GSK UBISOFT RALPH ## LAUREN | We had an initial engagement with the | The company was at the centre of misconduct | We engaged with various sustainability | | --- | --- | --- | | Chairman at the beginning of the year to | investigations during summer 2020 which led to | experts from the company as part of its | | discuss challenges around the product | the three senior executives stepping down. We | investor outreach programme, discussing a | | pipeline and perceived weaknesses | had conducted various Board level engagements | wide array of ESG issues across governance, | | associated with the company’s | on these matters and our latest interaction was | environmental supply chain and human | | performance culture. This was | with the Lead Independent Director during | capital. | | acknowledged by the Chairman, who | December 2021. The fallout from this scandal | | The company discussed its participation in outlined the reforms and leadership suggested a deeper lying problem in terms of a the regenerative cotton initiative. The changes implemented by the CEO. Having toxic environment rooted in a lack of gender company has provided funds to this launched a public campaign citing the diversity. programme which supports long-term CEO’s lack of industry experience, Elliot This meeting provided an opportunity for a sustainable cotton production in the US Advisors approached Jupiter to discuss progress report on deep lying cultural issues with the aim of eliminating 1 million metric their activism. Our position remained rooted in a lack of gender diversity. The tons of carbon from the atmosphere by unchanged – we are supportive of the company outlined its action plan to address the 2026. The programme looks to educate CEO, have high regard for the Chairman key issues, including hiring more female staff, farmers to use regenerative practices. and place our trust in the Nomination diversity and inclusion training, the hiring of a Committee to ensure that there is the The dialogue also covered the company’s new Chief People Officer and appointing right balance of skills on the Board. efforts to diversify its supply chain to Accenture to perform an external audit of its HR reduce risk of disruption and apply lessons We also joined a collective engagement practices. The company is also reviewing how from the pandemic. Their sustainability discussion with the Senior Independent diversity is treated from a product perspective initiatives, particularly around diversity and Director and a wide range of shareholders. within the video game industry. wellbeing, have meant they have achieved In October, the company announced the better staff retention than their peers. appointment of Dr Harry Dietz, a professor of genetic medicine, strengthening the Board’s industry experience. 42 Jupiter Fund Management plc | Annual Report and Accounts 2021 Engagement with our wider stakeholders, including regulators, governments and industry Governance structure 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 ## JUPITER FUND comprehensive details on our engagements ## throughout the year, but the below examples MANAGEMENT demonstrate some of the topics covered. ## PLC BOARD • 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 ## EXECUTIVE these separate ShareAction-led workstreams ## COMMITTEE 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 STEWARDSHIP CSR in-work poverty through the promotion of COMMITTEE COMMITTEE the Living Wage. Stewardship & CSR Director (Chair) Stewardship & CSR Director (Chair) • UK Listings Review (Hill Review): As part of Executive Director CEO HM Treasury’s plan to strengthen the UK’s position as a leading global financial centre, the Chief Investment Officer Non-Executive Director Chancellor appointed Lord Hill to lead a review Head of Strategy HR Director into the UK Listings regime. Jupiter’s UK SMID & Corporate Development Head of Stewardship team has a significant track record in investing Heads of Strategy Head of Facilities at IPOs and understanding the dynamics of the Head of Stewardship Chair of employee UK market and were approached by an Fund managers representation forum 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 | provide feedback on product and data quality, | Board continues to regularly consider | | --- | --- | --- | | Investment strategy, Stewardship Team or Data | benefiting all participants. | sustainability matters, more details of which can | | Science would provide a tutorial outlining an | | be found from page 68. Our Executive Directors | This internal, proprietary tool gathers, cleanses aspect of their day-to-day work. Clients had have ESG-focused objectives included as part of and presents ESG data from third-party providers the opportunity to ask questions and provide their remuneration, more on which can be found together with our in-house holdings data. This feedback on the session. from page 102. helps enhance our fund managers’ consideration of the ESG risks of each of their investee It is crucial that our investment and corporate A data-driven approach companies, as well their portfolios as a whole, activities are aligned in their philosophy and aims. We believe that data and information flows will and drives better engagement with investee In order to help achieve this, our two key continue to play a crucial role in enabling active companies. Equally, this allows our CIO office to committees, the Stewardship Committee and the investors to address the challenges the world is review the ESG risks across strategies, teams, and Corporate and Social Responsibility (CSR) facing. | | the group as a whole. The proprietary nature of | Committee, are both chaired by Edward Bonham | | --- | --- | --- | | We have continued to invest in our data science | the tool means the team is able to rapidly | Carter, our Stewardship and CSR Director. | | team through 2021, which has now grown to a | develop new features and integrate new datasets. | | The full memberships of both committees are team of 11. The team continues to play a key role detailed above. The activities of the Stewardship in our focus on Sustainability through the Governance Committee and selected notable outcomes can ongoing development of the ESG Hub and We believe that an authentic and committed be found in the table overleaf. Those of the CSR engagement with third-party data vendors to approach to sustainability requires engagement Committee can be found on page 51. from all of our people, from the Board down. The 43Jupiter Fund Management plc | Annual Report and Accounts 2021 ### STRATEGIC REPORT ESG AND STEWARDSHIP continued Stewardship committee Activities Outcomes H1 2021 With UK Small & Mid Cap (SMID) and European Growth teams, Engaged with CEO and Chair of Bellway Direct and collaborative discuss stewardship approach re: housebuilders and cladding engagement with Kier Group where we voted against the remuneration suppliers following findings from the Grenfell Inquiry 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 Initiative adopted by the UK SMID strategy and shaped communication to proactively imparts stewardship expectations investee companies Internal project group (encompassing technology, operations, Ongoing scoping exercise of client requests, fund manager feedback and data science and stewardship teams) to drive solutions around regulatory developments ESG regulatory reporting Update on new engagement record-keeping database Testing undertaken and the new system launched in H2 Update on NZAM protocols and objectives including establishing Analysis undertaken with consultant Carbon Intelligence and interim target interim target by October 2021 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 Dynamic Bond ESG launched in early 2022 product NZAM update including on interim targets and presentations from Carbon Intelligence Discussed consultation response to the (Department for Business, Jupiter responded to the consultation as both a listed company and an Energy & Industrial Strategy) entitled “Restoring trust in Audit and investor in UK companies Corporate Governance” Update from Global Sustainable Equities on FCA letter addressed Ongoing review of process and approach in light of guidance and to the chairs of authorised firms outlining sustainability expectations expectations of financial products Update from Chrysalis Investments on overall ESG approach and ESG investment director appointed and revised ESG integration and stewardship strategy engagement policy is being developed Discussed approach to FCA discussion paper on Sustainability Jupiter responded to the FCA’s discussion paper in January 2022 and there is Disclosure Requirements ongoing work to ensure we shape our approach through this development Approved decision to join collective letter to UK Government on Collective communication returned to UK Government mandatory reporting for healthy and sustainable food 44 Jupiter Fund Management plc | Annual Report and Accounts 2021 # TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURE (TCFD) ## 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, UNFRI 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 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 15°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. ## 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. IGCC 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 IGCC'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." Jupiter Fund Management plc | Annual Report and Accounts 2021 45 ### STRATEGIC REPORT ESG AND STEWARDSHIP continued Governance engagement across the different asset classes in have a role to play in the transition to a which we invest. The CSR Committee considers low-carbon economy. The Board has ultimate responsibility for the the sustainability of Jupiter as a business and Group’s risk strategy and for determining an We believe we can mitigate these risks and coordinates with the Stewardship Committee to appropriate risk appetite, as well as the tolerance capture opportunities most effectively through ensure a consistent approach. The Chairman of levels within which the Group must operate. The our security selection and portfolio construction, the Audit and Risk Committee regularly attends CEO, the CIO and other senior management that and by active engagement with the companies in both the Stewardship and CSR Committees. More make up the Executive Committee are which we invest, both directly and through details on the memberships and activities of both responsible for managing the Group’s day-to-day partnerships with other institutions. These committees are on pages 43, 44 and 51. business and for ensuring the implementation of factors, along with engagement with our clients strategy and, as such, have responsibility for and stakeholders, have also informed our decision Strategy climate change-related issues. Within the Board, to establish a net zero target for our full range of overall responsibility for environmental and We have committed to achieve net zero investments and operations. We believe that corporate responsibility, including the emissions by 2050 across our full range of targeting net zero, which we have expressed by development and implementation of the investments and operations. Within our annual joining NZAM, is the most effective way in which company climate change strategy, resides with CDP Climate Change response, we identified four we can build resilience into our strategy across a our CEO. The Board meets regularly throughout risks and four opportunities related to climate range of climate scenarios. the year and discusses climate-related issues and change, which could impact our corporate To date, we have not described the resilience of how they impact Jupiter. In 2021, this included strategy. These are summarised in the table our strategy, taking into consideration different sessions at which the Board reviewed and below. The identification of these factors reflects climate-related scenarios, including a 2°C or lower approved Jupiter’s decision to join the NZAM internal discussions by the above Committees scenario, in line with ‘Strategy c’. We continue to initiative. The Board also received training on over several years. As part of our internal planning develop our approach to climate scenario analysis climate and net zero-related matters from an horizons in terms of TCFD, we consider short as described in more detail in the risk external consultancy in 2021. term to be up to three years, medium term management section of our disclosures on page to be three to five years and long term to be In October 2020, we announced that our Vice 47. However, data availability remains limited in more than five years. Chairman, Edward Bonham Carter would take on certain geographies and asset classes beyond the role of Director of Stewardship and CSR. We have assessed the resilience of our strategy fundamental, long-only, developed market equity Edward reports to the CEO and supports the under a range of scenarios. As a high-conviction strategies and this means we have not been able work of the CIO office and the Stewardship active manager, the majority of our carbon to conduct scenario analysis across the entirety team. He also assumed the Chairmanship of both footprint as a business relates to the emissions of of our assets under management, although we Jupiter’s Stewardship Committee and the CSR our portfolio companies. Jupiter is not a have done so for the majority of the portfolios Committee. In 2022, we appointed a Head of significant producer of GHG emissions via our we manage. We continue to develop our Sustainability to oversee further progress in this operations, but we have set out initiatives and approach over time with the goal of stating the area of our strategy. targets to reduce these emissions, in line with our resilience of our strategy across a range of corporate responsibilities. We believe the scenarios in future. Identification of, and response to, systemic risks principal risks and opportunities for our business require co-ordination at organisational level and relate to the investment strategies we employ on Engagement and partnerships and this reflects the complex nature of these issues behalf of our clients. For example, in a scenario in collective engagement and the long time horizons over which they which global governments undertake rapid action manifest themselves. Under joint leadership, both We actively engage with investee companies to to mitigate climate change, the financial the Stewardship Committee and the CSR gain insights about their exposure to climate risks, performance and future earnings capacity of Committee play a governance role in responding to encourage them to align their businesses with carbon-intensive companies could be negatively to these risks. The Stewardship Committee net zero and successfully navigate the transition affected, leading to declines in value of their considers climate risks and opportunities within to a low-carbon economy. Core considerations in securities. As stewards of our clients’ capital we our investment strategies and reviews this dialogue include a company’s potential Climate-related risks Risk Description Timeframe Impact Market risk Emerging regulation could negatively impact the financial performance of Long term Reduced revenue carbon-intensive companies in our portfolios. 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 Long term Increased revenue strategies. Product and services Emerging policies could positively impact investee companies which deliver Short term Increased portfolio value renewable energy technologies. Product and services Changing consumer preferences could create opportunities for investee companies Short term Increased portfolio value which manufacture food with lower environmental and climate impact. 46 Jupiter Fund Management plc | Annual Report and Accounts 2021 exposure to stranded assets, transition risks and outcomes as far out as 2050. As such, its results Operational emissions physical risks of climate change, and whether should be used with a degree of caution in both As well as working towards reducing the intensity management has a credible strategy to adapt to the value and time horizon of potential risks and of carbon emissions in our portfolio companies, the energy transition. opportunities identified. We expect our practice we also actively seek to reduce our corporate in this area will continue to evolve as available Jupiter is a member of Climate Action 100+, an impact. methodologies develop. investor initiative which seeks to target collective We have an ongoing target to reduce overall action around a selection of the world’s highest Metrics and targets Scope 1 and 2 emissions year-on-year by more emitting companies and coordinate shareholder than 1%, in addition to our commitment to We have set an interim target for the proportion engagement with this subset. achieving net zero emissions by 2050 across our of assets to be managed in line with the Joining Climate Action 100+ allows us to play a full range of investments and operations. This attainment of net zero emissions by 2050 or lead role in collective engagement with investee year, we have set a target of reaching net zero sooner. In line with the requirements of NZAM, companies on climate matters. We are also across Scope 1 and 2 emissions by 2030, with a we will review our interim target at least every members of the IIGCC. A core consideration for 1.5°C reduction pathway in place for Scope 3. five years, with a view to ratcheting up the becoming an IIGCC member was elevating our proportion of AUM covered until 100% of assets For the last ten years we have worked with our engagement on climate issues by acting are included. sustainability partner, Carbon Intelligence, to collectively with other institutions. measure and verify progress in improving our We have included our fundamental, long-only, operational footprint. Risk management developed market equities strategies within our 2021 2020 initial target scope. For this proportion of our Potential material climate risks in our portfolios (tCO 2 e) (tCO 2 e) % change AUM, we have set an interim target for the are identified by a variety of sources including Direct emissions 120.9 87.8 +38% emissions intensity to be reduced by 50% by the stewardship team, third-party ESG data, and 1 (Scope 1) 2030, against a December 2020 baseline. It should the Stewardship and CSR Committees. Climate is Indirect emissions 264.7 346.4 -24% be noted that, due to more limited corporate included as a formal aspect of stewardship within (Scope 2): location- activities as a result of Covid-19, 2020 is likely to the annual review process conducted by the CIO based represent a relatively low baseline for emissions. office. To provide integration within the overall These investment strategies, which represent Indirect emissions 0.0 0.0 – risk management framework, ESG data, including | | approximately 42% of Group AUM, as at the | (Scope 2): market- | | | --- | --- | --- | --- | | climate risks where relevant, are monitored using | | | 2 | | | baseline year, make up the core of our franchise | based | | third-party providers in the quarterly challenge and this is also where the greatest GHG emission Total Scope 1 and 2 385.6 434.2 -11% meetings conducted by the investment risk disclosures lie. We will also be including funds Other relevant 156.2 235.8 -34% teams. These processes enable the identification which are looking to be designated as Article 8 or indirect emissions and potential escalation of investment-related 3 9 under SFDR classifications. The target scope will (Scope 3) climate risks or opportunities which may be be reviewed and expanded over time as more deemed to impact the resilience of our overall 1. Direct emissions (Scope 1) comprised of building gas GHG emission data becomes available and as net strategy. We will continue to develop the combustion, fugitive emissions from refrigeration and air zero methodologies for other geographies and conditioning equipment and owned vehicles. integration of climate within our risk management asset classes, such as fixed income, emerging 2. Direct emissions (Scope 2) is building electricity processes in 2022. consumption. markets and our fund of funds range, develop. In 3. Direct emissions (Scope 3) comprised of business travel, We have developed our understanding of, and the meantime, we will continue to engage with waste disposal and water consumption. capabilities for, climate scenario analysis to our investee companies in all jurisdictions to consider potential risks and opportunities for our Overall, our total Scope 1 and 2 emissions encourage them to align their business models, portfolios beyond our investment time horizon. declined by 11% compared to 2020. This is due to set forward-looking targets and disclose their We have subscribed to MSCI’s climate model, a number of factors, including a lower headcount GHG emissions in readiness for a formal target Carbon Delta, which analyses climate change risks in our headquarters in London and more efficient framework. and opportunities, including both transition risks power usage throughout the building. The We have assessed our portfolios with input from and physical climate risks which could impact the increase in direct Scope 1 emissions compared to Carbon Intelligence and determined a 2030 value of our portfolios over time. Scenario 2020 is due to our employees returning to the portfolio emissions reduction target of 50% analysis can give an indication of whether office after spending much of the prior year which we believe constitutes a fair share of global investee companies are able to withstand rapid working remotely. reductions needed to attain net zero by 2050. energy transition and the potential impact of Jupiter will look to reference the One Earth other climate risks. We use scenario analysis to Climate Model, a rigorous climate and energy assess our portfolios and highlight possible blueprint for keeping global warming to 1.5°C, exposure to climate risks, encouraging us to used to establish sector-specific decarbonisation consider these issues. pathways that can be applied at the investment We have integrated data from the model into our strategy level. We will report on our progress ESG Hub to enable our fund managers to identify against these targets in our annual report and and manage potential climate risks within their stewardship report. portfolios, including an assessment of the sector We have used MSCI’s Carbon Delta data to allocations which are most exposed to both formulate our net zero target framework and to transition risks and physical risks from climate disclose the aggregate emissions profile of change. We have also conducted scenario approximately 60% of our assets under analysis on the portfolios included within the management in our response to CDP’s annual scope of our initial net zero target framework. climate questionnaire. 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 47Jupiter Fund Management plc | Annual Report and Accounts 2021 ### STRATEGIC REPORT | ESG AND STEWARDSHIP | continued | | | | --- | --- | --- | --- | | Our measured Scope 3 emissions reduced by 34% | | We remain committed to the continual reduction | Jupiter’s environmental policy statement | | in 2021. This was partly due to a reduction in air | | of our corporate emissions, including our move in | (www.jupiteram.com/environmental-policy) | | travel due to the ongoing impact of Covid-19. | | 2015 to a new ‘BREEAM Excellent’-rated building, | guides our approach to managing our carbon | | | | investment in a sustainable fit-out (SKA Gold | footprint, use of natural resources such as water | Water usage in our London headquarters was also rated) and our commitment to the RE100 and energy, and waste. reduced by over 90% following the initiative, committing us to sourcing 100% of the reintroduction of the greywater system. energy from renewable sources in our offices Our emissions have been verified to a limited with over six employees. level of assurance by Carbon Intelligence, an We have also partnered with Forest Carbon, a external third party, according to the ISO 14064-3 not-for-profit scheme providing woodland standard. Our chosen GHG methodology (Defra’s carbon capture projects in the UK, to plant more Environmental Reporting Guidelines) takes the than 10,000 trees over seven hectares in the UK. operational control approach. We have applied a By investing in woodland creation in the UK, we materiality threshold of 5% for the purposes of are not only removing carbon emissions but also reporting GHG data, in line with market practice facilitating flood alleviation, habitat creation, for similar firms. As a result, locations with six or employment, public access and cleaner air, more staff are defined as material and included in benefiting wider society in line with our the disclosure. corporate purpose. 2030 portfolio reference target Proportion of AUM to be managed in line with 41.6% (as at baseline year) net zero initially Strategies included Fundamental, long-only, developed market equities strategies Target year 2030 Baseline date 31 December 2020 Quantified target to be achieved by target Emissions intensity of AUM within target reduced by 50% by 2030 year 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 Jupiter’s portfolio reference target adopts the Intergovernmental Panel on Climate Change (IPCC) from which target is derived 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 Formulate and disclose net zero target framework across our operations and investments by 2050 for participating investment strategies Third party-consultant appointed to advise on net zero implementation to Increase proportion of AUM participating in net investments and deliver net zero curriculum to employees zero target Stewardship team & data science increase headcount Set Group-wide target for investment in climate solutions Appointment of ESG investment directors 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 Integrate net zero target framework within risk management processes Scenario analysis conducted on selected portfolios Metrics & Targets Initial proportion of AUM participating in net zero target disclosed See strategy section above 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 48 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## 2. OUR SUSTAINABILITY-FOCUSED ## PRODUCT RANGE Although all of our product range has ESG risks A product range well placed for changing Amid a significant increase in the intensity of considered as part of their investment processes, regulation debate around sustainable investments and we also offer a range of products which are evolving client expectations, we believe it is our As client demand has shifted towards products specifically focused on sustainable investing. responsibility to clearly articulate and more focused on sustainability and ESG, this has differentiate our approach. Across our sustainable investing and been reflected in a changing regulatory focus. environmental solutions teams, these products Regulators and industry bodies have sought to Having engaged with our clients, our over-arching are focused on investing in companies that are standardise approaches in an area with often approach is one of authenticity. We have not leading the transition to a more sustainable inconsistent taxonomy. amended investment processes or objectives for world, while still seeking the best risk-adjusted existing strategies in which our clients are already The most prominent example of this has been returns for our clients. invested. However, we have in some cases looked the launch of SFDR, which applies to funds to launch Article 8- or 9-compliant versions of The first product in our environmental solutions domiciled within the EU or those marketed to existing strategies, such as with the Article 8 range, the Ecology Fund, was launched to the EU-based clients. This regulation defines and Dynamic Bond ESG. market more than 30 years ago. This range seeks labels funds which have ESG factors integrated | to invest in companies which are focused on | (Article 6) and those which either promote | All of Jupiter’s EU-domiciled funds are defined at | | --- | --- | --- | | providing solutions to the environmental | environmental or social characteristics or have | least as Article 6. Full details are in the table | | challenges we are facing, whether that is clean | sustainable investment as their objective (Articles | below, but Article 8 funds include a range of | | energy, green mobility or more sustainable | 8 and 9). Other regulators, including the FCA in | products investing in European and emerging | | agriculture and oceans. | our home market, are working towards | market equities, emerging market debt, as well as | | | comparable product definitions, and we are well | Global Sustainable Equities and Dynamic Bond | We have broadened this product range with the placed to position our product range when these ESG. Article 9 products include the Global launch of the Global Ecology Bond fund in early definitions are confirmed. Ecology Growth and Diversified funds, as well as 2022. the newly launched Global Ecology Bond fund. Our sustainable investments team invests in high-quality companies that are at the forefront of leading the transition to a more sustainable A range of international products focused on Sustainability and ESG world. The team look to companies that address key societal needs such as gender and social | inequality, decarbonisation and improving access | Article 6 Article 8 Article 9 | | | | | | --- | --- | --- | --- | --- | --- | | to healthcare. | All other | Dynamic | Global Sustainable | Global Ecology | Global Ecology | | In 2021, we launched a Luxembourg-domiciled | Jupiter | Bond ESG | Equities | Growth | Bond | | SICAV vehicle for Global Sustainable Equities and | international | | | | | | the strategy saw inflows of over £200m in the | funds | | | | | | year. | | GEM Focus Emerging Market | | | Global Ecology | | | | | Corporate Bond Fund | | Diversified | European Growth Emerging Market Short Duration Bond Fund Europe ex-UK Equity Pan European Smaller Companies Europe ex-UK Smaller Companies 49Jupiter Fund Management plc | Annual Report and Accounts 2021 ### STRATEGIC REPORT ESG AND STEWARDSHIP continued ## 3. OUR CORPORATE COMMITMENTS The principle of active responsibility means that In 2019, we introduced an employee volunteering Acting with integrity we must hold ourselves to the same high scheme, allowing our people leave to support The principle of acting with integrity is embedded standards as we expect of our investee local charitable efforts, the allowance for which within our values and applies to all aspects of companies. This means acting responsibly for our was doubled the following year. Although the how we conduct ourselves. people, for our communities and for the pandemic made this more challenging, the Jupiter is a constituent part of the FTSE4Good environment. scheme will be actively promoted through 2022 Index, a group of companies adjudged to have to help our people find and support causes. This year, we are reporting in line with the UNGC scored highly in terms of transparency and quality framework, detailing how their ten principles are Jupiter has a well-established charity committee, of ESG policies, across environmental embedded throughout our activities and sponsored by a member of the Executive sustainability, relationships with stakeholders, operations. Our inaugural communication on Committee. attitudes to human rights, supply chain labour progress can be found from page 52. Over the course of 2021, Jupiter gave over standards and the countering of bribery. Our business is built on the value of our people. £200,000 to charity, the majority of which has We are a member of the Good Work Coalition. As we return to the office after almost two years been donated through Jupiter’s Give as You Earn This is an initiative run by ShareAction, focusing of intermittent remote working, the importance scheme, operated by the Charities Aid on workforce issues such as the Living Wage, of a strong culture led by inclusivity and Foundation. This scheme provides Jupiter diversity and inclusion and insecure working collaboration cannot be overstated. Full details employees with the opportunity to support the practices. on how we are supporting our people, charities of their choice either by donating a We are also an accredited London Living Wage developing our culture and promoting diversity nominated amount each month through payroll employer. Throughout the Covid pandemic, we and inclusion can be found from page 36. or through one-off donations for certain events did not furlough any of our staff and we worked or activities. Jupiter then double matches the Our CSR committee is dedicated to driving active with our contracting companies to ensure that employee contribution up to a maximum amount. responsibility across the Group. Full details of its any furloughed staff received full pay and The Company decided last year to increase the membership can be found on page 43, with its benefits. amount by 50% to £1,500 per employee per year. key activities and outcomes in the table opposite. Each year, we also work closely with a charity Recognition for our commitment to Protecting our environment partner, which is nominated and chosen by our sustainability Jupiter’s operations do not produce significant employees. The criteria for selection asked that Our commitment and expertise across levels of GHG emissions. However, we are the charity should be small enough for Jupiter to sustainability has been recognised externally this committed to operating on a net zero basis by have a meaningful impact and provide good year. | 2050, including within our operations. Details on | opportunities to engage in volunteering and fund | | | --- | --- | --- | | our current emissions and our targets can be | raising. This year, we have supported the | Jupiter was accepted as a signatory to the | | found in the TCFD section from page 45. | Momentum Children’s Charity, which supports | Stewardship Code. The FRC stated that the | | | seriously ill children and their families. | strongest areas of our submission were our | In addition to this, we have partnered with Forest overall quality of reporting on engagement, Carbon, a not-for-profit scheme providing We are proud of the imaginative activities approach to systemic risk and our disclosures woodland carbon capture projects in the UK. By organised and the enthusiastic support they covering the promotion of a well-functioning investing in woodland creation in the UK, we are received from staff in terms of participation and market. not only removing carbon emissions but also giving. Walking challenges ‘Move for Momentum’ facilitating flood alleviation, habitat creation, and ‘Miles for Momentum’ early in the year In November, the FRC published a report into employment, public access and cleaner air, supported staff health and mental wellbeing Effective Stewardship Reporting, which identified benefiting wider society. during lockdown, while also providing a chance best practice in both activities and disclosure. We for lots of employee engagement. Later in the were pleased that Jupiter was cited twice in this Supporting our communities year, a staff quiz provided an excellent report, concerning both a collective engagement opportunity as part of our return to office case study on BP plc and the manner in which we We strongly believe that we have responsibility reconnection plans. Jupiter has worked closely outlined integration of stewardship across our to positively contribute to the local communities with the charity to maximise their profile within asset classes. in which we operate, both through direct activities and through empowering our people to the business through another challenging year. Our commitment in this area also continues to be provide support. recognised by the PRI. Jupiter has been awarded Jupiter has also worked closely with two charities local to our headquarters in London, which are an A+ PRI rating for our overall strategy and making a valuable contribution to our local governance, and either A+ or A for all but one of community. We have donated plants, materials our rated investment strategies. and planters to the ‘KSP Community Garden’, a We also saw an improvement in our third-party voluntary project led by residents of the ESG rating agency scores this year. We were Westminster Cathedral Area. We have also rated as “Advanced” by Morningstar in our ESG donated gifts provided by our employees as part commitment level, one of only five asset of the Jupiter Giving Tree initiative to ‘The managers to achieve that rating. We also earned a Passage’, an organisation that has been caring for ratings upgrade from Sustainalytics, to put us homeless people in London for over 40 years. among the top four asset managers which have Our work has continued with St Andrew’s Youth achieved the most to reduce exposure to Club, a local community-based youth club which material ESG risk. aims to enrich young lives and provide an informal education to help youths contribute to society. 50 Jupiter Fund Management plc | Annual Report and Accounts 2021 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 On Boohoo, engaged with the remuneration committee to reach agreement on (supply chain) and Kingspan and Bellway (Grenfell / changes to performance conditions for their long-term incentive plan. cladding related) 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 Jupiter has embraced the changes to both working and travel practices that have travel as we consider strategy and behavioural changes arisen out of the pandemic. Staff are encouraged to use technology instead of from the pandemic travel where appropriate. We have invested in establishing an in-depth appraisal of our Scope 3 emissions Discussion centred on findings and guidance from Carbon (cat 1-14) and are developing a 1.5°C aligned pathway. We are also aligning the Intelligence on measuring Jupiter’s Scope 3 emissions reduction of our operational Scope 3 emissions with our commitment for our Scope 1 and 2 emissions to be net zero by 2030. 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 Analysis undertaken with consultant Carbon Intelligence to position interim interim net zero target 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 Creation of an internal Jupiter SFDR Article 8 framework which acts as a oversee fund categorisation and oversight of EU SFDR reference guide for investment strategies to establish positioning around the products 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 Jupiter responded to the FCA Discussion Paper in January 2022. In constructing FCA Sustainability Disclosure Regulation this response, Jupiter engaged with the FCA as part of wider industry roundtables organised by the UK Sustainable Investment and Finance Association and Latham Sustainability Disclosure Regulation & Watkins. Update from product development team regarding Although the SFDR timeline has been pushed back to 1 January 2023 work on our progress around EU SFDR rules data infrastructure, product development and client reporting has continued. Charity committee update focusing on donation target The charity committee is working towards expanding our charitable activities, to for 2022 support both charities local to our headquarters in London and those close to our regional offices. Memberships and signatories 51Jupiter Fund Management plc | Annual Report and Accounts 2021 ### STRATEGIC REPORT ESG AND STEWARDSHIP continued Human rights & modern slavery ability to assess any emerging risks of modern As an investment firm, our policies and slavery or potential human rights abuses procedures designed to combat financial crime Upholding human rights across our business anywhere within our supply chain. are of material importance to our business. model is embedded in our culture. This includes Financial crime includes money laundering, both how we treat individuals and how we During 2021, we developed a new framework, terrorist financing, bribery and corruption, tax encourage individuals within the Group to policy and code of conduct for supplier evasion and fraud. We have numerous policies interact with each other. relationships. Together, these require that ESG and procedures designed to reduce the extent factors will be considered in the evaluation of all We protect the rights of our employees through to which Jupiter’s products could be used in new providers, ensure that ESG due diligence will our employment policies and practices, which connection with financial crime and a dedicated be undertaken on a regular basis and request that prohibit discrimination and promote inclusivity. financial crime team within the compliance suppliers conform to our code of conduct. At Jupiter, diversity and inclusion remains a key department. We have committed to further work during 2022 priority for our stakeholders and an area of focus to embed ESG consideration deeper into our Taxation for the Group. More details on Jupiter’s culture range of guiding frameworks. and the ways in which we are promoting We do not tolerate tax evasion, nor do we diversity and inclusion can be found from tolerate the facilitation of tax evasion by any Working with regulators and state page 36. person acting on the Group’s behalf. We seek to authorities manage our tax affairs in a straightforward way, Jupiter began participating in the Workforce Compliance with all relevant legal and regulatory which means that we comply with our tax filing, Disclosure Initiative (WDI) in 2019. The WDI requirements is of critical importance to our reporting and payment obligations in all survey has been designed to gather information business. Our culture supports ethical behaviour jurisdictions in a timely manner. on the issues most crucial to decent work and and individual accountability. We encourage human rights in the workplace, such as evidence Our corporate structure and operating model employees to raise any concerns through our of efforts to improve health and safety ensure that our tax affairs are transparent to the confidential whistleblowing arrangements. standards, policies and practices related to tax authorities. Our approach is governed by a employee wellbeing, and actions relating to All entities within the Jupiter Group deal with Board-approved tax strategy. We ensure this supply chain management. respective regulators and state authorities in an strategy, and the procedures and controls which open and cooperative way. The Group discloses underpin our approach, are appropriate, We have due diligence procedures in place to to its regulators and state authorities anything monitored and fully implemented. All of our ensure our suppliers uphold human rights both in relating to the Group of which that regulator or employees are required to undergo training in their own organisations and, in turn, in those of state authority would reasonably expect notice. preventing the facilitation of tax evasion. their suppliers. We have worked to enhance our ### UN GLOBAL COMPACT – COMMUNICATION ON PROGRESS ### Jupiter became a signatory to the ## “Jupiter Fund Management plc remains committed ### UNGC in February 2021. Below, we ## to upholding and embedding the UNGC’s ten ### present our inaugural ## principles into our strategy, culture and day-to-day ### communication on progress, ## detailing how we incorporate the operations. We are pleased to present our inaugural ### ten principles into our business ## communication on progress within the 2021 Annual ### operations and investment ## Report.” ### strategies. Andrew Formica Chief Executive Officer February 2022 The following pages outline our ongoing support and commitment to upholding the ten principles of the UNGC in the areas of: HUMAN ANTI- LABOUR ENVIRONMENT RIGHTS CORRUPTION 52 Jupiter Fund Management plc | Annual Report and Accounts 2021 Human Rights Information Source(s) ### Principle 1: Modern Slavery Act and ### Businesses should support and respect the protection of internationally proclaimed Human Trafficking Statement. ### 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) ### Principle 2: Modern Slavery Act and ### Make sure that they are not complicit in human rights abuses Human Trafficking Statement. Procurement • During 2021, we developed a new framework, policy, and code of conduct, which together require: 2020 CSR Report – ESG to be part of any evaluation of a new provider; 2021 Stewardship Report – ESG due diligence to be undertaken for certain suppliers prior to onboarding; Whistleblowing Policy – Ongoing due diligence for certain suppliers on an annual basis; and – Suppliers to conform to the supplier code of conduct. Further information on • We have committed to further work during 2022 to embed ESG consideration deeper into our range of guiding Human Rights investment frameworks. case studies will be available • Training: During the period, we rolled out targeted human rights-focused training across the business to those in regular in the 2021 Stewardship contact with suppliers, to improve awareness and to provide employees with the tools needed to identify potential risks Report 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. 53Jupiter Fund Management plc | Annual Report and Accounts 2021 ### STRATEGIC REPORT ESG AND STEWARDSHIP continued Labour Information Source(s) ### Principle 3: 2020 CSR Report ### 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) ### Principle 4: Modern Slavery and Human ### The elimination of all forms of forced and compulsory labour Trafficking Statement 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) ### Principle 5: Modern Slavery and Human ### The effective abolition of child labour Trafficking Statement 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) ### Principle 6: 2021 Stewardship Report ### The elimination of discrimination in respect of employment and occupation Investments / stewardship: 2020 Stewardship Report • To address key labour risks associated with workforces, supply chains, human capital and diversity and inclusion, we Whistleblowing policy actively work with industry stakeholders to promote continued improvement in these areas. We are an investor Diversity & Inclusion supporter of the WDI, an UK Investor Working Group member of the 30% Club, and joined the ShareAction Good Work statement 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. 54 Jupiter Fund Management plc | Annual Report and Accounts 2021 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 ALIM) 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. - SFOR: As an approach to promoting the environmental and social agenda, Jupiter's approach to Article 8 status under SFOR 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 REERI 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 (eurosf.org) Jupiter Fund Management plc | Annual Report and Accounts 2021 55 ### STRATEGIC REPORT ESG AND STEWARDSHIP continued Anti-Corruption Information Source(s) ### Principle 10: ### Businesses should work against corruption in all its forms, including extortion 2020 CSR Report ### and bribery www.jupiteram.com/ Compliance: board-and- • Jupiter has risk-based policies and procedures in place to combat financial crime. These include but are not limited to governance/#statement- anti-money laundering (AML), sanctions, anti-bribery and corruption, fraud, market abuse and tax evasion. and-policies • 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. 2021 Stewardship Report. • 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. 56 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## NON-FINANCIAL INFORMATION ## The non-financial information required Non-financial information Section Page Business Model Our Business Model 6 ## to be disclosed under the Companies Principal risks Our Approach to Risk 60 ## Act is detailed below and certain Management ## information is included by reference to Key performance indicators Key Performance Indicators 18 TCFD Statement ESG and Stewardship 40 ## the following locations in the Annual ## Report and Accounts: Jupiter has a number of policies and statements which are in place Human Rights to support the effective governance of the organisation. For the Human We strongly support the protection of individuals’ human rights purpose of the non-financial reporting requirements these are Rights and this is embedded in our corporate values. Our employment included in the table below together with the impact and policies and practices are designed to protect our employees’ outcome for each policy. human rights. Modern Our modern slavery statement details the steps we have taken to Clients Slavery manage the risk of instances of modern slavery in our workplace Treating This Policy is to ensure that the Group consistently and throughout our supply chain. Customers embeds the principle of treating customers fairly, Data Protection This policy is designed to ensure we protect any personal Fairly which includes commitment to dealing with information that the Group may hold related to individuals. investors in its products and its discretionary Financial Crime clients honestly, openly, competently and with Anti-Bribery This policy ensures that the Group operates to high ethical integrity. and Corruption standards and complies with all applicable anti-bribery and Conflicts This policy is designed to ensure that we operate corruption laws. of Interest to high standards and take all appropriate steps to Anti-Money The Group’s AML framework is designed to ensure that it complies identify and prevent, or manage conflicts of Laundering with the requirements and obligations set out in relevant interest that may occur between the interests of and terrorist legislation, regulations, rules and industry guidance and mitigates one client and another or between the interests of financing the risk of the Group being used to facilitate financial crime. a Group company (or an employee) and clients. Anti-Tax The Group is committed to acting professionally, fairly and with Our People Evasion integrity in all its business dealings and relationships wherever it Diversity There is a Diversity and Inclusion statement for operates and implementing and enforcing effective systems to and Inclusion both the Board and the wider Company which sets counter the facilitation of tax evasion. out our approach to promoting a culture of Market Abuse The purpose of this policy is to ensure Jupiter staff observe the diversity and inclusion. proper standards of market conduct, protect the integrity of the Conduct Rules The Conduct Rules are high-level overarching markets in which we operate and do not obtain an unfair advantage requirements that apply to individuals on how from the use of inside information to the detriment of third parties they conduct themselves in relation to their who are unaware of such information. activities at Jupiter and, where relevant, their personal conduct. They are designed to ensure our Policy implementation people act with integrity and uphold the highest standards of conduct. We ensure the effective implementation of our policies by: Health and The policy is designed to protect the health, safety • fostering a culture of integrity and accountability; Safety and welfare of our employees and to provide and • clear communication of our policies through our employee induction, training, maintain safe working conditions. management briefings and our intranet, through which we make our key policies Whistle The purpose of the policy is to outline the available to our people; Blowing channels through which employees can raise issues • our governance framework, including our Board, management and reporting or concerns about the activities of Jupiter or its committees, which provide us with a robust structure within which we oversee employees. It has been adopted to foster a culture the implementation of the policies; of openness and transparency and to encourage • workforce training programmes, covering areas such as anti-bribery and employees to raise concerns of suspected corruption, money laundering, market abuse and tax evasion, which employees wrongdoing. are required to complete each year; Environment and Society • our employee handbook, which assists with contractual terms, expected conduct Environmental This policy provides a commitment to mitigate the and our policies; and direct impacts of our activities on the environment • reviewing the majority of our policies at least annually to ensure they are in line wherever possible. with best practice, meet our regulatory requirements and are updated with any Stewardship The stewardship policy details how we incorporate changes required for their effective implementation. voting, governance and sustainability considerations into our investment management The business is responsible for implementing these policies, principles and codes and process to improve the outcomes for our clients. 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 Tax Strategy This strategy ensures that we comply with our tax information on how our three lines of defence model operates, please see the Risk reporting and payment obligations in a timely section on page 60. manner and that we engage with tax authorities in a co-operative and transparent way. 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. 57Jupiter Fund Management plc | Annual Report and Accounts 2021 ### STRATEGIC REPORT STRATEGIC REPORT ## ENGAGING WITH ## OUR STAKEHOLDERS ## 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. • Investment returns net of fees. • Our ESG approach and practices. • Client service and reporting. ### CLIENTS How we engage • Primarily through our Distribution and Investment Why we engage Management teams, who are key to building Our clients are the people and firms that invest in relationships with current and potential clients. our funds and segregated mandates. We engage to • We have held virtual and physical meetings, help us understand their needs, investment conferences and road shows. objectives and priorities, and how these will evolve. • We publish podcasts and articles to What is important to them provide clients and potential clients with our insights into markets. • Investment capabilities. ## £16.5bn Gross sales What is important to them • Protecting the interests of clients. • Maintaining the integrity of markets and ensuring their smooth operation. ### STATE AND REGULATORS • How we run our business, including our Why we engage governance, control environment and ESG approach and practices. State authorities set the legal, regulatory and tax frameworks within which we operate, and regulators How we engage are responsible for supervising their respective | financial systems and the entities which operate in | • Primarily through our Risk and Compliance | | | --- | --- | --- | | them. They have an interest in ensuring we act with | and Legal teams, overseen by the | | | integrity, comply with requirements and are effective | relevant boards of directors. | | | stewards of our clients’ investments. We also engage | • Meetings with senior managers and | £117.0m | | with regulators and policy makers to help develop | Directors, where appropriate. | | Regulatory capital and understand evolving regulatory requirements. • Regular filings and submissions surplus regarding investment and business activities and certain changes thereto. • Our ESG approach and practices. • Attractive returns. • High standards of governance and effective risk management. ### SHAREHOLDERS How we engage Why we engage • Our results presentations and roadshows with Our shareholders are the people who own the investors, which are a critical part of our investor business and we rely on their support and relations programme. engagement to help us deliver our long-term • Meetings with Directors and senior strategy. Understanding their views and providing management. regular updates to them on the performance of the • Our shareholder engagement webinar, business is of key importance to the success of the which was held before our AGM, ## Company. 17.1p provided shareholders with the ability to engage with the Board of Directors Dividends paid What is important to them before voting at the AGM. • Long-term sustainable business. > 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 • Development of beneficial and effective long-term business relationships. • Prompt payment for services and commissions. • Accurate and timely information, in order to fulfil ### BUSINESS PARTNERS their obligations. Why we engage How we engage Our business partners include our distribution • Our Distribution and Investment teams engage partners (fund of funds, platforms, global financial regularly with our distribution partners through institutions, advisers, wealth managers, life meetings and briefings. companies, private banks and consultants) and our • Direct and regular contact with the relevant suppliers. They are critical to ensuring the effective business areas to which the services/goods are distribution and servicing of our products and they supplied. supplement our operational infrastructure, which • Our Procurement team who implement enables us to benefit from their expertise and scale. the governance framework for What is important to them managing the relationships. ## 10 • Direct meetings with senior • A product range which meets their clients’ managers and directors. Critical supplier requirements and delivers outperformance. relationships • Fair reward and supportive benefits package. • Our ESG approach and practices. • Flexible working arrangements. ### PEOPLE How we engage • We have an employee forum, ‘Connections’, Why we engage who feedback and discuss employee views It is our people who enable us to deliver for our clients and initiatives to support our employees. and make a positive difference in the world. We • All-employee townhalls and staff reconnection engage with them to understand their priorities which events. helps us to retain, develop, motivate and recruit • Employee surveys. talented individuals who are aligned with our culture. • Through our management structure including our What is important to them Senior Leadership Group. • Opportunities for career progression and • Our CEO holds ‘Meet the CEO development. session’ with staff from across ## 76% all areas of the business. • Working in a diverse and inclusive culture. • Our all-employee magazine. Employee engagement score • Our plans to improve and enhance the impact we have and achieve better outcomes for our stakeholders. • Our initiatives to support diversity and inclusion ### SOCIETY across the industry. Why we engage How we engage We have a responsibility to make a wider • Our Investment managers, supported by our contribution to society. This includes the effective Stewardship team, regularly hold meetings with stewardship of the assets we invest on behalf of our investee companies on ESG matters to help drive clients, which we believe is the biggest potential benefits for society. impact we can have on society. • We have direct engagement with our charitable partners, including through What is important to them our volunteering partnership scheme. ## £200k • The impact we and our investee companies have • The information we publish and our on the environment and wider society. Charitable responses to direct queries. 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 59 ### STRATEGIC REPORT 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 ## THREE LINES OF DEFENCE ### management are responsible for ### establishing and maintaining a ### strong risk management and ### compliance culture that embeds ### RISK AND FINANCE ### and supports a high level of risk ### COMMITTEE ### awareness and a strong internal The Risk and Finance Committee is ### control environment. This is FIRST LINE responsible for the oversight of the Group’s risk profile relative to its agreed ### achieved through leadership RISK AND CONTROL risk appetite. It is accountable for ### behaviours which establish the MANAGEMENT overseeing the design and operating The business functions and line managers effectiveness of the Group’s risk ### tone from the top, our governance across the Group are responsible management and capital management ### structure, a clear definition of roles and accountable for the identification, frameworks and policies, including assessment and management of the ### and responsibilities, and a robust compliance with relevant regulations. individual risks and associated ### risk management framework. controls within their respective The Committee reports material findings, areas of responsibility. recommendations and escalations to The Group has a comprehensive approach to the Executive Committee and, for identifying, monitoring, managing and mitigating certain matters, to the Audit and risk. Risk Committee. Risk governance and responsibilities The Group operates a three-tier risk governance ### SECOND LINE EXECUTIVE COMMITTEE framework, generally known as the Lines of The Executive Committee is responsible Defence model, which distinguishes between risk RISK AND CONTROL for implementing the strategy and management and risk oversight. This approach OVERSIGHT objectives set by the Board and provides a clear and concise separation of duties, Risk and Compliance, supported by additional communicated by the Chief Executive roles and responsibilities. control and oversight functions, provides Officer, and ensuring the implementation independent oversight and challenge with The Board has ultimate responsibility for respect to the first line’s management of of a sound system of internal governance, oversight of the risks of the Group and for their risks, and provides assurance that control and risk management. This determining the risk appetite limits within which the Group’s regulated activities are includes monitoring compliance with the undertaken in accordance with the Group must operate. It delegates day-to-day regulatory framework of the markets in regulatory requirements. responsibility of risk management and control which it operates. It is also responsible activities to the Chief Executive Officer assisted for implementing the Group’s culture, by the Executive Committee and the Risk and values and standards. Finance Committee, with oversight from the Audit and Risk Committee. ### The Enterprise Risk Management Framework AUDIT AND RISK THIRD LINE (ERMF) clearly defines the roles and ### COMMITTEE responsibilities for risk management and provides INTERNAL AUDIT The Audit and Risk Committee is a process for escalation through our governance Internal Audit is an independent provider responsible for reviewing and monitoring structure, which enables ongoing and robust of assurance over the effectiveness of the the integrity of the Group’s financial oversight. Group’s processes and governance with statements. It is also accountable for regards to risk and internal control, assessing whether they are adequately controlled reviewing the effectiveness of the and challenging management to Group’s risk management and its internal improve their effectiveness. control systems, oversight of the Internal Audit function and the Group’s relationship with external auditors. 60 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## ENTERPRISE RISK MANAGEMENT FRAMEWORK (ERMF) 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. 6. Key Risk 1. Risk Indicators Appetite Enterprise 2. Top-Down 5. Risk Risk Management Risk Incidents Framework Assessment 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 | 4. Operational | | 3. Risk and | | --- | --- | --- | --- | | strategic objectives and business strategy, taking into | Risk Scenario | | Control Self | | account the interests of its clients, shareholders and other | | Analysis | Assessment | 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. 4. Operational risk scenario analysis 6. Key risk indicators (KRIs) 2. Top-down risk assessment (TDRA) Operational risk scenario analysis is a forward-looking KRIs are used by the Group to provide an early signal of assessment of exposures to severe but plausible operational changing risk exposure. We set thresholds and use them to The TDRA identifies the Group’s material risks and monitors risk events. It is used by the Group to identify and quantify monitor those exposures, which informs our overall the profile of these risks. It is informed by relevant data and the material risks that have the potential to impact Jupiter, assessment of the risk. information pertinent to the specific risk category, which is based on the experience and opinions of internal subject used to assess the residual risk impact and the likelihood of Leading and lagging KRIs are employed to help identify matter experts. These are collated via a series of workshops the residual risk crystalising. trends and emerging risks which are used to inform and and are further supported by internal and external event support management decision making. The individual residual ratings applied to each risk, and the histories. A variety of scenarios (differing in nature, severity qualitative rationale, are utilised to create a consolidated and duration) is used to estimate the impact of events on The Group’s suite of KRIs is a key input into the TDRA, as view of the Group’s risk profile which is presented to the capital requirements. The Group also uses scenario analysis their performance helps in determining the view of the Risk and Finance Committee for their oversight and to ensure that we understand our exposure to high-severity Group’s risk profile. approval, before being presented to the Audit and Risk events and implement mitigating actions, in line with our Committee. risk appetite. Risk reporting Our view of the risk profile of the Group is reported 3. Risk and control self assessment (RCSA) 5. Risk incidents regularly through our governance structure to ensure it The detailed, bottom-up identification and assessment of receives an appropriately high level of senior management A risk incident is a failure of process, people or systems operational risk is performed by individual organisational and Board attention. The Board takes action where a risk is which results in an actual or potential impact. Incidents are units via an RCSA. The assessment identifies and monitors deemed to be outside of appetite. reported, recorded and investigated to determine root material risks and associated key controls by considering causes, impacts (e.g., financial losses, regulatory/legal Emerging risks the operating environment, processes, roles and breaches, etc.), themes and to ensure appropriate Emerging risks are a condition, situation or trend that could responsibilities, as well as risk incidents. Risks are assessed remediation work is completed to enhance the process, significantly affect the Group’s financial strength, on both an inherent and a residual basis with ratings improve the control environment, and make good any competitive position or reputation. These risks are raised by determined for potential impact and likelihood. Where negative outcomes that have resulted from the failure. the business and challenged to consider likelihood, impact processes or controls are seen to be insufficiently robust, Incidents are monitored and captured across the business and action required. line management is required to take appropriate action and and independently reviewed to ensure completeness and define improvements to the operating environment to accuracy. Analysis of incidents is used to support our TDRA, Emerging risks are captured through the quarterly TDRA ensure they pose a minimal (or acceptable) level of risk to RCSA and operational risk scenario analysis processes. process, as well as the RCSAs, to ensure that we are fully the Group. prepared should they begin to crystallise. 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 61 ### STRATEGIC REPORT OUR APPROACH TO RISK MANAGEMENT continued ESG risk Conduct risk ## RISK PROFILE The Group defines ESG risk as the risk that we do The Group defines conduct risk as those which The Group is exposed to various risk types in not meet our ESG obligations. The Group is can arise from action, or inaction, which results in pursuing its business objectives which can be committed to managing the direct impacts of its customer detriment, negative impact to market driven by internal and external factors. activities on the environment and has sought to stability or restricts effective competition. The Understanding and managing these risks is both a embed ESG considerations into the broader Group takes steps to mitigate the occurrence of business imperative and a regulatory requirement. governance ethos and culture of the Group. conduct risks that could have a detrimental Our taxonomy defines and describes these risks, impact on our clients, markets or Jupiter itself. providing a consistent methodology for Our wider approach to ESG and Stewardship is assessment and reporting. set out on page 40 and our approach to the Harm management of potential material climate risk is Some risks are pursued to support the business The Group recognises that harm can be the result described on page 47. plan, such as the risks relating to investment of the crystallisation of any of the risks to which performance. Other risks are inherent in routine Operational resilience risk it is exposed and takes steps to mitigate the business activities, such as the risk of financial impact on our clients, the markets in which we The Group defines operational resilience as the crime. The differing risks faced by the Group are operate and on Jupiter itself. The ERMF considers Group’s ability to prevent, adapt, respond to, documented within our taxonomy and managed both financial and non-financial impacts, which recover, and learn from operational disruption. through the Group’s ERMF in line with risk provide important insight when considering these Operational resilience addresses how the appetite. three elements of harm. continuity of the services that the Group The type and severity of the risks we face can provides are maintained regardless of the cause change quickly in a complex and competitive of disruption and helps to ensure that it is environment, therefore the framework for prepared for the inevitability of disruption, rather managing these risks is dynamic and than only trying to minimise the probability of forward-looking to ensure it considers both disruption occurring. It includes preventative current and emerging risks which could measures and the capabilities in terms of people, potentially impact the Group. processes and organisational culture to adapt and recover when things go wrong. Enterprise risk taxonomy As an asset management firm, Jupiter’s most Reputational risk material risk exposures are in the strategic, market The Group defines reputational risk as the risk of and operational (including regulatory) risk loss or other adverse impact arising from categories. However, our exposure to capital unfavourable perception of the firm on the part adequacy, liquidity, and credit/counterparty risks of customers, counterparties, employees, is also monitored to ensure they are managed on regulators, shareholders, other stakeholders, the a prudent basis and remain within regulatory media or the general public. requirements and the Group’s risk appetite. For example, reputational risk can arise as a result In addition, the Group is exposed to transversal of operational risk incidents, strategic decisions, risks, including ESG, operational resilience, or generally as a result of inappropriate behaviour reputational and conduct. These risks, and of the Group, as perceived by various stakeholder associated harm, can crystalise across multiple groups. areas within our taxonomy. We assess these risks as part of the TDRA, RCSAs and risk incidents. 62 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## 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. 2021 risk | | | Principal risks | direction | | --- | --- | --- | --- | | 9 | 1 | Strategic Risk | | | | 2 | Market Risk | | Operational Risk 3 People Risk 4 Client and Fiduciary Duty Risk 11 5 Execution, Processing and Reporting Risk 6 Product Risk 1 7 Model Risk Increasing Impact 2 8 Data Management Risk 9 Technology and Information Security Risk 3 | | 13 | | 12 | | | | --- | --- | --- | --- | --- | --- | | | | | | 10 | Outsourcing and Supplier Risk | | 6 | | 4 | | | | 10 8 11 Regulatory Risk 7 12 Legal Risk 5 13 Financial Crime Risk Increasing Likelihood Increasing Decreasing Stable The heat map reflects the principal risk types to which the Group is Regulatory risk remains an area of focus, linked to continuing regulatory exposed (as defined within our taxonomy) based on the potential impact change, and has increased during the year. The Group’s regulatory footprint and likelihood of them crystallising. We monitor all risks within the continues to evolve in line with our strategic activity, increasing in both taxonomy, as well as additional transversal risks, through our regular TDRA complexity and geography, however this area remains well understood and of our risk profile. managed. Overall, our risk profile remained stable during 2021, despite the ongoing Our exposure to market risk remains stable, and arises on seed investments headwinds from Covid-19 and we remain well-placed to adapt to further which are hedged for beta risk, where it is possible to do so. Gains and geo political challenges and the pace of global change. losses therefore generally arise from under or overperformance against a fund’s benchmark. Technology and Information Security risk, and particularly the potential threat of a cyber-attack, remains one of our most material risks; however, Understanding and managing our People risk is essential to the success of the perceived likelihood of this risk has remained stable from 2020, as we our business. This risk remained broadly stable during the year as we moved continue to invest in our control environment and seek to reduce from the relaxation of Covid-19 restrictions into our new hybrid working vulnerabilities where possible. model. Further details on the assessment of each risk are included in the tables on the following pages. Jupiter Fund Management plc | Annual Report and Accounts 2021 63 ### STRATEGIC REPORT ## PRINCIPAL RISKS Strategic Risk Market Risk Operational Risk Risk • The risk to our business as a result of • The risk of loss arising from market • The risk of actual or potential loss and matters inherent in the nature of our movements. This includes the risk that or client harm emanating from business model or the financial and any market risk mitigation techniques weaknesses or failures in our systems competitive markets in which we prove less effective than expected. and controls, related to people, systems operate. • Investment performance risk is included or processes, or from external events. • The risk of underperformance of funds under strategic risk. These include risks arising from failing to managed by the Group relative to properly manage key outsourced benchmarks, objectives or competition relationships and cyber-security. is included in this definition. • Regulatory (failure to comply with regulatory obligations) and legal risk are included in this definition. Potential • Failure to grow AUM. • Unexpected losses from seed • Impact on the Group’s operating • Loss of client confidence. investments in funds, foreign currency environment which in turn can lead to Impact exposures or interest rates on cash client dissatisfaction or harm. • Reputational damage. deposits. • Financial implications. • Loss of revenue. • Reputational damage. • Increased regulatory scrutiny if a theme or systemic failure is identified. Mitigation • The Board sets the strategy and ensures • Hedge investment to limit relative • We continue to invest in our control the organisation has the right structure, volatility across the seed capital environment and maintain efficient and leadership, culture and resources to portfolio. well-controlled processes. We operate execute it. • Seed investments, redemptions and a comprehensive ERMF which enables • The Board and Executive Committee hedging are reviewed and approved by the business to understand where risks regularly review the strategic plan, the seeding committee. lie and focus its efforts on key activities. opportunities and threats, budgets and • Regular review of control environment targets. with corrective action taken where • Independent second line oversight of required. investment risks. • We maintain a robust risk and • Progress is monitored and, where compliance culture and require all required, corrective action is taken. employees to undertake training on relevant risk matters. 2021 • Overall investment performance over • The Board continues to set aside an • See pages 65 to 66 for summaries. three years has been positive with 58% amount of seed capital to be used to Summary of mutual fund AUM performing above invest in Jupiter funds to support and the median peer group. We remain grow our investment offering. We committed to delivering superior monitor these positions regularly, and long-term investment performance and maintain appropriate hedges and limits, monitor this closely in order to ensure linked to our risk appetite, to ensure that we understand and challenge that our capital is not put at undue risk. 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. 64 Jupiter Fund Management plc | Annual Report and Accounts 2021 Operational Risk 3. People Risk 4. Client and Fiduciary Duty Risk 5. Execution Processing and Reporting Risk • The risk of failures or poor practices • The risk of inadequate client • The risk of failures related to Risk relating to people management. management including sales transaction capture, execution, misrepresentation, suitability maintenance, and reporting. 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. • Jupiter prides itself on its culture, the • The Group undertakes market testing to • We continue to invest in people, 2021 quality of its workforce and ensuring ensure the products we are creating and systems and processes to ensure that Summary that all staff feel valued and rewarded. distributing meet client needs and we are able to efficiently provide the Our culture is a key differentiator, demand. We have a robust suite of quality of services our clients expect, as enabling us to attract, motivate and policies and procedures to manage well as meet our ongoing regulatory retain talented individuals. We give client and fiduciary duty risk, which requirements. Our operating model was autonomy, coupled with personal must be followed by the business. strengthened during the year by accountability, and encourage Remote working continues to provide a consolidating a number of services and independence of thought and challenge. challenging backdrop to maintaining platforms, allowing us to better support We actively manage succession and client engagement. However, we have future growth opportunities and to succession plans are in place for critical adapted our engagement model and ensure that we are appropriately staff. developed our use of technology to operationally resilient. • We have embedded diversity and ensure we remain connected to our inclusion goals and continue to invest in clients and understand their needs. 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. 6. Product Risk 7. Model Risk 8. Data Management Risk • The risk of product flaws or defects, or • The risk of poor design or • A data risk is a potential for business Risk failure to adhere to specification. implementation of models. loss related to the governance, management and security of data. • Throughout 2021 we continued to • Models are used throughout the • Ongoing work has been undertaken to 2021 review our product offering to assess organisation to help support decision ensure that we remain able to Summary performance in line with client making and oversight of key activities. appropriately govern and manage our expectations. We have a strong product Where investment models are used, we data and that of our clients. This has development and management continually challenge the controls, included projects to enhance our framework and have developed a governance oversight and resilience to processes and systems across product robust framework to support the ensure appropriate validation is types and clients, as well as a review of implementation of SFDR and the new performed and the output is consistent our enterprise-wide data warehouse article classifications, including both and accurate. and the development of the ESG Hub. existing funds and the launch of new We continue to invest in industry- SFDR-compliant funds. As the leading tools and cloud-based data requirements of the UK Directive solutions, managed by a dedicated data become clearer, we will further develop governance team. and enhance our framework, evolving where necessary. Jupiter Fund Management plc | Annual Report and Accounts 2021 65 ### STRATEGIC REPORT OUR APPROACH TO RISK MANAGEMENT continued Operational Risk 9. Technology and Information 10. Outsourcing and Supplier Risk 11. Regulatory Risk Security Risk • The risk of deliberate attacks or • The risk of incidents or failure of • The risk of failing to comply with our Risk accidental events that have a disruptive providers of services to deliver on their regulatory obligations. This includes effect on interconnected technologies obligations, or inadequate selection or failures to implement changes required (excluding third-party failures, which are oversight of providers. to meet new regulatory requirements. covered under Outsourcing and Supplier). • Our strategy for the management of • Work has continued to ensure that our • Regulatory change remains significant as 2021 information security and cyber security overarching framework for the we continue to see a high volume of Summary continues to evolve, to ensure that delegation of activities to third parties regulatory activity across the industry vulnerabilities are identified and remains in line with regulatory alongside our expansion into new remedied as quickly as possible. We requirements. Third-party outsourcing markets, which further increases our have invested in ongoing training and remains a key part of Jupiter’s business regulatory footprint. To ensure we awareness on the risks of phishing and model, and we successfully completed remain well placed to meet these similar attacks, and we continue to work two significant migrations during the challenges, we continue to invest in with our third-party suppliers to ensure year in order to consolidate support for education, training and a robust second that they are able to demonstrate our UK and European funds. During the line function. We have a cohesive and compliance with Group standards and year, we developed a new supplier holistic approach to managing the internationally recognised good management framework, incorporating evolving landscape of regulatory risk practice. Jupiter is certified in an enhanced approach to third-party across jurisdictions and utilise industry accordance with the UK government- risk assessments, in order to ensure that insight and specialist expertise as backed Cyber Essentials Plus scheme, we are able to identify, manage and required. demonstrating our ongoing monitor our outsourced arrangements commitment to reducing the likelihood in line with internal and external of a successful cyber security attack, expectations. despite the rising number of external attacks seen across the industry. 12. Legal Risk 13. Financial Crime Risk • The risk of failing to comply with our • The risk of financial crime such as Risk legal obligations. money laundering and terrorist financing, bribery and corruption, fraud, market abuse or tax evasion. • New funds, strategies and jurisdictions • Regulatory change, delegation to third 2021 have increased the quantum and parties and geographical distribution Summary complexity of the legal risk Jupiter faces, continue to increase the complexity of specifically with our increasing presence the financial crime requirements with in the US. Through our dedicated and which we must comply. We continue to experienced legal support team we are enhance our capabilities through able to continue to support the changes to our operating model and business to navigate through these new greater use of technology where challenges and strike a balance between appropriate. maintaining a standardised business model whilst meeting both client and local geographic needs. 66 Jupiter Fund Management plc | Annual Report and Accounts 2021 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 67 ### GOVERNANCE ## CHAIRMAN’S INTRODUCTION ## TO GOVERNANCE ## “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.” Nichola Pease Chairman Dear Stakeholder requirements to ensure we have a range of How these cultural pillars have been embedded products and operate our business in a way which across the organisation and the initiatives to help Good governance is critical to the development meets their investment objectives. drive our culture has been an area of focus for of a sustainable business and leads to better the Board during the year. This has been outcomes for all stakeholders. As part of our At the 2021 Board strategy off-site held in June, particularly important in light of the remote stewardship activities, we engage with the we reviewed and refined our strategic priorities. working environment, which makes embedding companies we invest in on governance matters, a Whilst this has not changed our overall strategy, culture across the organisation more challenging. key part of which is ensuring transparency over it has sharpened our priorities. We believe that Culture was a key part of our Board strategy their governance arrangements. I am therefore delivering on these key strategic priorities (as per off-site discussions and has been monitored pleased to present our corporate governance page 16) will ensure the long-term sustainable throughout the year. The Group has a cultural report for the year ended 31 December 2021. This success of our business. Details of the key Board dashboard which provides a qualitative and report details how we have applied the provisions activities during the year, how these link to our quantitative view of our culture linked to our of the UK Corporate Governance Code and strategic priorities, principal risks and the key cultural pillars. It includes consideration of a provides an overview of our governance stakeholders impacted can be found on page 77 variety of metrics including employee survey framework and the work undertaken by the to page 80. results, employee turnover, appraisal processes, Board and its Committees during 2021. diversity and inclusion, incidents, staff training Culture Purpose and strategy and development, control effectiveness, overdue Ensuring we have a culture which supports our actions from the business control forums and It is the Board’s responsibility to set the purpose and the delivery of our strategy, whilst phishing test results. This helps the ongoing Company’s purpose and strategy. Our purpose enabling us to attract and retain the best talent, is monitoring of the Group’s culture by both the has not changed; we exist to help our clients a top priority for the Board. We have clear and Board and management. achieve their long-term investment objectives. defined cultural pillars which underpin how we This puts our clients at the centre of everything do business; they put our clients first and ensure we do and ensures our business is focused on we recognise the value of our people who work their long-term investment objectives which will collectively in order to succeed together, and evolve over time. In turn we have to evolve our that we challenge ourselves to ensure innovation business and strategy in line with their and continuous improvement. 68 Jupiter Fund Management plc | Annual Report and Accounts 2021 # 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 Jonathan 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. Jonathan 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 Jonathan 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 LO 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 Beasley, 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 included 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 Jonathan 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." Jupiter Fund Management plc | Annual Report and Accounts 2021 69 ### GOVERNANCE CHAIRMAN’S INTRODUCTION TO GOVERNANCE continued Subsidiary governance Stakeholder engagement At the 2021 AGM we had one resolution which received less then 80% approval. Resolution 14, As a Group with multiple regulated entities in Engaging with our stakeholders and understanding which provides Directors with the authority to various jurisdictions, we have a corporate their views about all aspects of our business is allot shares in the Company, passed with almost governance framework which applies across our critical to our success. We have had to continue 78% of votes in favour. This result was primarily organisation, including with respect to such to adapt our way of engaging due to the global driven by our largest single shareholder, who we regulated subsidiaries. The boards of our pandemic and changing restrictions but further have engaged with both pre- and post- the AGM, regulated management companies based in the information on how Jupiter engages with and we understand their views regarding UK, Luxembourg and Ireland all have independent stakeholders can be found on page 58 to page 59 potential dilution of their shareholding. However, Non-Executive Directors appointed, who bring and the Board’s engagement and how stakeholder the authority we seek is lower than the maximum valuable industry and governance experience, as interests have been considered in key decisions recommended levels contained within the UK well as supporting the broader oversight of our on page 81 and page 82. Investment Association’s share capital regulated activities, with a focus on serving our The Board has engaged with Connections, our management guidelines and prevailing voting client’s best interests. These entities leverage our employee forum, to hear directly from our guidelines of leading corporate governance Group governance framework and receive regular people on their views of the firm’s culture, agencies. The majority of our shareholders are reporting and recommendations from our strategy and business operations. We have supportive of the authority sought which is in line governance committees, to enable them to completed two employee surveys at the start with standard market practice in the UK. discharge their legal and regulatory and the end of 2021. We were disappointed that a responsibilities with respect to Jupiter products We believe that this authority is important to number of metrics, particularly on engagement, and activities within their remit. We are holding a provide the Directors with flexibility in the capital had decreased between these surveys. The strategy day, for the independent Non-Executive management of the Company and would only results of the survey are being discussed with the Directors across all of Jupiter’s legal entities and exercise this authority if it were considered in the Connections forum and management are our key fund Boards in March 2022. This will best interests of shareholders. We are therefore implementing action plans to address items raised enable all of our Non-Executive Directors to seeking approval for the Directors to have the in the survey. This is particularly focused on further engage on the Group’s strategy and authority to allot shares in line with previous communication across the organisation, which priorities whilst receiving updates from across years. has understandably been impacted by the remote the business. working environment. Progress against these We hope to hold an in-person AGM this year, but plans will continue to be a focus of the Board we will also arrange for a live audio-cast so Legal and regulatory throughout the year. shareholders have the opportunity to listen to The legal and regulatory landscape in which we the meeting and ask questions, without being Due to the pandemic, we were once again not operate is becoming increasingly complex. This is physically present, should that be their able to hold our AGM in person. In order to in part as we expand our business internationally preference. Due to the continued uncertainty we provide our shareholders with the opportunity to and are subject to new requirements, for instance ask our shareholders to review our hear presentations and ask the Directors our registration with the SEC in the US, but also announcements and Company website, for any questions before they were required to submit due to the pace of regulatory change across all changes to the proposed arrangements. their proxy votes, we held a shareholder the jurisdictions in which we operate. Our Legal engagement webinar in advance of the AGM. This will be my first in-person AGM since my and Risk & Compliance teams help us to ensure Andrew Formica and I, as CEO and Chairman, appointment as Chairman and I hope to have the that we comply with these evolving requirements gave the presentations which would have been opportunity to meet with our shareholders and and engage with regulators in an open and provided at the AGM and all Directors attended discuss our business. transparent manner. to answer any shareholder questions. The webinar was held two weeks before the formal | AGM and details of the shareholder engagement | Nichola Pease | | --- | --- | | webinar were contained within the Notice of | Chairman | | AGM and were also available on the Company’s | 24 February 2022 | website. The formal AGM was then held as a closed meeting with the quorum requirements being met by the Chairman and Company Secretary. 70 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## COMPLIANCE STATEMENT ## 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. 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. Page Code principle 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 72 success of the company, generating value for shareholders and contributing to wider society. The board should establish the company’s purpose, values and strategy, and satisfy itself that these and its culture are aligned. 68 All directors must act with integrity, lead by example and promote the desired culture. The board should ensure that the necessary resources are in place for the company to meet its objectives and measure performance against 77 them. The board should also establish a framework of prudent and effective controls, which enable risk to be assessed and managed. In order for the company to meet its responsibilities to shareholders and stakeholders, the board should ensure effective engagement with, 58 and encourage participation from, these parties. 81 The board should ensure that workforce policies and practices are consistent with the company’s values and support its long-term sustainable 36 success. The workforce should be able to raise any matters of concern. 57 Division of Responsibilities The chair leads the board and is responsible for its overall effectiveness in directing the company. They should demonstrate objective 77 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. The board should include an appropriate combination of executive and non-executive (and, in particular, independent non-executive) 76 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. Non-executive directors should have sufficient time to meet their board responsibilities. They should provide constructive challenge, 89 strategic guidance, offer specialist advice and hold management to account. The board, supported by the company secretary, should ensure that it has the policies, processes, information, time and resources 77 it needs in order to function effectively and efficiently. 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 86 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. The board and its committees should have a combination of skills, experience and knowledge. Consideration should be given to the length of 86 service of the board as a whole and membership regularly refreshed. Annual evaluation of the board should consider its composition, diversity and how effectively members work together to achieve objectives. 85 Individual evaluation should demonstrate whether each director continues to contribute effectively. Audit, Risk and Internal Control The board should establish formal and transparent policies and procedures to ensure the independence and effectiveness of internal and 91 external audit functions and satisfy itself as to the integrity of financial and narrative statements. 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 60 principal risks the company is willing to take in order to achieve its long-term strategic objectives. Remuneration Remuneration policies and practices should be designed to support strategy and promote long-term sustainable success. Executive remuneration 102 should be aligned to company purpose and values, and be clearly linked to the successful delivery of the company’s long-term strategy. A formal and transparent procedure for developing policy on executive remuneration and determining director and senior management 102 remuneration should be established. No director should be involved in deciding their own remuneration outcome. Directors should exercise independent judgement and discretion when authorising remuneration outcomes, taking account of company and 102 individual performance, and wider circumstances. Jupiter Fund Management plc | Annual Report and Accounts 2021 71 ### GOVERNANCE GOVERNANCE ## BOARD OF DIRECTORS As at 31 December 2021 | | NC | RM | | AR | NC | | AR | NC | RM | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 1. NICHOLA PEASE | | | 4. DAVID CRUICKSHANK | | | 7. KARL STERNBERG | | | | | Non-Executive Chairman | | | Independent Non-Executive Director | | | Independent Non-Executive Director | | | | | | | AR | NC | | AR | NC | | --- | --- | --- | --- | --- | --- | --- | | 2. ANDREW FORMICA | 5. DALE MURRAY | | | 8. POLLY WILLIAMS | | | | Chief Executive Officer | Independent Non-Executive Director | | | Independent Non-Executive Director | | | NC RM ### 3. WAYNE MEPHAM 6. CHRIS PARKIN 9. ROGER YATES 1 Chief Financial Officer Non-Executive Director Independent Non-Executive Director 1. Nominated representative of TA Associates 72 Jupiter Fund Management plc | Annual Report and Accounts 2021 | 1. NICHOLA PEASE | NC | RM | 4. DAVID CRUICKSHANK | AR | NC | 7. KARL STERNBERG | AR | NC | RM | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Appointed | | | Appointed | | | Appointed | | | | | Non-Executive Chairman in March 2020 | | | Independent Non-Executive Director in June 2021 | | | Independent Non-Executive Director in July 2016 | | | | | Skills and experience | | | Skills and experience | | | Skills and experience | | | | | Nichola has over 35 years’ experience in asset management, | | | David Cruickshank spent his executive career at Deloitte and | | | Karl brings some 30 years’ international experience in the | | | | | including at Chief Executive level, and the wider financial | | | retired from the firm in June 2020. He qualified as a Chartered | | | investment industry gained through both executive and | | | | | sector. With her extensive experience, Nichola brings strong | | | Accountant in 1982 and specialised in advising on large | | | non-executive roles. | | | | | leadership skills and a deep understanding of investment | | | international corporate transactions. He was appointed a | | | | | | | Previous appointments management to the Board. partner in 1988 and led the UK Tax Practice from 1998 until Karl was a founding partner of institutional asset manager 2006. He was elected Chair of Deloitte’s UK Board in 2007 and Previous appointments Oxford Investment Partners, which was bought by Towers served two terms before being elected Chair of Deloitte’s Nichola’s most recent role was as an independent Watson in 2013. Prior to that, Karl held a number of positions Global Board in 2015. During this period David led the Boards Non-Executive Director of Schroders plc from September at Morgan Grenfell/Deutsche Asset Management between through a period of major regulatory change and business 2012 to November 2019, where she was also Chairman of the 1992 and 2004 including Chief Investment Officer for London, transformation and has broad experience across different Remuneration Committee. She was previously the Chief Australia, Europe and the Asia Pacific. Since 2006 he has industry sectors and geographies. Executive of J O Hambro Capital Management Ltd from 1998, developed his Non-Executive Director career, with a focus on until her appointment as Deputy Chairman in 2008. Her Previous appointments investment management and the investment trust sector in previous experience includes Kleinwort Benson, Rowe David is the former Chairman of Deloitte’s UK Board and then particular. From 2010 to 2015 he was a Non-Executive Director Price-Fleming, Citibank and Smith New Court where she built Deloitte’s Global Board and previously served as Co-Chair of of Friends Life Group plc where he was Chairman of the the European broking business and subsequently joined the the Partnering Against Corruption Initiative at the World Investment Oversight Committee. Karl was Chairman of | Board. | Economic Forum. | JPMorgan Income & Growth Investment Trust plc until | | --- | --- | --- | | Current external appointments | Current external appointments | November 2016. | | Nichola is currently Chair of the Investment20/20 | David is the current Chair of the Social Progress Imperative | Current external appointments | | Apprenticeship Scheme and Jumo Ltd. | Inc and the Education and Employers charity. He is also a | Karl is Chairman of Monks Investment Trust plc and Clipstone | | | member of the Council of the Institute of Chartered | Industrial Reit plc and a Non-Executive Director of Herald | | 2. ANDREW FORMICA | Accountants of Scotland. | Investment Trust plc, JPMorgan Elect plc and Howard de | Walden Estates. Appointed ### 5. DALE MURRAY AR NC Chief Executive Officer in March 2019 ### 8. POLLY WILLIAMS AR NC Appointed Skills and experience Independent Non-Executive Director in September 2021 Appointed Andrew has over 27 years’ experience in the investment management industry and is a qualified actuary, both in Skills and experience Independent Non-Executive Director in March 2015 Australia and in the UK. He brings strong leadership skills and Dale Murray is a qualified accountant and technology Skills and experience has a proven track record of implementing successful entrepreneur who co-founded the British mobile telecoms Polly has a wealth of relevant experience, including roles with business strategies. software business Omega Logic. Following Omega Logic’s sale particular responsibility for audit and risk oversight, and is a to Eposs Ltd, then First Data Corporation, Dale served as CEO chartered accountant. Previously, Polly was a partner at Previous appointments of the enlarged Group until 2005. She then made a number of KPMG, with responsibility for the Group Audit of HSBC Before joining Jupiter Andrew was CEO of Henderson Global investments in the digital sector and was awarded the British Group plc. Polly has significant, recent and relevant financial Investors, becoming Co-Chief Executive of Janus Henderson Angel Investor of the Year in 2011. experience which is invaluable in her role as Chairman of the on the merger with Janus Capital in 2017. During his time at Henderson and its predecessor businesses he held various Previous appointments Audit and Risk Committee. She actively engages with senior roles including equity fund manager and head of equities. Dale was previously a Non-Executive Director at Peter Jones management outside of the Board meeting cycle. Foundation, UK Trade & Investment, Sussex Place Ventures Previous appointments Current external appointments Ltd and the Department for Business, Innovation and Skills. Polly’s previous Non-Executive Directorships include TSB Andrew is currently a Non-Executive Director of Hammerson plc and of the Investment Association. Current external appointments Banking Group plc, Worldspreads Group plc, APS Financial Dale currently serves as a Non-Executive Director of Xero Limited, Z Group plc, National Counties Building Society (as Limited, Lendinvest plc, The Cranemere Group Limited, Rated Chairman), Scotiabank Ireland Limited and Daiwa Capital ### 3. WAYNE MEPHAM People Limited and Lightspeed Commerce Inc. Markets Europe Limited. Appointed Current external appointments Chief Financial Officer in September 2019 ### 6. CHRIS PARKIN Polly is a Non-Executive Director of RBC Europe Limited, XP Skills and experience Power Limited and the Rugby Football Union, where she Appointed Wayne has over 26 years’ experience in the asset Chairs the Audit and Risk Committee. Polly also serves as a Non-Executive Director in July 2020 management and across the financial services sector gained in Trustee of the Guide Dogs for the Blind Association. senior financial roles and as a chartered accountant. Skills and experience Chris Parkin has 15 years of experience in the private equity Previous appointments NC RM ### 9. ROGER YATES industry with a primary focus on financial services companies, Wayne began his career at PricewaterhouseCoopers where particularly in fund management, wealth management and Appointed he progressed to lead audits in the Insurance and Asset insurance, as well as on consumer facing business, including Senior Independent Director in May 2021 Management practice. Prior to joining Jupiter, he worked at education services, consumer goods and retail. He brings Independent Non-Executive Director in October 2017 Schroders for nine years and was responsible for the Global detailed knowledge of the financial services sector with a Finance function as well as Procurement and Investor Skills and experience strong client focus and significant experience of business Relations. Roger has considerable knowledge of the asset management transformation. Current external appointments business with over 30 years’ experience in the industry having Previous appointments served as a fund manager, senior executive, Non-Executive Wayne has no external appointments. Before joining TA Associates, Chris was an investment Director and Chairman. Having led two global asset managers, manager at Lazard Private Equity and prior to that he spent Roger also brings significant understanding of international seven years with Bain & Company in London and New York. business management to the Board. Chris’ previous Non-Executive Directorships include, amongst Previous appointments others, DNCA Finance, PhysIOL, Internationella Engelska Roger started his career at GT Management in 1981 and Skolan and Hana Group. Chris also served on the Board of subsequently held positions at Morgan Grenfell and Invesco Jupiter Fund Management from 2007-2010 and Merian Global as Chief Investment Officer. He was appointed Chief Investors until early 2021. Executive Officer of Henderson Group plc in 1999 and led the Current external appointments company for a decade. Most recently Roger was a Chris is co-head of TA Associates’ EMEA Services Group and is Non-Executive Director of IG Group Ltd, Chairman of Electra a Non-Executive Director of Inspired Education Holdings Private Equity plc and Chairman of Pioneer Global Asset Limited, Biocomposites, Surfaces Group, Fairstone Group Ltd, Management S.p.A. He was also a Non-Executive Director of Soderberg and Partners, and Nactarome. 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. AR AR Member of Audit and Risk Committee RM Member of Remuneration Committee NC Member of Nomination Committee Denotes Chair of Committee Jupiter Fund Management plc | Annual Report and Accounts 2021 73 ### GOVERNANCE ## EXECUTIVE COMMITTEE As at 24 February 2021 ### 1. ANDREW FORMICA 3. MATTHEW BEESLEY 5. TRACEY KINSELLA Chief Executive Officer and Chairman Chief Investment Officer HR Director of the Executive Committee Matthew joined Jupiter in January 2022 as Chief Investment Tracey joined Jupiter in October 2021 as HR Director. Responsible for the strategic development of the Group and Officer. He was previously Chief Investment Officer at Previously, Tracey was Head of HR and Internal for the management of the overall business. Artemis and has held senior investment roles at GAM and Communications at Architas and also held senior HR positions Henderson Global Investors. Matthew is responsible for the at AXA UK and Ireland, Amazon and Nokia. Tracey is See page 73 for Andrew’s full biography. oversight of all of Jupiter’s investment teams and key areas responsible for the global HR function at Jupiter, which such as stewardship, data science and dealing. includes reward and SMCR. ### 2. WAYNE MEPHAM 4. KATHARINE DRYER 6. VERONICA LAZENBY Chief Financial Officer Deputy Chief Investment Officer Chief Risk Officer Responsible for financial management, capital management, Katharine joined Jupiter in December 2013 as Head of Veronica joined Jupiter in February 2020 and is the Group’s tax, investor relations, financial regulatory reporting, HR, and Investments, Fixed Income and Multi-Asset and was Chief Risk Officer. Before joining Jupiter she held senior risk strategy and corporate development. appointed Deputy CIO in October 2018. Before Jupiter management roles at Schroders, Royal Bank of Scotland, Katharine worked as a managing director in BlackRock’s Euro Barclays and BNY Mellon. She is responsible for the See page 73 for Wayne’s full biography. Fixed Income and Multi-Asset Client Solutions teams. Prior to management of the Group’s risk profile and compliance this, she worked at Morgan Stanley and Deutsche Asset function. Management, where she was a fixed income specialist. 74 Jupiter Fund Management plc | Annual Report and Accounts 2021 ### 7. PAULA MOORE 9. JASVEER SINGH 11. PHIL WAGSTAFF Chief Operating Officer General Counsel Global Head of Distribution Paula joined Jupiter in 1997 and has held many senior roles Jasveer joined Jupiter in November 2016 as General Counsel. Phil joined Jupiter in June 2019 as the Global Head of within the Group. She is the Chief Operating Officer and is Before joining Jupiter he was General Counsel and a member Distribution. He was previously Global Head of Distribution at responsible for the Group’s day-to-day operations including of the Executive Committee at Man Group. He is responsible Janus Henderson and has held senior distribution roles at operations, IT and the facilities teams. for the legal, governance & secretariat, Luxembourg and Irish Gartmore, New Star and M&G. Phil is responsible for the teams. distribution of all of Jupiter’s products, which includes management of the distribution, marketing and communication teams. ### 8. MINESH PATEL 10. WARREN TONKINSON Head of Strategy and Corporate Deputy Global Head of Distribution Development Warren previously served as the Global Head of Distribution Minesh joined Jupiter in July 2019 as the Head of Strategy and for Merian Global Investors and joined Jupiter upon the Corporate Development. Before joining Jupiter he was Head completion of the acquisition of Merian. He joined as Jupiter’s of Corporate Development at Janus Henderson and Distribution Managing Director and was appointed Deputy previously held roles at Man Group and Merrill Lynch. Minesh Global Head of Distribution in October 2021. Prior to his role oversees strategic initiatives and corporate development at Merian, Warren was Managing Director at UBS Global Asset across the Group. Management. Jupiter Fund Management plc | Annual Report and Accounts 2021 75 ### GOVERNANCE ## OUR GOVERNANCE FRAMEWORK ## 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 • Overseeing financial reporting, including approving the Annual Report and interim financial statements • Setting the Group’s purpose, culture and values • Ensuring adequate succession planning, including agreeing Board and other senior • Approving significant capital projects, expenditure and borrowings appointments and the appointment or removal of the Company Secretary • Overseeing the Group’s operations and management, and maintaining an effective • Deciding major acquisitions, disposals and investments system of internal controls and risk management The full schedule of matters reserved for the Board can be found on our website at • Setting the annual budget www.jupiteram.com. • Approving the dividend policy and dividend payments BOARD Chairman Chief Executive Chief Financial Senior Independent Independent Non- Officer Officer Director Executive Directors • Leads the Board, ensuring its • Proposes the strategy and • All aspects of financial and • Sounding board for the • Contribute to and effective discharge of duties ensures its execution capital reporting and the Chairman constructively challenge integrity thereof management on the • Supports the CEO in the • Runs the business within the • Leads the Chairman’s development and execution of duties delegated authorities, risk • Supports the CEO in the performance appraisal and implementation of the management and internal execution of the strategy succession • Ensures effective governance strategy control frameworks • Responsible for Investor • Available to shareholders, • Engages with stakeholders and • In conjunction with • Builds and maintains an Relations, HR and should they have concerns ensures their views are management, establish the effective management team Procurement teams not resolved through normal understood by the Board and Board’s risk appetite and channels decisions consider their monitor the control interests framework • Constitute the Board’s governance committees Executive Committee Audit and Risk Remuneration Nomination • Operates under the authority Committee Committee Committee and direction of the Chief • Board Committee comprises • Board Committee comprises • Board Committee comprises all Executive Officer and four independent Non- two independent Non- independent Non-Executive comprises senior management Executive Directors Executive Directors and the Directors and is chaired by the from key functions Chairman of the Board, who Chairman of the Board • Responsible for overseeing • Responsible for the operational was independent on financial reporting, risk • Recommends changes to the and financial performance of appointment management and internal structure of the Board, oversees the Group control framework, compliance • Responsible for overseeing the succession planning for the • Formulates strategy and agrees and external and internal audit remuneration of Executive Board and senior management, business plans, budgets, policies Directors, senior management and talent and diversity policies • Read how we are delivering our and procedures for the and Group-wide policies across Jupiter priorities from page 91 day-to-day management of the • Read how we are delivering our • Read how we are delivering our Group priorities from page 102 priorities from page 86 • The Executive Committee has delegated certain authorities to a number of operating Committees under the Group’s governance framework 76 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## BOARD ACTIVITIES ## 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. In addition to the five scheduled meetings the The Board also held a two-day strategy off-site in greater understanding of the relevant business Board held two additional meetings which were June which provided the opportunity for a unit and help the Executives to gain a better convened to consider certain ESG-related and deep-dive review on key strategic items, industry understanding of the Board and its objectives and product development matters. Polly Williams was trends and our culture. A Board briefing session is views. The Senior Independent Director has also not able to attend one of the ad-hoc meetings held in the day or so before a Board meeting and met with other Directors to evaluate the due to prior commitments, but read all papers these sessions are designed to assist with Director Chairman’s performance. and provided input outside of the meeting. training and knowledge of the business. Further At each meeting the Board receive an update Director Meetings attended information can be found within the Director from the CEO, CFO, CIO, Head of Distribution Nichola Pease 7/7 training and induction section on page 83. and COO, which considers the performance of | Jonathon Bond 3/3 | The Chairman has held meetings with just the | the relevant business area and any key areas of | | --- | --- | --- | | Edward Bonham Carter 3/3 | Non-Executive Directors, some of which included | focus. The CEO also provides fortnightly updates | | David Cruickshank 4/4 | the CEO. Individual Non-Executive Directors have | to the Board members on developments within | | | also met with senior members of management on | the business and any matters to raise to the | Andrew Formica 7/7 an individual basis. This engagement has been Board’s attention. Wayne Mepham 7/7 supported by the Company’s Non-Executive Dale Murray 3/3 Director pairing system, under which each Chris Parkin 7/7 Non-Executive Director is paired with a member Karl Sternberg 7/7 of the Executive Committee. They hold between Polly Williams 6/7 four and six meetings a year and the scheme is Roger Yates 7/7 designed to give the Non-Executive Directors Key Link to core objectives Link to principal risks Relevant stakeholder group Strategic Risk 1 Investment performance 1 1 Clients Market Risk 2 Client relationships 2 2 People Operational Risk 3 Investment offering 3 Shareholders 3 People Risk Business partners and 4 Talent and Culture 4 suppliers 4 Client and Fiduciary Duty Risk 5 Operating model 5 Society 5 Execution, Processing and Reporting Risk 6 Financial resources 6 State and regulators | 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 | Jupiter Fund Management plc | Annual Report and Accounts 2021 77 ### GOVERNANCE BOARD ACTIVITIES continued Item Outcomes Link to core objectives and principal risks Stakeholders Strategy and Business Development | Strategy | Agreed the agenda for the 2021 Board two-day offsite, which | ALL | | | | | | --- | --- | --- | --- | --- | --- | --- | | | | | 1 | 2 | 3 | 6 | | development | focused on the key opportunities for growth and risks facing the | | | | | | | | business. Discussed the current strategy in light of the wider market | 1 | | | | | environment. | ESG-related | Approved participation in the NZAM initiative, UNGC and Good | | | | | | ALL | | --- | --- | --- | --- | --- | --- | --- | --- | | | | 1 | 3 | 5 | | | | | initiatives | Work Coalition. Agreed the initial targets for the net zero initiative | | | | | | | | | and challenged management’s approach to ensuring the Company | 1 | 3 | 4 | 10 | 11 | | > See page 40 for and its investments were net zero by 2050. further information 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. | Strategic growth | Approved additional investments in key growth areas for the | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 1 | 2 | 3 | 4 | 6 | 1 | 2 | 3 | 4 | 5 | | initiatives | business including sustainability, fixed income and institutional | | | | | | | | | | | | | business, and received regular updates on the implementation | 1 | | | | | | | | | | thereof. Distribution Received regular reports from the Head of Distribution on sales 2 3 1 3 4 6 activities and flows. Considered the re-brand of Jupiter and Merian under the refreshed 1 4 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. Growth funds Received updates on business plans for funds identified as key to the 1 3 6 1 2 3 Group’s growth plans and ensured suitable resources were deployed | | to support the teams. | 1 | 3 | 4 | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | NZS Capital | Received an update on the NZS Capital strategic partnership and | | | | | | | | | | | 1 | 3 | 5 | 6 | | 1 | 3 | | business | reviewed progress against the original business plan. | | | | | | | | | update | | 1 | 4 | | | | | | | Institutional | Reviewed the Group’s global equity strategies, suitability for client | | | | | | | | | | | 1 | 2 | 3 | 4 | 6 | 1 | 3 | | Global Equity | types and potential thematic investing opportunities. | | | | | | | | | | | 1 | 4 | | | | | | 78 Jupiter Fund Management plc | Annual Report and Accounts 2021 Item Outcomes Link to core objectives and principal risks Stakeholders Performance | Monitored financial | Ongoing monitoring of financial performance including revenue, | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | 5 | 6 | 1 | 2 | 3 | 6 | | performance and | profit and cost forecasts against budget and KPIs, and considered | | | | | | | | capital position | performance against market consensus. | 1 | 2 | | | | | 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. | Investment | Regularly reviewed investment performance across all fund ranges | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 1 | 3 | | | 1 | 3 | 4 | 6 | | performance | and investment trusts, and assessed funds against expected | | | | | | | | | | | performance outcomes in light of the market environment. | 1 | 2 | 4 | 13 | | | | | Received presentations from a range of fund managers. Capital and Considered, challenged and approved a revised capital and dividend 1 3 6 dividend policy 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. | 2022 Budget and | Challenged and approved the 2022 budget and five-year financial | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | 3 | 4 | 5 | 6 | 2 | 3 | | five-year financial | plan, having reviewed the underlying assumptions for net flows, | | | | | | | | plan | revenue margins, investment performance, costs and various scenario | 1 | 2 | 3 | 4 | | | analysis including consideration of the impact of growth initiatives. Merian integration Oversaw the integration of Merian into the Jupiter Group, including ALL 1 2 3 4 6 product changes and the rationalisation of suppliers. 1 3 4 5 People & Culture Culture Assessed and monitored culture through regular updates from the ALL ALL CEO, Connections Chairman, employee surveys and dedicated ALL culture and people updates from the HR Director, which included an update on the structures implemented to support staff during the pandemic. | Employee | The Board engaged with the Chair of Connections, the Group’s | | | | | --- | --- | --- | --- | --- | | | | 4 | | 2 | | engagement | employee forum, to discuss employee views and the Non-Executive | | | | | | Directors also met privately with the Connections Chair. | 3 | | | | Diversity and | The Board reviewed the plans to improve diversity across the | | | ALL | | | | 2 | 4 | | | inclusion | business and ensure an inclusive culture for our people and other | | | | | | stakeholders. The Board considered the diversity targets and progress | 3 | | | thereon. Covid related Reviewed and agreed the plans for staff to return to the office and 4 1 2 4 6 approved the new ongoing hybrid working model. Discussed impacts to the operating model and the initiatives to support staff during the 3 pandemic and approved a £1,000 allowance for 2021 to all staff for home office equipment. Director Approved the appointment of two new Non-Executive Directors. ALL ALL appointments ALL Risk Management > For further information see the Audit and Risk Committee Report starting on page 91 Jupiter Fund Management plc | Annual Report and Accounts 2021 79 ### GOVERNANCE BOARD ACTIVITIES continued Item Outcomes Link to core objectives and principal risks Stakeholders Risk Appetite Reviewed, challenged and approved the revised Risk Appetite ALL ALL Statement Statement and associated metrics. ALL Enterprise Risk Reviewed, challenged and approved the revised Enterprise Risk ALL ALL Management Management Framework which included a new risk taxonomy further ALL Framework aligned to the Group’s operations. Principal and Discussed the principal and emerging risks and reviewed and ALL ALL Emerging Risks approved the risk management disclosures in the annual and interim ALL reports as recommended by the Audit and Risk Committee. Assessed Reviewed the effectiveness of the internal control environment | | | 5 | 1 | 2 | 3 | 4 | 6 | | --- | --- | --- | --- | --- | --- | --- | --- | | effectiveness of | including consideration of risk incidents, the output from the risk and | | | | | | | | internal controls | control self-assessment, compliance and internal audit findings. There | | | | | | | ALL was specific consideration of the internal control operation in light of the remote working environment. Governance | Investment | Received an update on the governance processes in place to ensure | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 1 | 2 | 3 | 4 | 5 | 1 | 2 | 3 | 6 | | oversight | appropriate oversight of investment management. This included | | | | | | | | | | | | consideration of the structure of the Group’s Unlisted Assets | 1 | 4 | 6 | 13 | | | | | | 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. Board Evaluation Reviewed and discussed the results from the annual Board evaluation ALL ALL and agreed action plans. > For further information please 1 see page 85 Health and Safety Received an update on health and safety across the Group, with a 4 2 focus on steps taken to welcome our people back to the office safely. 3 Tax Strategy Reviewed and approved the Group’s tax strategy and the publication ALL 6 thereof. 13 External Reporting > For further information see the Audit and Risk Committee Report starting on page 91 | Annual Report & | Reviewed and approved the 2020 Annual Report and 2021 interim | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | 1 | 2 | 3 | 5 | 6 | | interim results | results. | | | | | | | | | | Appointment of | Resolved to recommend to shareholders the appointment of EY as | | | | | | | | | | | | 5 | | | 1 | 2 | 3 | 5 | 6 | | auditors | the Group’s external auditors with effect from the year ending 31 | | | | | | | | | | | December 2023, as per the Audit and Risk Committee’s | 10 | 11 | 12 | | | | | | recommendation. ICAAP Reviewed and approved the Group’s ICAAP. ALL 3 6 80 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## CONSIDERING STAKEHOLDERS ## IN DECISION MAKING 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 ## CLIENTS PEOPLE SHAREHOLDERS How does the Board engage? How does the Board engage? How does the Board engage? The Board has primarily delegated Jupiter has an established employee forum Jupiter has a dedicated Investor Relations responsibility for client engagement to Senior ’Connections’, which is the primary method of department who are responsible for running a Management and our Distribution and Fund workforce engagement. The Chairman of programme of shareholder events. Our CEO Management teams. At each meeting the Connections meets with the Board, the and CFO provide Board representation at the Board receives updates from our Global Head Remuneration Committee and separately with majority of shareholder meetings. We have of Distribution and CIO which includes only the Non-Executive Directors present. engaged with shareholders to seek their views information on client engagement and views. Our CEO regularly attends Connections on the preferred method of returning capital The CEO meets with a variety of clients and meetings and the forum also engages directly to shareholders and it is our intention that provides updates to the Board on these with the Executive Committee. During the future returns of capital will be through a engagements. We also receive updates year, due to the ongoing challenges presented share repurchase programme. Our Chairman directly from our clients, who attend and by the global pandemic, we undertook two engages with major shareholders on speak at Board briefings and internal employee surveys and the Board and governance matters and the Chairman of the governance committees and forums, where Executive Committee have reviewed and Committees meet with shareholders when appropriate. discussed the results and proposed action appropriate or requested. All parties report plans to address identified issues. 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 81 ### GOVERNANCE BOARD ACTIVITIES continued How are stakeholder interests ## KEY BOARD DECISIONS considered? We believe that, in order to be managed and Growth strategy Net zero considered effectively, stakeholder interests | need to be embedded across all levels of the | The Board approved additional investments in | The Board decided to join the NZAM initiative | | --- | --- | --- | | organisation. This means that decisions taken | key areas of the business in order to drive the | and have committed to achieving net zero | | below Board level also consider the interests of | Group’s growth agenda. | emissions by 2050 across all of our | | our stakeholders and help to ensure the | | investments and operations. The Board also | In reaching this decision the Board considered appropriate escalation of stakeholder reviewed and agreed the proposed initial the following stakeholder groups: considerations through the Group’s governance targets under the NZAM initiative, further 1 2 3 information on which can be found from page framework. Our culture, values, governance framework, code of conduct and training all help 45. These investments were a key decision taken to support this. In reaching this decision the Board considered by the Board to promote the success of the | At a Board level, the Board considers and | Company for the benefit of our shareholders, | the following stakeholder groups: | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | discusses information from across the Group to | people and wider stakeholder groups. The | | | | | | | | | | 1 | 2 | 3 | 4 | 5 | 6 | | understand the impact of its decisions. | decision to invest in organic growth does | | | | | | | | | reduce the amount of profit available for | Environmental matters are an increasingly | | | | | | This includes regular reporting on the Group’s distribution to our shareholders in the short material issue for all of our stakeholders, from performance, key risks and legal and regulatory term; however, over the longer term we our clients who want to invest in a sustainable compliance. Where decisions are taken, the believe the investments will deliver far greater way, to our people who want to work for a impacts to different stakeholders are clearly growth and returns for shareholders. We have company which has a positive impact on the identified within Board papers and discussed by focused our investments in areas which are world. This view is shared by our shareholders, the Board. important to our clients, such as enhancing business partners and regulators. Stakeholders can have different and sometimes our clients’ servicing abilities and ESG matters. In making this decision the Board carefully competing interests, priorities and views, and considered the views of our stakeholders and these need to be balanced with each other and all potential implications for this complex within the wider duty of the Board to promote area, including potential impacts to the long-term sustainable success of the investment performance, the costs of Company. Not all decisions can deliver the implementation for our investee companies desired outcomes for all stakeholders. Return to office and any reputational risks. We have included information on some of the The Board approved and oversaw the return Aligning to net zero is important to all of our key decisions taken by the Board during the year, to the office and the transition to a hybrid stakeholders. The Board considers that this and how stakeholder interests were considered. working model. will help mitigate climate related risks within In reaching this decision the Board considered our clients’ portfolios, will help to attract and the following stakeholder groups: retain talented people and aligns with the Relevant stakeholder Group expectations of our shareholders, business 2 5 6 1 Clients partners, society and our regulators. The Board primarily considered the views of 2 People our employees and the need to ensure their safety and well-being. We considered the 3 Shareholders impact to society, including the need to restrict the spread of Covid and the impact 4 Business partners and suppliers on local businesses from people working at home. We ensured our plans were aligned to 5 Society government guidance and adaptable should such guidance change. We implemented 6 State and regulators rigorous Covid-19 safety measures across our offices and enhanced our working environment to provide a collaborative space for employees to reconnect. 82 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## BOARD EFFECTIVENESS ## INDUCTION, TRAINING AND PROCESS 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. Q&A with Dale Murray, Non- product distribution, and how this is enabled In addition, each Director is provided with key by our operations and overseen within our Executive Director documents including the strategy, business plans governance and control frameworks. One of and budgets, business performance reports, team See induction summary overleaf for an the biggest benefits was starting to develop overviews, information on the corporate overview of the key meetings held as part of relationships with people across the structure and governance framework, key policies the induction programme. organisation, which is critical for a Non- and governance documents, and is given access What were the key components of your Executive Director. to previous Board and Committee papers and induction? minutes. Did you develop any insights into I met with members of the Board, Executive Jupiter’s culture during your induction? Committee and their teams as well as key Yes, definitely, and I think this is one of the third parties. It was really interesting to meet most valuable aspects of the induction. people and develop a greater understanding Throughout the process I was struck by how of their teams, how they support Jupiter’s passionate people are about delivering for our strategy and their views of the business, clients, how generous people were with their industry and markets. Very early in my tenure, time, and their very open and transparent I was invited to join a Board dinner with the approach. It really provided me with an Senior Leadership Group and it was fantastic opportunity to see Jupiter’s cultural pillars in to meet with a wider range of senior action. From my conversations with senior management. management, it was clear to see the focus on There was very useful pre-reading for each our clients, on our people and the desire to meeting, which helped to ensure meetings innovate for the benefit of all of Jupiter’s were focused on key areas and resulted in stakeholders. richer discussions and more focused Most of the induction meetings could be questions. organised in Jupiter’s head office in London, How did the induction prepare you to where fortunately the majority of staff are discharge your duties? based. Whilst we all adjusted to virtual In order to effectively discharge your duties meetings, you can better understand a you need a thorough understanding of the company’s culture by meeting people in whole business and the induction programme person and walking round the offices, so I was has helped deliver this. This was particularly grateful to be able to do this. valuable to me, given my previous experience is outside asset management. I learnt about our investment strategies, our clients and Jupiter Fund Management plc | Annual Report and Accounts 2021 83 ### GOVERNANCE Induction summary Meeting Summary Board members, including the Chairman, SID Recent Board and Committee activities, key priorities, Board and Executive dynamics. and Chairman of the Audit and Risk Committee 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. Training Board process Last year we introduced a Board briefing session The Board all have access to the Company which is held prior to each Board meeting. These Secretary who advises on governance matters, sessions are designed to provide ongoing training board policies and processes and helps to ensure and education to the directors. The Board the timely flow of information. briefing is structured so that each briefing The Board have a rolling agenda in place which includes three sessions, which are a mixture of maps key topics for the next 12 months. This is internal and external presenters. Subjects are developed by the Chairman, CEO and Company organised in the context of the items to be Secretary with input from the Board and considered at the Board meeting. For example, Executive Committee. Key items for the when the Board discussed the Group’s sustainable Company’s financial year, Board evaluation fund range, the briefing session included a priorities, matters arising and key strategic project briefing from external experts on ESG industry updates are captured within the rolling agenda. It trends and competitor analysis, and a briefing is then updated throughout the year to ensure from our Head of Sustainable Investing on the consideration of new items. fund range. During 2021 the briefing sessions included subjects on: The Chairman, CEO and Company Secretary agree the final agenda for each meeting and • Industry trends papers are distributed one week before the • The competitive landscape meeting. • 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. 84 Jupiter Fund Management plc | Annual Report and Accounts 2021 # 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 FMC'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. | The 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 imagine 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 putting arrangements have been in place throughout 2021 and will continue into 2022. | | Continue to enhance Board papers and make greater use of 60% 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 85 ### GOVERNANCE GOVERNANCE ## NOMINATION COMMITTEE REPORT 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. Nichola Pease • Consider and, if appropriate, approve potential Chairman additional external appointments and conflicts of interest. COMMITTEE MEMBERS AND REGULAR ATTENDEES A full copy of the Committee’s terms of reference, which are reviewed by the Committee During the year, the Committee held six meetings, three of these were scheduled meetings and and approved by the Board on an annual basis, three further meetings were convened in order to consider matters relating to Board can be found at www.jupiteram.com appointments. Meetings Meetings attended Nichola Pease (Chair) 6/6 1 Jonathon Bond 4/4 2 David Cruickshank 2/2 3 Dale Murray 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. 86 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## “At Jupiter we pride ourselves on having an inclusive culture ## and have always actively encouraged independent thinking ## by our people.” Dear Stakeholder It has been another busy year for the Committee, independence and knowledge which the ### Board diversity with the key focus being the continued Board as a whole requires to be effective. succession management for both the Board Policy Statement Implementation and the Executive Committee. A culture which is inclusive and supports In reviewing Board composition, the diversity is essential to the long-term success Board changes Nomination Committee will consider the of our business and better enables us to We were delighted to welcome David Cruickshank benefits of all aspects of diversity in order respond to our stakeholder needs. We and Dale Murray to the Board in June and to enable the Board to discharge its duties understand that a diverse Board brings a September respectively. Our new Directors bring and responsibilities effectively. broad range of perspectives, insights and financial, technological and ESG-related experience challenge which supports sound decision In identifying suitable candidates for and entrepreneurial skills to the Board, which making. The Board sets the tone for inclusion appointment to the Board, the Committee were key attributes identified by the Committee and diversity across the business and we will consider candidates on merit against at the start of the recruitment processes. believe in having a diverse leadership team objective criteria and with due regard for and an open and inclusive culture. the benefits of diversity on the Board. Towards the end of the year we commenced a further search for an independent Non-Executive We believe a truly diverse Board will include As part of the annual performance evaluation Director, as part of our succession planning for and make good use of differences in the skills, of the effectiveness of the Board, Board Polly Williams, who has served on the Board for experience, background, race, gender, Committees and individual Directors, the seven years. We were pleased to conclude the disability, sexuality and other distinctions Board will consider the balance of skills, search process in early 2022 and are delighted between Directors. These differences will experience and independence and the that Suzy Neubert will be joining the Board on 1 be considered in determining the optimum diversity representation of the Board, March 2022 as an independent Non-Executive composition of the Board and when possible including gender, how the Board works Director. should be balanced appropriately. All Board together as a unit, and other factors relevant appointments are made on merit, in the to its effectiveness. Further details of the search and recruitment context of the skills, experience, 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 members of the Committee and wider Board met diversity encompasses all elements of cultural and has recommended a number of changes with candidates as appropriate. Following these differences, in the belief this leads to more in light of the Board changes during the year. changes, updating succession planning for senior innovation and better decision making. The The Committee recommended the appointment management has been identified as a key priority Board’s diversity policy can be found within the of David Cruickshank and Dale Murray, both of for the Committee in 2022. orange box. whom are qualified accountants, to the Audit | and Risk Committee. In addition to their financial | We have continued to develop the depth of | Following the appointment of Dale Murray, | | --- | --- | --- | | experience, David brings a detailed understanding | talent across the organisation and particularly | 33% of the Board is comprised of women, which | | of ESG-related risks and Dale of technology, both | below the Executive Committee. In 2020 we | is in accordance with our Board diversity target | | of which are key areas of focus for the Audit and | established the Senior Leadership Group, | and the recommendations of the Hampton- | | Risk Committee. Both Dale and David have also | which consists of our senior leaders below | Alexander Review. Following the appointment | | joined the Nomination Committee. | the Executive Committee, and the first Senior | of Suzy Neubert, the Board’s gender diversity | | | Leadership Conference was held in 2021. We have | will remain at 33%, as Polly Williams will retire | Suzy Neubert will join the Nomination and also refreshed our Senior Leadership Programme from the Board, and 11% of the Board will be Remuneration Committees upon her appointment. and these initiatives are aimed at ensuring a from an ethnic minority. Suzy has extensive experience in the asset strong pipeline of talent across the organisation. management industry, having been an analyst This report provides an overview of the current before moving into sales and marketing roles at Board composition and provides insights into the Diversity and inclusion Merrill Lynch and most recently as Global Head of work of the Committee during the year, together We have continued to focus on diversity and Sales & Marketing at J O Hambro Capital with a summary of the Committee’s evaluation. inclusion and the Board and Committee have Management, a position she held until 2020. Nichola Pease overseen the initiatives to improve diversity Chairman of the Nomination Committee across the organisation. Further information on Senior management this can be found on pages 34, 35 and 39. At In addition to the formal meeting schedule, the Jupiter we pride ourselves on having an inclusive Non-Executive Directors met with the CEO on a culture and have always actively encouraged number of occasions to discuss changes to the independent thinking by our people. We believe composition of the Executive Committee and Jupiter Fund Management plc | Annual Report and Accounts 2021 87 GOVERNANCE NOMINATION COMMITTEE REPORT continued # BOARD COMPOSITION AS AT 31 DECEMBER 2021 Independence - Independent Non-Executive Directors - Non-Executive Directors - Executive Directors - Chairman Gender - Female - Male Ethnicity - White ![img-2.jpeg](img-2.jpeg) ![img-3.jpeg](img-3.jpeg) ![img-4.jpeg](img-4.jpeg) Board experience Risk Management Asset Management CEO/Chair Experience Accounting/ auditing Technology Chair and Non-Executive tenure - David Cruickshank - Dale Murray - Chris Pailer - Nichola Pease - Karl Sternberg - Polly Williams - Roger Yates ![img-5.jpeg](img-5.jpeg) Executive Committee composition as at 31 December 2021 Gender - Female - Male Ethnicity - White - Asian ![img-6.jpeg](img-6.jpeg) ![img-7.jpeg](img-7.jpeg) 88 Jupiter Fund Management plc | Annual Report and Accounts 2021 Key activities during the year into account all relevant best practice and the Directors’ external commitments views of shareholders, together with the skills • Reviewed the Board skills, experience and A schedule of Directors’ external appointments, and experience of Board members. It was agreed knowledge, and assessed the composition which includes details of the time commitments that the size, composition and skills of the Board of the Board and its Committees. to those roles, is reviewed by the Committee was appropriate. The Committee recommended • Led a recruitment process for two additional to ensure all Directors can commit enough time the appointment of David Cruickshank and Dale Non-Executive Directors and recommended to their duties. This includes consideration Murray to the Audit and Risk Committee. David to the Board the appointment of David of the need for Directors to have sufficient and Dale are both qualified accountants and Cruickshank and Dale Murray as Directors capacity to be able to address non-standard David also brings ESG experience and Dale and members of the Nomination and Audit business situations arising in different roles at technology expertise which will be highly and Risk Committees. the same time, which could increase the time valuable to the Audit and Risk Committee. requirements of the Director. Any significant • Reviewed the performance, contribution and Whilst the composition of the Remuneration new appointments are required to be approved independence of Polly Williams who had Committee was not fully compliant with the by the Committee. The Committee is satisfied completed six years on the Board. Code throughout the year, it was agreed an that all Directors have sufficient time to dedicate • Assessed the contribution, independence and additional Non-Executive Director be appointed to their duties and have demonstrated this performance of Directors and recommended as part of the Board’s further succession planning. through their attendance record, responsiveness to shareholders their election or re-election The Committee therefore recommended to Jupiter business and additional time dedicated to the Board. the appointment of Suzy Neubert to the to Jupiter outside the formal Board meeting • Engaged with the CEO on proposed changes to Remuneration Committee with effect from structure. the Executive Committee and succession plans. 1 March 2022. Conflicts of interest • Oversaw the annual Board evaluation process. • Agreed the operation of the Non-Executive Director re-election The Company’s Articles of Association permit the Director and Executive Committee pairing Board to consider and authorise situations where In line with governance requirements and the scheme for 2022. a Director has an actual or potential conflict of Company’s Articles of Association, all Directors interest in relation to the Group. The Board has • Commenced a further Non-Executive Director stand for annual re-election at the Company’s a formal system to record potential conflicts and, search which concluded in early 2022, with the AGM. Each Director’s performance, including the if appropriate, to authorise them. Conflicts of recommendation to appoint Suzy Neubert as results of the annual Board evaluation, and interest are included as a standing agenda an independent Non-Executive Director and independence is considered by the Committee, item at each Board and Committee meeting. member of the Remuneration and Nomination who recommend to the Board their re-election. When authorising conflicts or potential conflicts Committees. In addition, a more detailed review of each of interest, the Director concerned may not take Directors’ performance, contribution and Board and committee composition part in the decision making. independence is undertaken when they are The Committee reviewed the composition of the considered for re-appointment after serving Board and its Committees during the year, taking three and six-year terms. 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 There have been a number of changes to the Executive Committee during the year which has Executive succession planning, talent and impacted succession planning for senior management. There has been increasing focus on talent and development. 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 The Committee recommended the appointment of two additional Non-Executive Directors during management sector was highlighted and focus the year, both of which had experience outside the asset management sector (for further information should be given to increasing the breadth of please see page 90). backgrounds in future recruitment searches. Consider the frequency of Nomination The Committee previously held four scheduled meetings per year and, following last years’ evaluation, Committee meetings and ensure appropriate a review of the key items considered at each meeting was undertaken. It was agreed that this process balance of substantive discussion and could be streamlined and that the frequency of Committee meetings be reduced to three scheduled governance. 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 89 ### GOVERNANCE NOMINATION COMMITTEE REPORT continued 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: 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. | | Role 1 | | Role 2 | | Role 3 | | --- | --- | --- | --- | --- | --- | | • Board or Committee | | • Technology and cyber experience | | • Sales, distribution or marketing | | | Chairmanship experience | | | | | background | • Experience of a disrupted sector • Qualified accountant and • Client engagement • Experience outside asset management financial experience • Experience in an intermediated business • ESG experience • Understanding of risk management • Current or recent executive • Entrepreneurial or innovative approach • ESG experience management experience Appointed RR as executive Appointed Russell Reynolds (RR) Appointed Heidrick & Struggles (HS) search firm as executive search firm as executive search firm 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. | | | | Role 1 | | | | Role 2 | | | Role 3 | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | David Cruickshank | | | | | Dale Murray | | | Suzy Neubert | | as an independent Non-Executive | | | | as an independent Non-Executive | | | | as an independent Non-Executive | | | | | Director and member of | | | | Director and member of the | | | | Director and member of | | | | | the Audit and Risk and | | | | Audit and Risk and | | | the Remuneration and | | | | Nomination Committees. | | | | Nomination Committees. | | | | Nomination Committees. | | 90 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## AUDIT AND RISK ## COMMITTEE REPORT 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. Polly Williams • Reviewing the Group’s whistleblowing Chair of the Audit arrangements and ensuring the proportionate and Risk Committee and independent investigation of any matters reported. • Overseeing the appointment, performance, COMMITTEE MEMBERS AND REGULAR ATTENDEES remuneration and independence of the Members Meetings attended External Auditors, including the provision Polly Williams (Chair) 7/7 of non-audit services to the Group. 1 | Jonathon Bond | | | 2/2 | • Reviewing and approving the appointment | | --- | --- | --- | --- | --- | | | | 2 | | of the Group’s Head of Internal Audit | | David Cruickshank | | | 3/3 | | | | 3 | | | and oversight of the Group’s Internal | | Dale Murray | | | 2/2 | | Audit function. Karl Sternberg 7/7 • Oversight of regulatory and compliance 1. Jonathon Bond stepped down from the Audit and Risk Committee on 6 May 2021 matters across the Group. 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 A full copy of the Committee’s terms of The Committee is comprised solely of independent Non-Executive Directors in accordance reference, which are reviewed by the Committee with the UK Corporate Governance Code. As disclosed on page 69, the Committee’s and approved by the Board on an annual basis, membership was below the minimum requirement for a very brief period, during which no can be found at www.jupiteram.com. 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 91 ### GOVERNANCE AUDIT AND RISK COMMITTEE REPORT continued ## “ 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 Enterprise Risk Management Framework. There resilience, in the event of a cyber-attack, have been several changes to enhance our through incident response exercises in 2022. As Chairman of the Audit and Risk Committee, I processes in line with emerging best practice, am pleased to present my report on the activities There have been a number of changes to the regulatory requirements and to further support of the Committee throughout 2021, which will be composition of the Committee during the year. our evolving business. The Risk and Compliance my last report to our stakeholders, before I step Jonathon Bond stepped down from the Board team have really driven the enhancements, with down in May. It has been a privilege to lead the and Committee following the conclusion of the guidance and oversight from the Group’s Risk Committee, especially through a period of such AGM in 2021 and I would like to thank Jonathon and Finance Committee and this Committee. I change across Jupiter and I would like to thank for his contribution to the Committee during his would like to thank them all for their efforts. everyone who has supported me through my seven-year tenure, especially for his diligent and tenure. We have continued to oversee the integrity of considered approach, and his commitment to the Group’s financial reporting and challenged sustainability. It has been a very busy year for the Committee. our external audit firm to ensure that their audit As the events and challenging circumstances I am delighted to welcome David Cruickshank procedures and processes remain robust, experienced in 2020 continued into 2021, the and Dale Murray who were appointed to the especially where any elements of the audit were Committee continued to focus on risks arising Committee on 1 June 2021 and 1 September 2021 conducted remotely. from the global pandemic and any resultant respectively. Both are qualified chartered changes to the Group’s operations and internal We keep the Group’s financial position and accountants and have strengthened the financial control framework. In addition, there has been levels of capital and liquidity under review, to expertise on the Committee. David was the an increased focus on sustainability risks and how ensure that the Group has sufficient resources. former Chairman of Deloitte and brings extensive we manage and mitigate these. The Committee reviews and challenges all leadership skills and a keen focus on sustainability. elements of the Group’s ICAAP to ensure the Dale is a technology entrepreneur who brings A key priority for the Committee has been the Group holds appropriate levels of regulatory technology expertise and experience of disrupted tender process for the external audit services, capital. We have prepared for the transition to sectors. which has been overseen by the Committee and the new Internal Capital Adequacy and Risk was conducted in accordance with the FRC’s Best David Cruickshank will be appointed Chairman of Assessment (ICARA) which will replace the ICAAP Practice Guide to Audit Tendering. Further details the Committee with effect from the conclusion in 2022. | of the process undertaken can be found on page | | of the 2022 AGM. I know David will continue to | | --- | --- | --- | | 99. The Board have agreed the Committee’s | An enhanced supplier management framework | drive focus on the Committee’s key areas of | | recommendation to appoint EY as the Group’s | was reviewed and approved by the Committee, | responsibility. | | External Auditors, subject to shareholder approval | which has been developed by our Procurement | | This year there have been a number of important at the 2023 AGM. I would like to take the team. This has enhanced our management and initiatives and projects in the Committee’s areas opportunity to thank all those firms who oversight of third-party suppliers and provides of oversight. I would like to thank my fellow participated in the audit tender process and us with additional assurance on the operational Committee members for their commitment and to all those across Jupiter, particularly our Finance resilience of our key suppliers. The team are diligence throughout the year and, most and Procurement teams, who contributed to the working to transition suppliers to the new importantly, the people across Jupiter who have process. Your hard work ensured a very thorough framework, starting with our most critical continued to innovate and drive progress and well organised audit tender. suppliers, and the Committee will be updated in the most remarkable circumstances. on progress during 2022. As detailed within my report last year, I hope to be able to meet with shareholders in the Committee has overseen the transition The threat of cyber security breaches has person for my final AGM on 11 May 2022. to a co-sourced Internal Audit model. only accelerated throughout the pandemic. A comprehensive tender process for the The Committee assessed the Group’s co-sourced provider was undertaken and the information security controls and measures Polly Williams Committee approved the appointment of BDO in place to help protect us from an attack, Chair of the Audit and Risk Committee LLP in this role. Our Head of Internal Audit has which included an analysis of recent cyber built out an internal team, which is supported by security incidents. We have also considered our | BDO LLP, and the new operating model is fully | resilience in the event of a successful attack and | | --- | --- | | implemented. I would like to thank our previous | how we would restore our systems and business | | internal audit partner and team at EY for their | operations as quickly as possible. Tailored | | support, and also take the opportunity to | training sessions on phishing awareness were | | welcome our new internal audit colleagues and | rolled out to all staff across the Group to help | | partner. Further information on the work of our | develop a positive cyber security culture, | | internal audit function can be found on page 100. | increase staff awareness and prevent cyber | attacks. We will continue to focus on this key At a dedicated meeting in June, the Committee area and will be further testing our operational reviewed and provided input on enhancements to the Group’s Risk Appetite Statement and 92 Jupiter Fund Management plc | Annual Report and Accounts 2021 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 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 > See page 96 for further reporting. The Committee reviewed and suggested changes to the annual and interim reports to ensure they information provided a true and fair view of the Company’s position and that they were fair, balanced and understandable. Statement of viability and going Considered, challenged and approved the Group’s statement of viability and the preparation of the annual and concern 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. > See page 98 for further information Significant accounting The Committee reviewed, challenged and approved all significant accounting judgements and estimates for both judgements and estimates 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. > See page 96 for further information Alternative Performance Challenged and approved the use of Alternative Performance Measures in the Annual Report and Accounts and Measures 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. > See page 98 for further information Internal Capital Adequacy The Committee reviewed and approved the Group’s ICAAP and wind-down plan, with a focus on the operational Assurance Process 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 This year the CRO led the process to revise our Risk Appetite Statement and Enterprise Risk Management Enterprise Risk Management Framework, to better align our risk taxonomy with our business operations. The Committee have been fully Framework 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 Reviewed and challenged the proposed changes to the Group’s supplier management policy and framework procedures 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 93 ### GOVERNANCE AUDIT AND RISK COMMITTEE REPORT continued 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 The Committee assessed the effectiveness of the policies and procedures in place to prevent fraud across the procedures 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 The Committee is responsible for maintaining policies and procedures to help ensure the independence of the auditor 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. 94 Jupiter Fund Management plc | Annual Report and Accounts 2021 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 Each year the Group’s independent auditors are required to undertake a CASS audit which reports on the Group’s Assurance (CASS) report 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 Reviewed the operation of the UAVC, including the structure of the UAVC, the valuation process and the Committee responsibilities of the relevant parties including the independent valuation experts, AIFM and, where relevant, the independent Investment Trust or Fund Board. > Please see page 98 for further information Consultation – Restoring Trust in Reviewed the consultation launched by the Department for Business, Energy & Industrial Strategy entitled Audit and Corporate Governance ‘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 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. > Please see page 101 for further information Jupiter Fund Management plc | Annual Report and Accounts 2021 95 ### GOVERNANCE AUDIT AND RISK COMMITTEE REPORT continued 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 The most significant share-based payment accounting costs for the Group relate to Long-Term judgement 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 The Group has goodwill of £570.6m on its balance sheet which is not amortised and remains judgement 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 In accordance with IFRS 10 the Group is required to consolidate any entities under the control of the judgement 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. 96 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## 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 c.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. | Jupiter Fund Management plc | Annual Report and Accounts 2021 97 ### GOVERNANCE AUDIT AND RISK COMMITTEE REPORT continued Going concern and statement The Committee received and reviewed a full the use and disclosure of APMs in the Annual draft of the accounts at its February meeting Report and Accounts was appropriate, and that of viability and considered whether the performance and the definitions and explanations were clear. The Directors are required under UK law and the position of the Group had been described in UK Corporate Governance Code to conclude on a fair and balanced way in the financial review. Unlisted valuations the Group’s ability to continue as a going concern We believe that the tone and content accurately During 2021 the Committee considered the and to include a statement of viability in the reflect the performance of the business, while process for the valuation of unlisted asset held by Group’s Annual Report and Accounts also providing relevant information for users. products managed by Jupiter. This primarily respectively. They must satisfy themselves as to The Committee’s attention was given to the related to assets held by Chrysalis, whose fee the Company’s ability to continue as a going disclosure in respect of the use of APMs (see structure includes a performance fee. concern for a period of 12 months from the date following paragraph for further detail) to ensure of the approval of the financial statements. In The Chrysalis performance fees are earned based that the disclosure in respect of APMs was clear addition, the Company is required to provide a on clear contractual criteria set out in the and transparent. | statement of viability, which can be found on | | Chrysalis prospectus and within their subsequent | | --- | --- | --- | | page 26, and which reports on the viability of the | Following its review, the Committee was | financial reports and is not subject to clawback. | | Company over a three-year period. | of the opinion that the 2021 Annual Report and | The Committee specifically considered the | | | Accounts was representative of the year and | valuation process in light of the valuation | The Committee supports the Board in its presents a fair, balanced and understandable responsibilities and potential performance fees, assessment of going concern and ongoing overview. The Committee was also of the opinion which included: viability by considering and reviewing a number that the Annual Report and Accounts provides of factors such as the current financial position, • Valuations are determined in accordance with a true representation to shareholders of the budget and cash flow forecasts, liquidity, International Private Equity and Venture Company’s position and performance, business contingent liabilities and unfavourable market Capital Guidelines. model and strategy. scenarios, versus the Group’s core forecasts, • Valuations are prepared by an independent the Group’s ICAAP and wind-down plan, expert valuer, are subject to a clear control Alternative performance measures and risks to the Group’s operations including framework and are considered and approved The Committee reviewed the approach proposed transition risk related to the Merian acquisition, by the UAVC of the AIFM. by the Finance team for disclosure of APMs or balance sheet position. • Enhancements to the process had been specifically around the presentation of The Committee considered and assessed the identified that were implemented in 2021 exceptional items and performance fees in the Company’s viability under a combination of including the appointment of an independent Group’s income statement. Exceptional items are severe stress scenarios including the impact of non-executive chairman of the UAVC. defined as items of income or expenditure that multiple risks occurring simultaneously and are significant in size and which are not expected • Valuations are audited by the Chrysalis external whether there was potential for further to repeat over the short to medium term. auditor as part of the statutory audit and are pandemic-related market uncertainty. Such items were separately presented to enable approved by the Chrysalis Board. a better understanding of the Group’s ongoing In conjunction with the Board and the The Committee recommended to the Board that financial performance. The exceptional items for Remuneration Committee, the basis of the it was appropriate for the Group to adopt the the 2021 financial year are consistent with those performance fee related pay was also considered. going concern basis of accounting in preparing disclosed in 2020 and relate principally to a cost the half-year and annual financial statements for For 2021, it was agreed with the Chrysalis Board reduction programme and to costs arising from the year ended 31 December 2021 and that the that the performance fee should be partially the Merian acquisition in 2020, that are required Company would remain commercially viable over settled in Chrysalis shares. The number of shares to be recognised over multiple accounting a three-year period. was determined by reference to the Chrysalis periods. The Committee reviewed and challenged share price as at 30 September 2021, the date the Fair, balanced and understandable the costs proposed by management as performance fee crystalised. 54% of the 2021 exceptional items for the period and agreed that The Committee assessed whether, taken as a performance fee was settled in Chrysalis shares, they met the principles for treatment as whole, the 2021 Annual Report and Accounts was equivalent to the deferred awards to be granted exceptional items, which was also agreed by the fair, balanced and understandable and provided to the Chrysalis investment desk, including Group’s external auditors. Additional APMs have the information necessary to assess the related employer taxes. been used in the presentation of the 2021 Annual Company’s position and performance, business Report to exclude the impact of substantial As a result, the fair value of the deferred bonus model and strategy. performance fees received and associated award was established as at 30 September 2021 To assist with the Committee’s assessment as to variable compensation awards. Such fees are and the value of that award has decreased based whether the Annual Report and Accounts is fair, unlikely to recur at the same levels in future years on the Chrysalis share price at 31 December 2021. balanced and understandable, the Committee and could therefore be seen as unrepresentative The deferred awards vest over three years and receives and discusses papers from management of the Group’s core fee-earning potential as well the actual fair value is determined based on the outlining changes in the application of any as its variable cost base. The Committee Chrysalis share price at the exercise dates. The accounting policies together with material considered whether the exclusion of such items accounting requirements for this award, including estimates and judgements. of income and cost from underlying performance the accounting timing recognition mismatch of measures was appropriate, and whether this the reduction in the fair value of the asset and resulted in more useful information for users of the deferred bonus awards in accordance with the accounts. The Committee also considered IFRS, were considered by the Committee. whether this treatment created an excess of APMs in the Annual Report and Accounts which External audit could prevent it from being fair, balanced and PwC served as the Group’s external auditors understandable. The Committee concluded that during the year. PwC was first appointed as 98 Jupiter Fund Management plc | Annual Report and Accounts 2021 external auditor in 2007 and their reappointment In November, a meeting of the Committee was the integrity, objectivity and independence of as the Company’s external auditor was confirmed convened specifically to receive and consider the auditors. following a formal external audit tender process presentations from the three audit firms In May, the Committee considered, reviewed in 2014. Colleen Local was appointed as lead audit participating in the final stage of the audit tender. and approved three updated independence partner in January 2020. For the year ended 31 The Committee used the meeting to challenge policies, designed to help safeguard the December 2021 only, Lindsay Gardiner provided and question each of the audit firms to ensure independence of the external auditor by limiting parental leave cover and led the external audit. that the preferred firm would provide the highest the amount of influence the Group or those in quality, most effective and efficient audit and The Company is in compliance with the financial oversight roles can have over the would be the best fit for Jupiter. Each audit firm requirements of the Statutory Audit Services external auditor as follows. was provided with the following guiding for Large Companies Market Investigation principles for the structure of their presentations • Provision of non-audit services by the Group’s (Mandatory Use of Competitive Tender Processes to Jupiter: external auditors; and Audit Committee Responsibilities) Order 2014 • Appointment of individuals formerly employed and the Corporate Governance Code. Under • Highlight key areas of differentiation; by the Group’s external and internal auditor; these requirements a tender for the external • Demonstrate the key strengths of your firm; and audit must be undertaken no later than 2024. and • Policy covering the personal use of the During the year, the Company commenced and • Outline how your firm will deliver a high- external auditor. completed the Audit Tender Process which was quality, efficient and effective audit. overseen by the Committee (see below for The Committee sought responses to questions External audit effectiveness further detail). relating to the audit firm’s available resources, the In October, the Committee conducted The Committee met with representatives from management of conflicts in their time, the a formal evaluation of the independence and PwC without management present to ensure that development of effective working relationships effectiveness of PwC as the Company’s external there were no issues that needed to be brought with key stakeholders whilst maintaining auditors. The evaluation was fulfilled by means to the attention of the Committee. appropriate rigour and the process for the audit of a questionnaire completed by key internal of overseas entities. The Committee also stakeholders, in accordance with the FRC’s External audit tender considered areas of improvement for each audit guidance on assessing audit quality. This included The Committee undertook a formal tender firm as identified by the FRC’s audit quality all services provided by PwC and enabled the exercise for the external audit services in the review. At the December Committee meeting Committee to assess and discuss with relevant second half of 2021 and conducted the tender in the Committee agreed that EY would provide parties (including the auditors) the key messages accordance with the FRC’s Best Practice Guide to the most robust and effective audit and was the and themes emerging from the evaluation. Four Audit Tendering. best fit for Jupiter, with two other firms also criteria were used to assess audit quality; mindset being presented to the Board. The Committee and culture; skills, character and knowledge; In May, the Committee reviewed and approved recommended to the Board that EY be quality control; and judgement. Overall, PwC was the proposal for the audit tender process. They appointed as External Auditor with effect from found to have performed effectively during the considered and agreed the scope of the audit the year ended 31 December 2023, subject to audit and to have upheld excellent standards in tender along with which firms were to be invited shareholder approval. respect of reputation, integrity and judgement. to tender for the audit and related services. Five firms were invited to tender including two Throughout the process, and following the Board Although there was a good level of satisfaction in firms outside the ‘big four’ audit firms. The decision, feedback was provided by the relation to the 2020 audit, a small number of Committee focused on identifying which firm Committee Chairman to each participant firm. issues were identified. Overall the evaluation would provide appropriate challenge and deliver indicated that there had been an improvement to An overview of the timeline for the audit tender high-quality assurance whilst also providing the the scores from the previous year; however, process is detailed below: best fit with Jupiter. The scope of the Request for feedback from Committee members had Proposal (RFP) comprised the provision of the Q2 2021 The Committee approved the Audit declined, which was primarily due to auditors’ report on the Annual Report and Tender Plan, including the selection communication between PwC and Jupiter being Accounts of Jupiter Fund Management plc and of firms to involve. impacted by the remote working environment. each of its corporate subsidiary undertakings, Q3 2021 Audit tender process commenced. The Committee considered how to improve along with audit-related services including the Q4 2021 The Committee selected the chosen communication channels now that staff have interim review report, client assets reporting in audit firm for recommendation to returned to the office. Whilst this did not impact accordance with FCA requirements, and the AAF. the Board. the quality of the audit, the Committee | An assessment of each firm’s independence | 2022 The selected firm to gain | | challenged PwC to ensure a more comprehensive | | --- | --- | --- | --- | | was considered by the Committee taking into | | independence and undertake | round of planning meetings with Jupiter. | | account existing services currently being | | shadowing of PwC’s work. | | The Committee also reviewed the FRC’s Audit provided to Jupiter, that would not be 2023 The selected firm recommended to Quality Review on PwC. In the FRC’s latest permissible in the future, should the provider be AGM shareholders at the AGM. inspection published in July 2021, the FRC successful with the tender. Initial meetings were reviewed 20 audit engagements undertaken held with management and each of the providers. by PwC, half of which related to FTSE 350 firms, Throughout the audit tender process the External auditor independence policies which showed an increase in the quality of the Committee monitored each firm’s independence In 2016, the FRC issued its Revised Ethical specific audits they reviewed in 2020/21 and assessed the plans for the transition of Standard 2016 which was updated in 2019. compared with their assessment for those existing services or new services where the These aimed to strengthen auditor independence audits they reviewed in 2019/20. Overall the incumbent firm would need to be replaced. and prevent conflicts of interest in order to FRC assessed PwC’s audit process as of improve audit quality with focus on threats to a good standard. Jupiter Fund Management plc | Annual Report and Accounts 2021 99 ### GOVERNANCE AUDIT AND RISK COMMITTEE REPORT continued | External Audit Fees | With effect from 1 January 2017, the FRC | firms were asked to respond to a detailed RFP. | | --- | --- | --- | | | introduced new rules for auditors in respect | Two firms were considered to be the most | | Audit fee | of the provision of non-audit services whereby | suitable firms for Jupiter’s size, business and | | | the proportion of non-audit service fees that | culture and the Committee Chairman, a member | £0.5m can be incurred in a year is limited by reference of the Committee, the CEO and the CFO met 21 £0.3m to the average audit fee over a rolling three-year with both firms. period and prohibits non-audit services fees from At the October Committee meeting the exceeding 70% over both UK standalone and Audit related assurance services Committee considered the two final proposals total Group bases. In December 2019, the FRC and concluded that BDO LLP was the most £0.3m published revised ethical standards which aim suitable internal audit co-sourced provider and to strengthen auditor independence, prevent 21 £0.3m agreed to appoint BDO LLP with effect from conflicts of interest and improve audit quality. 1 January 2022. The revised standards placed further limits on the Audit fee for subsidiaries provision of non-audit services. The Company is Effectiveness of internal audit compliant with these requirements. £0.8m In line with the approach taken for the external auditors, the Committee monitors the fees paid 21 £0.8m External auditor oversight conclusion to EY for services outside the internal audit to The Committee concluded that PwC is effective, ensure their objectivity and independence and Other assurance services undertakes the audit with integrity and sufficient will continue to do so for BDO LLP. challenge and remains independent. It is £ 0.9m Due to the close involvement of the Committee proposed that PwC be recommended to | | | shareholders for re-appointment for the year | in the internal audit transition to a co-sourced | | --- | --- | --- | --- | | 21 | £ 0.0m | | | | | | ending 31 December 2022. | internal audit function, a formal review of the | effectiveness of the internal audit function Other non-audit services Internal audit was not undertaken during the year. The Committee will undertake a review of the £ 0.0m During the course of the year the Company effectiveness of internal audit in H1 2022. transitioned from an out-sourced internal audit 21 £ 0.0m XX model, provided by EY, to a co-sourced internal Enhanced risk management audit model. Both the lead audit partner from EY and the Head of Internal Audit reported directly At a meeting in June, which was focused Non-audit services to the Committee Chairman. The Committee on the enhanced risk management framework, worked with internal audit to ensure that the the Committee reviewed and considered Services classified as non-audit services, as above, audit plan for the year addressed the most proposed enhancements to the enterprise risk include the review of the interim results, CASS material risks to the Group and the key themes taxonomy, the top-down risk assessment process, audit, and overseas regulatory audits. affecting the asset management industry. the risk appetite statement and metrics and the To safeguard the external auditors’ objectivity key risk indicators. The purpose of the review The Committee reviews the internal audit plan and independence the Committee has a was to provide an enhanced holistic view of how at each meeting to ensure that it remains relevant non-audit services policy, which sets out the we identify, assess, manage and report to the for new and emerging circumstances. A total procedure for the provision of any non-audit Board on the risk profile of Jupiter’s entities as of 11 internal audits were completed during 2021 services by the external auditors to any entity the Group expands geographically. Consideration for Jupiter Fund Management plc which included within the Group. The policy requires all was also given to industry best practice. The a focus on third-party providers governance non-audit services to be approved by the Committee challenged and questioned the and oversight, market abuse, liquidity risk 20 Committee, which can be facilitated by the rationale behind some of the proposed changes management, ESG, implementation of the Senior Committee Chairman should such approval to the risk taxonomy and Risk Appetite Manager and Certification Regime, cyber security, be required in between Committee meetings. Statement and thresholds in advance of the ESG framework and the Inter-Bank Offered At each Committee meeting the non-audit formal review and approval of the updated Rate transition. | | spend of the Group is reviewed and an | | Enterprise Risk Management Framework policy at | | --- | --- | --- | --- | | | assessment made of the independence | In addition, four internal audits were | | | 20 | | | the October meeting and the Risk Appetite | | | of the external auditors. | undertaken during 2021 in respect of Jupiter | | Statement at the December meeting. Asset Management (Europe) Limited (Ireland) and 14 were undertaken for Jupiter Asset Management International S.A. (Luxembourg). The Committee has overseen the transition to 20 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 20 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 20 100 Jupiter Fund Management plc | Annual Report and Accounts 2021 Monitoring of the Group’s risk • The Committee reviewed the Group’s ICAAP crime prevention and other compliance and recommended its approval to the Board. matters. management environment In its review of the Group ICAAP, the • Received a report from the Chairman of the During the year the Committee received Committee assessed and challenged: Committee, in her capacity as Whistleblowing regular management reports from the Champion, and a review of the whistleblowing CRO on: • Management’s methodology and approach. procedures. • Operational risk scenarios, assumptions and • The profile of our Strategic, Operational, • Reviewed reports from the third line of quantification. Capital Adequacy, Liquidity, Credit and defence on the maturity of the internal control • Capital and liquidity stress testing. Counterparty, and Market Risks. environment. • The Group’s proposed wind-down plan. • Adherence to the Group’s Risk Appetite and • Conducted an annual and interim review of the any breaches of risk appetite metrics. effectiveness of Jupiter’s system of risk Monitoring of the Group’s internal • The profile of transversal risks such as Conduct management and internal control which control environment Risk and ESG. includes financial, operational and regulatory During the year the Committee: • Cyber and regulatory risk (including post Brexit compliance controls. divergence, SFDR and our registration in the • Evaluated and monitored material control The Committee’s review of the internal control US). issues identified by management through framework concluded that the internal control • Changes to key regulations and how these will regular reports from the CRO. framework was operating effectively and that impact the Group. • Considered reports from the second line of there were robust processes in place to ensure • Details of planned Risk and Compliance defence on the oversight of operational risk appropriate financial and regulatory reporting Assurance reviews and any material findings controls. controls, including over the enlarged Group. and themes. • Reviewed processes for financial crime The Committee therefore recommended to • Review and approval of the Group’s AAF. prevention and deterrence of fraud. the Board that the risk management and internal • Overall, it was considered that Jupiter had control framework was operating effectively. effective and proportionate anti-money Where the Committee identified areas requiring laundering and financial crime prevention improvement, processes are in place to ensure systems and controls. Extra resource was that the necessary actions are taken and progress recruited in Luxembourg to assist the against those actions is monitored. Compliance Conducting Officer with financial 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 A comprehensive tender for the external audit services was undertaken in 2021. See “External audit audit services is undertaken in 2021. tender” on page 99 for further detail. Develop further the integrated assurance plan to The development of an Internal Audit function has resulted in better collaboration between the continue to provide comprehensive coverage of Group’s Risk and Compliance Team and Internal Audit function. This has resulted in a comprehensive key risk areas, whilst maximising the efficiency of and cohesive integrated assurance plan for 2022 and beyond. the business. Oversee continued enhancements to the risk A dedicated meeting was scheduled in July, followed by further discussion in October, where the management framework and processes, and the Committee reviewed and considered proposed enhancements to the enterprise risk taxonomy, assurance reporting to the Committee. 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 101 ### GOVERNANCE ## REMUNERATION ## COMMITTEE REPORT 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 Roger Yates fees and the total individual remuneration Chairman packages of Executive Directors, Executive Committee members and individuals identified as Code Staff COMMITTEE MEMBERS AND REGULAR ATTENDEES • Approving the design of, determining the Meetings Meetings attended targets for, and monitoring the operation of, Roger Yates (Chair) 5/5 any performance-related pay schemes 1 | Jonathon Bond | 2/2 | operated by the Group | | --- | --- | --- | | Nichola Pease 5/5 | | • Reviewing the design of all share incentive | | Karl Sternberg 5/5 | | plans and deferred bonus arrangements for | approval by the Board and, if applicable, 1. Jonathon Bond stepped down from the Board on 6 May 2021. shareholders The Committee comprises two independent Non-Executive Directors and the Chairman of the • Overseeing any major changes in employee Board who was independent on appointment in accordance with the UK Corporate benefit structures throughout the Group Governance Code. As disclosed on page 89 the Committee’s membership did not follow the A full copy of the Committee’s terms of requirements of the UK Corporate Governance Code throughout the year. Suzy Neubert will reference can be found at www.jupiteram.com. 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. 102 Jupiter Fund Management plc | Annual Report and Accounts 2021 Dear Stakeholder, The following changes were incorporated into Performance and bonus outcomes our 2021 variable pay structure in order to I am pleased to present our Directors’ for 2021 further enhance alignment with corporate Remuneration Report (DRR) for 2021. Performance strategic goals: As the CEO outlined in his review, this has been a This 2021 DRR is divided into two sections: • The 2021 bonus included an enhanced 35% year of progress for Jupiter in challenging • Executive Remuneration at a Glance. This sets weighting on strategic and individual circumstances and we have delivered strong out the key terms of the Directors’ performance measures. Pay-out on strategic financial results that reflect the ongoing resilience Remuneration Policy that was approved by measures reflects successful progress against of our business and the strategy that underpins it. shareholders at our 2021 AGM alongside a ‘lead indicators’ that are critical to growth and Our underlying PBT was up 21% as we saw the full summary of how it will be implemented in our delivery of sustainable future profits. For year benefit of the contribution from Merian and 2022. example, in 2021, particular focus was placed our strong investment performance generated • The Annual Report on Remuneration. This on building on and delivering value from the £113.0m of performance fees this year. A outlines in detail how we implemented the successful integration of Merian and challenging net flow picture, reflecting a slowing Remuneration Policy in 2021 and how we embedding our ESG priorities. The high level in the appeal for UK equities and fixed income intend to apply it in 2022. It is subject to an of bonus deferral ensures, beyond the initial funds where Jupiter has a strong product line-up, advisory vote by shareholders at the 2022 bonus performance period, that executives was offset by another record year for gross sales. AGM. remain focused on successful realisation of Finally, our commitment to helping our clients value from these ‘lead indicators’ in order to Alignment of strategy and remuneration achieve their long-term investment objectives maintain or grow the value of their deferred continues to be delivered, with 58% of our Jupiter’s primary focus is on delivering value to awards. mutual fund assets outperforming over three clients through long-term investment • Net flows was moved from being a bonus years, one of our most important KPIs. outperformance after all fees. Jupiter’s business measure to a LTIP measure on the basis that it model of combining this investment was more appropriate to assess fund flow Our investment in new areas over the past two outperformance with an effective distribution performance on a longer-term basis. years means that we have broadened our platform, supported by efficient and scalable product offering, invested in our talent, and As our corporate strategy goals remain operations, has enabled us to deliver value to adopted the processes, systems and technology unchanged, the Committee is satisfied that the shareholders since listing in 2010 and to meet the evolving needs of our clients. In broad structure of performance measures used demonstrates how an active, high-conviction particular, well-targeted investment has enabled in 2021 remains appropriate for use in 2022 (as approach to investment can be a differentiator us to successfully expand our sustainability detailed in the below table). from passive strategies. capabilities, grow our international presence and Percentages are weighting of position us for growth in the institutional market. The variable pay structure aims to support the each measure in the relevant plan Annual bonus LTIP delivery of the Company’s growth strategy by Bonus outcomes PBT 40% – | incorporating key financial and strategic | | | | | | | Based on the good performance outlined above, | | --- | --- | --- | --- | --- | --- | --- | --- | | performance measures into the bonus balanced | Net flows – 30% | | | | | | the formulaic outcome of the bonus scorecard | | scorecard and the Long-Term Incentive Plan (LTIP) | Investment out- | 25% (1 yr | | | 30% (3 yr | | was 84.8% of maximum for the CEO and CFO. In | | performance conditions, whilst allowing the | performance | and 3 yr) | | | and 5 yr) | | light of the Vice Chairman’s change of role after | | Remuneration Committee appropriate discretion | EPS – 40% | | | | | | stepping down from the Board at the 2021 AGM, | | to ensure bonus and LTIP payouts remain in line | | | | 1 | | | the Committee exercised its discretion to reduce | | | Strategic and | | 35% | | | – | | | with the overall experience of our various | individual | | | | | | his maximum bonus potential from 200% to 75% | | stakeholders. Longer-term alignment is achieved | performance | | | | | | of salary and to determine his 2021 bonus wholly | | by a combination of a high level of deferral of | | | | | | | on Group financial performance (which delivered | 1. Strategic measures used in the annual bonus plan in 2022 bonus payouts into shares or fund units, an will be aligned to our strategic core objectives for 2022 82.7% of the reduced maximum potential). (as set out on page 17) with particular focus on ESG and extended release period for LTIP awards and sustainability objectives. The Committee gave careful consideration to significant minimum shareholding guidelines. these outcomes in respect of various internal and Other elements of remuneration in 2022 external factors detailed on page 110 and 111 and As detailed in last year’s DRR, the Committee is concluded that no further discretionary implementing a phased two-year increase in our adjustments were required. A full disclosure of | CFO’s salary to reflect the level of responsibility | the bonus determination process and the | | --- | --- | | and scope of his role. The second stage of this | scorecard outcomes is provided on pages 109 | | increase from £315,000 to £330,000 (4.8% | to 112. | 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 103 ### GOVERNANCE REMUNERATION REPORT continued | CEO 2021 single figure and pay ratio | Pay regulation | | --- | --- | | The first LTIP award granted to the CEO was | During 2021 we undertook a review of our | | shortly after his appointment in 2019. The | remuneration policies and approach to ensure | | performance period for that award ended on 31 | compliance with the Investment Firms Prudential | | December 2021 and the formulaic outcome was | Regulation (IFPR), which is applicable from the | | 30.3% vesting, full details of which are provided | start of this year. As part of this process we have | | on page 113. The Committee was satisfied that this | both reassessed the number of individuals who | | vesting outcome was justified by overall | have been identified as our key material risk | | performance over the three-year performance | takers and made some minor amendments to | | period and that no discretionary adjustment was | their pay arrangements in order to ensure | | required. | alignment with all prevailing sectoral pay | regulations. Inclusive of the vested value of this LTIP award, the CEO’s 2021 single figure is £2,514k and the Shareholder engagement median CEO pay ratio is 22:1. The 2020 I would like to thank shareholders and investor comparators (single figure: £1,759k; median CEO bodies for the constructive input and pay ratio 16:1) which did not contain any engagement that they provided as we developed entitlement to vested LTIP, will make the 2021 the new Remuneration Policy and I am grateful to figure and ratio inevitably higher. shareholders for their support in approving both Employee share ownership the Remuneration Policy and DRR at the 2021 AGM with, respectively, over 95% and 97% of Employee share ownership continues to remain a votes cast in favour. core principle for the Company, ensuring a strong | alignment with our other shareholders in the | I welcome feedback at any point in time from our | | --- | --- | | long-term interest in the Group’s performance | entire shareholder base regarding our | | and allowing all employees to share in the | remuneration arrangements and I hope that we | | Company’s success. | will have your support at the forthcoming AGM. | | During 2021, the Company granted all eligible | Roger Yates | | employees a free share award. For employee | Chairman of the Remuneration Committee | based in the UK this is under the Company’s Share Incentive Plan (SIP). This award, contingent 24 February 2022 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. 104 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## 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 | | • CEO £455,000 (2021: £455,000) | • CEO’s salary unchanged | | --- | --- | --- | --- | | | annually taking into account a range of | • CFO £330,000 (2021: £315,000) | • As outlined in prior Remuneration Reports, | | | factors including size and scope of the | | the CFO joined Jupiter on a salary below | | | role; skills, performance and experience | | that of his predecessor on the | | | of the individual; market competitiveness; | | understanding that he may receive an | | | wider market and economic conditions; | | above inflationary increase as he | | | and the level of increases in the wider | | established himself in the role and | | | employee population | | 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 • 15% of salary • Unchanged made at a consistent level to all UK employees | Bonus | • Maximum opportunities: CEO 425%, CFO | • Maximum opportunities: CEO 425%, | • Unchanged | | --- | --- | --- | --- | | opportunity | 250% of salary | CFO 250% of salary | | | Bonus | • Balanced scorecard approach | • 65% based on corporate quantitative | • Unchanged | | performance | • At least 65% based on corporate | measures (profitability, investment | | | measures | quantitative measures; no more than 35% | performance over 1 and 3 year periods); | | | | based on individual and strategic | 35% based on strategic objectives and | | | | measures | individual performance | | • Payments subject to risk and compliance assessment and application of Remuneration Committee judgement | Bonus | • 50% of total bonus deferred over three | • Where an Executive Director has not | • Unchanged | | --- | --- | --- | --- | | deferral | years vesting in annual tranches and | yet met their minimum shareholding | | | | subject to an additional six-month | requirement, only 25% of their | | | | holding period | deferred element can be delivered in | | | | • Deferral can be in shares or fund units | fund units | | • Half of the remaining 50% delivered as shares or fund units subject to a six-month holding period | LTIP | • Maximum opportunities: CEO 375% and | • Maximum opportunities: CEO 375% | • Unchanged | | --- | --- | --- | --- | | opportunity | CFO 225% of salary | and CFO 225% of salary | | | LTIP | • Subject to relevant performance | • Three measures: EPS growth (40%), net | • Unchanged | | performance | measures normally assessed over at least | flows (30%) and investment | | | measures | three years and usually subject to an | outperformance over 3 and 5 year | | | | additional two-year holding period | periods (30%) | | • Vesting subject to risk and compliance assessment and underlying business performance underpin Shareholding • CEO 500%, CFO 250% of salary • In line with the Remuneration Policy • Unchanged requirements • 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 Malus and • Malus and clawback provisions apply to • In line with the Remuneration Policy • Unchanged clawback all variable remuneration Jupiter Fund Management plc | Annual Report and Accounts 2021 105 ### GOVERNANCE 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 pension and benefits structure applicable to all and conduct underpin, and the provision of malus UK employees and not differentiated based on and clawback conditions on variable in 2021 seniority. Jupiter operates a single bonus deferral compensation awards to Executive Directors, the The table above provides a high level overview of plan, and an LTIP scheme for a limited number of Committee is confident that its work provides a the various topics which the Committee has more senior employees. This simple and well robust framework to ensure appropriate risk worked on during 2021. The remainder of this communicated remuneration structure should alignment of compensation. section satisfies several requirements of the ensure compensation spend is appropriately latest Corporate Governance Code. The range of possible pay awards available to valued by employees, and not eroded by Executive Directors under the Remuneration complexity. Provision 40 statement and strategic Policy was clearly set out in the 2020 Directors’ rationale All variable compensation, including that for Remuneration Report on pages 90 to 93. Executive Directors, is subject to a series of risk The Committee aims to have in place An overview of how the structure of the checkpoints (as described in more detail on page remuneration arrangements which are simple and Remuneration Policy and specific performance 122), which aim to assess a range of ex-ante and therefore well understood by the entire metrics align with Jupiter’s business strategy and ex-post potential financial and non-financial risks workforce, including the Executive Directors. The culture is set out in the Committee Chairman’s to the business prior to payment of any bonuses. simplicity is supported, for example, by a single statement. In conjunction with an individual risk, compliance 106 Jupiter Fund Management plc | Annual Report and Accounts 2021 Engagement with shareholders The Committee is provided with data illustrating Jupiter also has an established employee the mean and median bonus levels and salary representation forum (Connections), whose Shareholder and investor bodies provided increase percentage split by gender for the Chairman meets with the Board regularly. This constructive input and engagement as the new current and previous performance year, in order engagement is Jupiter’s method for ensuring a policy was developed last year. Shareholders that it can also analyse the outcomes from a formal dialogue exists between employees and showed their support in approving both the gender pay perspective. More details can be the Board. It provides the opportunity for Remuneration Policy and the DRR at the 2021 found in our separate Gender Pay Gap Report. employees to engage with the Board on any AGM with, respectively, 95% and 97% of votes relevant employee matters, including pay. cast in favour. One of the recurring exercises undertaken by the Committee on an annual basis is a review of Collectively this work helps demonstrate the There were no material concerns raised by external compensation benchmarking data, giving Committee’s considerations in appropriately shareholders following publication of the 2020 an overview of fixed and total compensation balancing the pay outcomes for the wider DRR and therefore specific engagement with levels for all employees relative to the wider employee population with its decisions regarding shareholders during 2021 was largely limited to market. This data allows the Committee to executive pay. the Remuneration Policy review for that year. challenge pay decisions at a more granular level, During the year an internal evaluation of the As stated in the Committee Chairman’s letter, the and make proposals to management in respect of Committee’s effectiveness was undertaken, the Committee welcomes feedback at any point in the upcoming pay round. process for which can be found on page 85. time from our entire shareholder base regarding The Committee approves all compensation for An update on the actions arising from the 2020 our remuneration arrangements. | | Code Staff, including for fund managers. Whilst | Board evaluation are detailed below, together | | --- | --- | --- | | Operation of Remuneration Policy | this process is a regulatory requirement, it | with an overview of the outcomes from the 2021 | | | involves a detailed and robust discussion, | evaluation. | A description of how the Committee assesses the including with the CIO, in relation to the financial quantum of the bonus scorecard outcomes in the and non-financial considerations for determining context of the overall corporate performance fund manager bonuses. 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 2020 priorities 2021 status respectively. Ensuring that appropriate metrics, CSR metrics relating to the Group’s ESG credentials, progress focused on ESG and cultural matters, towards diversity and inclusion targets and the firm’s culture, Remuneration decisions made by the Committee were included in the bonus all formed part of the bonus scorecard. Given the in relation to the Executive Directors also take scorecards and objectives. importance of this matter to our stakeholders, this will into account a range of additional factors remain an area of focus for 2022. including internal relativities (details of our CEO pay ratio are on page 124) and relevant external Ensuring a collegial approach to This has improved during the year and the meetings are held market data. preparation for meetings between between management, the Committee Chairman, Secretary management, the Committee’s and, where appropriate, the Committee’s advisors in Wider workforce pay and engagement advisers and the Committee advance of the papers being circulated. This ensures papers The Remuneration Committee is closely involved Chairman. are of a high standard and enables the incorporation of any in considering the remuneration policies and pay comments. Further work will be undertaken to ensure that levels of the wider Jupiter workforce. The papers are circulated in a timely manner. 2021 evaluation conclusions Committee’s work involves debate, discussion and ultimate approval of the Company-wide The evaluation process found that the Committee is generally operating effectively with very variable compensation spend as well as the salary positive scores for the Committee Chairman’s leadership style, effectiveness of the agenda and increase budget for the whole workforce, with debate, and respondents particularly commended the management of the 2021 Directors consideration given to the amounts and Remuneration Policy Review. The Committee identified a number of priorities for 2022: proportions of total spend allocated to different • In light of the recent change in key personnel supporting the Committee, ensure effective working areas of the business. Part of this discussion relationships are developed between all parties and continue to drive improvements to papers; requires an assessment of the financial KPIs of the • Ensure effective implementation of IFPR; business, including underlying PBT, which is also a • Consider wider remuneration practices, in light of the demand for talent, to ensure we can key metric under the bonus scorecard for continue to retain and attract talented individuals aligned with our culture. Executive Directors. Jupiter Fund Management plc | Annual Report and Accounts 2021 107 ### GOVERNANCE REMUNERATION REPORT continued Implementation in 2021 Single total figure Executive Directors’ 2021 and 2020 remuneration (audited information) | Andrew Formica Wayne Mepham Edward Bonham Carter | | | | | ] | | --- | --- | --- | --- | --- | --- | | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | A. Fixed pay Base salary 455 446 315 300 42 114 2 Taxable benefits 8 4 4 3 1 3 3 Pension 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 410 311 167 120 6 36 six-month holding period Delivered in shares/fund units vesting over three years 819 622 334 241 13 74 4 Total bonus 1,639 1,244 668 482 25 147 5 C. Vesting of LTIP awards For performance in multi-year periods: 6 2018 award (2018-2020) – – – – – 55 7 2019 award (2019-2021) 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 8 Total remuneration (A+B+C+D) 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). 108 Jupiter Fund Management plc | Annual Report and Accounts 2021 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. | | Threshold | Target | Maximum | | | | --- | --- | --- | --- | --- | --- | | | performance | performance | performance | Actual | Percentage | | Performance metric Primary measure | (25% vesting) | (50% vesting) | (100% vesting) | performance | 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 | Proportion of mutual | 40% 60% 80% 62% 55% Our investment performance has remained | | | --- | --- | --- | --- | | outperformance | funds (weighted by | | strong, in particular with 58% of our mutual fund | | | AUM) achieving | | AUM performing above median over three years | | | performance of first or | | and 80% over one year. We have hit record | | | second quartile over | | levels of AUM which has been driven by | | | one year (25% weighting) | | investment performance. As at 31 December 2021 | | | and three years (75% | | our AUM was £60.5bn, an increase of £1.8bn from | | | weighting). | | 2020. | 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) Jupiter Fund Management plc | Annual Report and Accounts 2021 109 GOVERNANCE REMUNERATION REPORT continued # 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 Issue/term | 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 SFOR framework and the new Article classifications, including both existing and the launch of new SFOR-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-emission 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 Sustainability 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 £15m 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 | 110 Jupiter Fund Management plc | Annual Report and Accounts 2021 # 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 | Quotation | | --- | --- | --- | | 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 Megham 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 CRG 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 11 ### GOVERNANCE REMUNERATION REPORT continued Implementation in 2021 • The bonus outcomes for Executive Directors In consideration of the above, the Committee were in line with the overall variable was therefore satisfied that the balanced compensation experience for other scorecard was a fair outcome consistent with the employees of the Group. shareholder, client and wider workforce • There were no risk or regulatory compliance experience during the year. It has therefore issues at a Group or individual level for which made no discretionary adjustments to the bonus the Committee considers it appropriate to scorecard outcomes. make any variable compensation adjustments A summary of the Committee’s conclusions is set for Executive Directors. out in the bonus outcomes table below. 2021 Executive Director bonus outcomes (audited information) | | Outcome (as | Weighted | Andrew Formica, | | Wayne Mepham, | | Edward Bonham | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | percentage of | percentage of | Chief Executive | | | Chief Financial | | Carter, Vice | | 2021 scorecard performance metric | maximum) Weighting | maximum | | Officer £’000 | | Officer £’000 | Chairman £’000 | | Profitability 100% 40% 40% 773 315 1 Profitability 100% 61.5% 61.5% 19 Investment outperformance 55% 25% 13.8% 266 108 1 Investment outperformance 55% 38.5% 21.2% 6 Strategic goals and personal performance 88.6% 35% 31% 599 244 – Totals 1,639 668 25 2 Outcome as percentage of maximum 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 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2022 | 2021 | 2020 | | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | Fees 235 196 32 92 94 94 102 85 79 75 42 – 24 – 1 Benefits – – – – – – – – – – – – – – 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. 112 Jupiter Fund Management plc | Annual Report and Accounts 2021 External directorships Securities Group plc and ITV plc are for the and annual bonus (respectively £78k, £10k and period 1 January 2021 to 6 May 2021 when Edward £49k in relation to the remainder of 2021). Executive Directors are not permitted to hold was an Executive Director of the Company. | external directorships or offices without the | | Edward’s outstanding share awards will continue | | --- | --- | --- | | Board’s prior approval. During the year two | In all instances Andrew and Edward have been | to vest on their original terms. He did not receive | | Executives held non-executive director positions | permitted to retain their fees for these | an LTIP for 2021. | | with other companies. Andrew Formica served as | appointments. | | Payments for loss of office (audited Non-Executive Director on the Board of information) Payments to exiting Directors (audited Hammerson plc. This role was held by Andrew information) No payments were made for loss of office in prior to his appointment to Jupiter, and the Board No new payments were made to any exiting 2021. agreed Andrew could continue serving. During Directors during 2021. 2021, Andrew received fees of £66,500 from Hammerson plc. Payments to former Directors (audited information) Edward Bonham Carter served as a Non- Edward Bonham Carter stepped down from the Executive Director of Land Securities Group plc, Board on 6 May 2021 but continued to work for for which he was paid fees of £29,704. Edward the Company as Director of Stewardship and also served as the Senior Independent Director to Corporate Responsibility. In that role, he the Board of ITV plc; his fees from this position continues to receive a salary, pension provision for 2021 were £33,276. The fees for both Land 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 | Jupiter’s underlying EPS fell by 3.4% over the | 0.0% of condition vesting | | --- | --- | --- | | • 0% vesting for 5% growth or below; | performance period inclusive of performance fees and | (0.0% of total award) | | • 100% vesting for 25% growth or above; and | fell by 2.1% exclusive of performance fees. | | | • Straight-line vesting between these points. | Jupiter’s underlying EPS growth over the performance | | period did not therefore exceed the 5% threshold. 1 Investment outperformance Jupiter’s investment performance was such that: 60.5% of condition vesting The proportion of all of Jupiter’s assets (weighted by AUM) • 57.8% of funds (weighted by AUM) performed above (30.3% of total award) achieving above median performance relative to their peer median or above the benchmark over the three-year group (retail) or above benchmark performance (institutional) period to 31 December 2021; and weighted: • 66.3% of funds (weighted by AUM) performed above • 25% over the three-year period to 31 December preceding median or above the benchmark over the five-year | the vesting date; and | | period to 31 December 2021. | | --- | --- | --- | | • 75% over the five-year period to 31 December preceding | On a weighted basis, 64.2% of funds performed above | | | the vesting date. | median or above the benchmark. | | • 0% vesting for less than 50%; • 25% vesting for 50%; • 100% vesting for 80%; and • Straight-line vesting between these points. 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 113 ### GOVERNANCE REMUNERATION REPORT continued Implementation in 2022 The following section provides an overview as to The 2022 bonuses will be determined on the how each element will be applied in 2022. normal timetable and in line with the process below. Base salary The performance measures for the 2022 annual The CEO’s base salary will remain at £455,000. The bonus will be set within the following balanced CFO’s base salary will increase by 4.8% in 2022 to scorecard. 65% of these measures will be £330,000 as disclosed in the 2020 Directors’ corporate quantitative measures, with clearly Remuneration Report. determined ‘Threshold’, ‘On-Target’ and • Andrew Formica: £455,000 (2021: £455,000); ‘Maximum’ goals. The remaining objectives will be | • Wayne Mepham: £330,000 (2021: £315,000). | strategic and individual measures. | | --- | --- | | Annual bonus | Determination of bonus amounts is not formulaic; | | Annual bonuses in respect of 2022 (inclusive of | in addition to reviewing each of the performance | | any deferred bonus award) will continue to be | measures, the Committee will take a holistic view | | subject to the following individual caps as a | of the overall performance of the Company for | | percentage of base salary in line with the new | the year to ensure that any bonus amounts | | Remuneration Policy: | appropriately reflect the experience of | shareholders. Where performance measures • Andrew Formica: 425%; produce an outcome which does not align with • Wayne Mepham: 250%. that of shareholders, the Committee may exercise its discretion as it considers appropriate. 2022 balanced scorecard Area Metric Performance measures Corporate Profitability • Measured through underlying PBT quantitative Investment • Measured through the proportion of mutual funds achieving first or second quartile performance and (65%) outperformance 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 Client relationships • Evidence of diversification of client relationships, deepening client relationships through client longevity individual (35%) 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 • Evidence of progression towards Diversity and Inclusion targets Responsibility • Further develop the ESG credentials of the Group Personal performance • Achievement against specific personal performance objectives Underpin Risk and regulatory • The Committee considers the checkpoints set out on page 122 when exercising its judgement to compliance 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 114 Jupiter Fund Management plc | Annual Report and Accounts 2021 | Targets for each performance measure will be set | The determination of variable pay awards in | In addition to the performance measures outlined | | --- | --- | --- | | by the Committee in line with the framework | relation to 2022 performance will continue to be | on the previous page, the Committee considers | | described on page 105. The Committee considers | assessed with the application of judgement, | the checkpoints set out on page 122 when | | more specific details of the 2022 performance | taking into account a holistic assessment of | exercising its judgement to determine the overall | | measures and targets to be commercially | Group and individual performance. The balanced | variable compensation spend for any particular | | sensitive and therefore further details of the | scorecard, set out in the table on page 112, will | year, and also considers individual risk behaviours | | targets and weightings for each of these | allow the Committee to assess performance | when assessing individual awards. | | measures and performance against each will be | against key financial and strategic metrics. The | | | provided in the 2022 Directors’ Remuneration | Committee’s assessment against these metrics | | | Report. | and the decision about any variable pay awards | | will be clearly disclosed to shareholders. 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 • Delivered as either deferred Jupiter shares and/or deferred units in a Jupiter fund. Choice between these can be made fund units in a Jupiter fund. Choice between these can be by the Executive Director nearer the payment date. made by the Executive Director nearer the payment date. • Immediate vesting, but subject to a subsequent six-month Where the Executive Director has not yet met the minimum post-vesting holding period. 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 1 | | Underlying EPS Growth | Jupiter’s underlying EPS growth over | Proportion of the award subject | | --- | --- | --- | --- | | 40% | Jupiter’s underlying EPS must achieve at least 5% | the performance period | to the EPS performance condition | | | growth over the performance period | | that will vest | | | | Less than 5% growth | 0% | | | | 25% growth or above | 100% | | | | Any other percentage | Sliding scale between the relevant | percentages above | | Jupiter’s investment outperformance | Proportion of funds (weighted | Proportion of the award subject | | --- | --- | --- | --- | | 30% | The proportion of all of Jupiter’s assets (weighted by | by AUM) achieving above median/ | to the investment | | | AUM) achieving above median performance relative | benchmark performance | outperformance condition that | | | to their peer group (retail) or above benchmark | | will vest | | | performance (institutional) weighted: | Less than 50% | 0% | | | 25% over the three-year period to 31 December | 50% | 25% | | | preceding the vesting date; and | 80% or above | 100% | | | 75% over the five-year period to 31 December | Any other percentage | Sliding scale between the relevant | | | preceding the vesting date | | percentages above | | | Net flows | Net flows over the performance period | Proportion of the award subject | | 30% | Cumulative net flows for the Group over the | | to the net flows performance | | | performance period | | condition that will vest | | | | Less than £1.5bn | 0% | | | | £1.5bn | 25% | | | | £4.5bn or above | 100% | | | | Any other percentage | 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 115 ### GOVERNANCE REMUNERATION REPORT continued Implementation in 2022 LTIP awards continued | | scorecard and the LTIP. Given the longer time | In addition to a risk and compliance assessment, | | --- | --- | --- | | These awards will be granted in March 2022 and | horizon over which LTIP assesses performance, | LTIP awards are subject to an underlying business | | will vest on the third anniversary of grant, subject | both a three- and five-year outperformance | performance underpin. The Committee will | | to the achievement of the stretching | measure are included. | compare the vesting outcome for LTIP awards | | performance conditions, as set out in the table | | against shareholder and client experience over | EPS growth is important to shareholders and is on the previous page. The awards will also be the same performance period. the best measure of Jupiter’s successful execution subject to a two-year post-vesting holding period of its growth strategy. in line with the Remuneration Policy. There is no payout under this performance The 2022 LTIP award values will be as follows: condition at threshold performance, or where • Andrew Formica: £1,706,250 (375% of salary); EPS growth is less than 5% over the period. • Wayne Mepham: £742,500 (225% of salary). Net flows are a strong indicator of client Investment outperformance is critical to Jupiter’s confidence in Jupiter’s products, and are a key clients and the Company’s long-term success. Its determinant of changes in future revenue importance is recognised through its use as a streams for the business. performance measure within the annual bonus 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 2022 annual fee 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 Senior Independent Director (from 6 May 2021) 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 116 Jupiter Fund Management plc | Annual Report and Accounts 2021 Directors’ shareholdings (audited information) | | | | | | | | | | | Unvested | | | Unvested | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | Unvested ordinary | | | | | | options, vesting | | | options, vesting | | | | | | | Shareholding as a | | | | | | | shares held at | | Total | Vested but | | not subject to | | | | subject to | | Total options | | | | | percentage | | | Ordinary shares | | 31 December 2021 | | ordinary shares | | unexercised | | performance | | | performance | | | over ordinary | | | | | of salary | | | | held at | | (subject to | | held at | options at | | conditions at | | | conditions at | | | shares held at | | Shareholding as | | including vested | | | | 31 December 2021 | | | continued | 31 December | | 31 December | | 31 December | | | 31 December | | | 31 December | | a percentage | | | and unvested | | Director | (no restrictions) | | | employment) | | 2021 | | 2021 | | | 2021 | | | 2021 | | 2021 | | of salary | 3 | 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% 1 Edward Bonham Carter 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 – – – – – – 2 Jonathon Bond 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 – – – – – – 4 Chris Parkin – – – – – – – – – 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 117 ### GOVERNANCE REMUNERATION REPORT continued Share awards (audited information) DBP – options over Jupiter shares Options exercised/lapsed | | | Options held at start of year Options granted during the year | | | | | | | | | | | | | | during the year Options held at end of year | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | Number of | | | | | | | | | | | | | Number | Number | | Number | | | | | | | shares under | | | | | | | | | | | | | of shares | of shares | | of shares | | | | | | | option held | | | Market | | | | | | Price | | | | under | under | | under | | | | | | | as at 1 January | | | value | | | | | | used to | | Number | | option | option | option held | | | | | | | | 2021 including | | | per share | | | | Face | determine | | | of shares | | lapsed | exercised | | | as at | Earliest | Latest | | | Year | | dividend | | at date | | Grant | value at | | number | | | under | | during | during | 31 December | | | exercise | exercise | | Director | granted | adjustments | | 1,2 | of grant | 3 | date | | award | of shares | | 3 | option | 1,2 | the year | the year | | | 2021 | date | date | 4 Andrew 2020 51,353 £3.11 – – – – – 54,874 – 5 Sept 5 March Formica (in respect 2021 2022 of 2019) | | | 51,353 £3.11 – – – – – – 54,874 5 Sept | | | | | 5 March | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | 2022 | | 2023 | | | | 51,354 £3.11 – – – – – – 54,876 5 Sept | | | | | 5 March | | | | | | | | | 2023 | | 2024 | | | 2021 | | – – 9 March | | £621,800 £2.82 79,005 – – 79,005 9 Sept | | 9 March | | | (in respect | | | | 2021 | | 2022 | | 2023 | of 2020) | 79,005 – – 79,005 9 Sept | | 9 March | | | --- | --- | --- | --- | | | 2023 | | 2024 | | 79,007 – – 79,006 9 Sept | | 9 March | | | | 2024 | | 2025 | 5 2021 – – 9 March £310,900 £2.82 118,509 – 118,509 51,354 5 Sept 9 March (in respect 2021 2021 2022 of 2020) 6 Wayne 2019 12,518 £3.43 – – – – – 12,518 – 1 March 1 Sept Mepham (Buyout 2021 2021 Award) 2019 21,514 £3.43 – – – – – – 22,989 1 March 1 Sept (Buyout 2022 2022 Award) 7 2020 24,114 £3.11 – – – – – 25,767 – 5 Sept 5 March (in respect 2021 2022 of 2019) | | | 24,114 £3.11 – – – – – – 25,767 5 Sept | | | | | 5 March | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | 2022 | | 2023 | | | | 24,116 £3.11 – – – – – – 25,769 5 Sept | | | | | 5 March | | | | | | | | | 2023 | | 2024 | | | 2021 | | – – 9 March | | £241,175 £2.82 30,643 – – 30,643 9 Sept | | 9 March | | | (in respect | | | | 2021 | | 2022 | | 2023 | of 2020) | 30,643 – – 30,643 9 Sept | | 9 March | | | --- | --- | --- | --- | | | 2023 | | 2024 | | 30,644 – – 30,644 9 Sept | | 9 March | | | | 2024 | | 2025 | 8 2021 – – 9 March £120,588 £2.82 45,965 – 45,965 – 9 Sept 9 March (in respect 2021 2021 2022 of 2020) 118 Jupiter Fund Management plc | Annual Report and Accounts 2021 Options exercised/lapsed | | | | Options held at start of year Options granted during the year | | | | | | | | | | | | | | during the year Options held at end of year | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | Number of | | | | | | | | | | | | | Number | Number | | Number | | | | | | | | | shares under | | | | | | | | | | | | | of shares | of shares | | of shares | | | | | | | | | option held | | | Market | | | | | | Price | | | | under | under | | | under | | | | | | | | as at 1 January | | | value | | | | | used to | | | Number | | option | option | option held | | | | | | | | | | 2021 including | | | per share | | | | Face | determine | | | of shares | | lapsed | exercised | | | as at | Earliest | | Latest | | | | Year | | dividend | | at date | | Grant | value at | | number | | | under | | during | during | 31 December | | | exercise | | exercise | | Director | | granted | adjustments | | 1,2 | of grant | 3 | date | | award | of shares | | 3 | option | 1,2 | the year | the year | | | 2021 | date | | date | | Edward | | 2018 | | 33,737 £4.90 – – – – – – 33,737 20 March | | | | | | | | | | | | | | | | | | 20 Sept | | | Bonham | (in respect | | | | | | | | | | | | | | | | | | | | 2021 | | 2021 | | Carter | of 2017) | | | | | | | | | | | | | | | | | | | | | | | 9 2019 9,188 £3.52 – – – – – 9,188 – 22 Sept 22 March (in respect 2020 2021 of 2018) | 9,188 £3.52 – – – – – – 9,188 22 Sept | | 22 March | | | --- | --- | --- | --- | | | 2021 | | 2022 | | 9,190 £3.52 – – – – – – 9,190 22 Sept | | 22 March | | | | 2022 | | 2023 | 10 2020 11,315 £3.11 – – – – – 11,315 – 5 Sept 5 March (in respect 2020 2021 of 2019) 2020 7,543 £3.11 – – – – – – 7,543 5 Sept 5 March (in respect 2021 2022 of 2019) | | | 7,543 £3.11 – – – – – – 7,543 5 Sept | | | | | 5 March | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | 2022 | | 2023 | | | | 7,545 £3.11 – – – – – – 7,545 5 Sept | | | | | 5 March | | | | | | | | | 2023 | | 2024 | | | 2021 (in | | – – 9 March | | £73,575 £12.82 8,707 – – 8,707 9 Sept | | 9 March | | | respect of | | | | 2021 | | 2022 | | 2023 | 2020) | | | | | | 8,707 – – 8,707 9 Sept | | 9 March | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | 2023 | | 2024 | | | | | | | 8,707 – – 8,707 9 Sept | | 9 March | | | | | | | | | 2024 | | 2025 | | | 2021 (in | – – 9 March | | £36,788 £12.82 13,060 – – 13,060 9 Sept | | | 9 March | | | respect of | | | 2021 | | | 2021 | | 2022 | 2020) 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 119 ### GOVERNANCE REMUNERATION REPORT continued DBP – options over Jupiter fund units Options held at start of year Options granted during the year Options held at end of year Number of | | | | | Number of | Market | | | | | Price | | units under | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | fund units | value | | | | used to | | Number | | option | | | | | | | | under option | per unit | | | Face | determine | | of units | held as at | | Earliest | Latest | | | | | Year | held as at | at date | | Grant | value at | number | | under | 31 December | | exercise | exercise | | Director | | | granted | 1 January 2021 | of grant | 1 | date | award | of units | | option | | 2021 | date | date | | | Wayne | | 2019 | 35,259 £1.11 – – – – – 1 March | | | | | | | | | | | 1 Sept | | | Mepham | (Buyout | | | | | | | | | | | | 2021 | 2021 | Award) 2019 2,107 £27.52 – – – – 2,107 1 March 1 Sept (Buyout 2022 2022 Award) 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 exercised/lapsed | | | Options held at start of year Options granted during the year | | | | | | | | | | | | | | | during the year Options held at end of year | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | Number of | | | | | | | | | | | | Number | | | | | | | | | | | shares under | | | | | | | | | | | | | of shares | Number | | | Number | | | | | | | option held | | | Market | | | | | | Price | | | | under | of shares | | | of shares | | | | | | | as at 1 January | | | value | | | | | used to | | | Number | | option | under option | | under option | | | | | | | | 2021 including | | | per share | | | | Face | determine | | | of shares | | lapsed | exercised | | | held as at | | Earliest | Latest | | | Year | | dividend | | at date | | Grant | value at | | number | | | under | | during | | during | 31 December | | | exercise | exercise | | Director | granted | adjustments | | 1,2 | of grant | 3 | date | | award | of shares | | 3 | option | 1,2 | the year | the year | | | | 2021 | date | date | 5 | Andrew | 2019 433,033 £3.52 – – – – – – 462,107 | | | 22 March | | 22 Sept | | | --- | --- | --- | --- | --- | --- | --- | --- | | Formica | | | | | 2024 | | 2024 | | | 2020 589,160 £3.11 – – – – – – 629,572 5 March | | | | | 5 Sept | | | | | | | | 2025 | | 2025 | | | 2021 9 March | | £1,706,250 £2.82 650,395 – – 650,395 9 March | | | 9 Sept | | | | | 2021 | | | 2026 | | 2026 | | Wayne | 2020 233,074 £3.11 – – – – – – 233,074 5 March | | | | | 5 Sept | | | Mepham | | | | | 2025 | | 2025 | | | 2021 9 March | | £708,750 £2.82 270,164 – – 270,164 9 March | | | 9 Sept | | | | | 2021 | | | 2026 | | 2026 | 4 Edward 2016 28,382 £4.09 – – – – – 28,382 – 1 April 1 April Bonham 2019 2021 6 | Carter | 2017 20,443 £4.21 – – – – – – 20,443 29 March | | 29 March | | | --- | --- | --- | --- | --- | | | | 2020 | | 2022 | | | 2018 61,239 £4.61 – – – – 41,031 – 20,208 20 March | | 20 Sept | | | | | 2023 | | 2023 | 5 | 2019 56,075 £3.52 – – – – – – 56,075 | 22 March | | 22 Sept | | | --- | --- | --- | --- | --- | | | | 2024 | | 2024 | | 2020 62,152 £3.11 – – – – – – 62,152 5 March | | | 5 Sept | | | | | 2025 | | 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. 120 Jupiter Fund Management plc | Annual Report and Accounts 2021 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 acquired/forfeited | Shares held at start of year | | | | | | | | during the year Shares held at end of year | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Number of | | | | | | | | | | Price | | | Number of | | Number of | | | | shares subject | | | Market | | | | | | used to | | | | | shares | shares subject | | | | to award as at | | | value | | | | Face | | determine | | Number of shares | | forfeited | | to award as at | | Earliest | | | 1 January | | per share | | Award | value at | | | number | | awarded during | | during the | | 31 December | | vesting | | | | 2021 | at award | 1 | date | | award | | of shares | | 1 | the year | | year | | 2021 | 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 lapsed Options held at start of year Options granted during the year during the year Options held at end of year Number | | | Number of | | Market | | | | | Price | | | | | Number | | of shares | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | shares under | | value | | | | used to | | | | | | of shares | under option | | | | | | | | option as at | | per share | | | Face | determine | | | | Number | under option | | | held as at | | Earliest | Latest | | | Year | 1 January | | at date | Grant | value at | | number | | | | of shares | lapsed during | | 31 December | | | exercise | exercise | | Director | granted | | 2021 | of grant | date | | award | of shares | | 1 | under option | | | the year | | | 2021 | date | date | | Andrew | 2020 10,909 £1.65 – – – – – 10,909 1 Dec 2023 31 May 2024 | | | | | | | | | | | | | | | | | | | Formica Wayne 2020 18,181 £1.65 – – – – – 18,181 1 Dec 2025 31 May 2026 Mepham 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 121 ### GOVERNANCE REMUNERATION REPORT continued Risk and reward at Jupiter Checkpoints Discussion The Committee gives careful consideration to the Capital base and liquidity linkage between risk and reward to ensure the Can Jupiter afford the proposed variable compensation spend? desired behaviours and culture are being • Sufficient liquidity to make payments? rewarded. This includes ensuring the reward • Consider impact on Jupiter’s capital base. structures are consistent with and promote Request and consider input from the Chief Financial Officer. sound and effective risk management, and ensuring remuneration outcomes appropriately Underlying financial performance reflect the risk profile and behaviours of the Does Jupiter’s underlying financial performance support the proposed variable Group and each individual. This is demonstrated compensation spend? through a variety of reward features and • Consider performance against financial KPIs listed in the Annual Report. processes that ensure alignment to risk • Is there any reason to believe the financial results are not a fair reflection of underlying considerations throughout the organisation. For performance? example: Request and consider input from the Audit and Risk Committee. • When assessing the overall variable Risk compensation spend as described on page 112, the Committee considers a number of Does Jupiter’s risk profile and risk management support the variable compensation checkpoints, as described in the checkpoints spend? Are any adjustments required? chart on the right hand side of this page. • Consideration of the Enterprise Risk Management report. • For all employees there is consideration of • Are all risks being suitably monitored and managed? Have there been any material failures of conduct and performance against risk and risk management (or any near misses) in the year? compliance criteria, ensuring there is risk • Consider whether profit reflects current and future risks and timing and likelihood of future adjustment at an individual level. revenues. • Assessment of individual performance includes Request and consider input from the Chief Risk Officer and the Audit and Risk Committee. consideration of financial and non-financial Compliance metrics. This ensures that the way in which Have there been any material compliance breaches in the year? performance has been achieved is taken into account, for example, in terms of risk and • Are any adjustments required? repeatability. • Consideration of any significant compliance breaches and/or near misses. • All employees with bonuses of over £50,000 • Consideration of any fines received in the year and any ongoing regulatory investigations. have a portion of bonus deferred into shares Request and consider input from the Chief Risk Officer. and/or fund units. In total approximately one quarter of employees are subject to some kind Commercial of deferral, ensuring their interests are aligned Are there any commercial drivers to support adjustments to the variable compensation with the long-term success of the Group and spend? with the interests of clients. • Consider the market for talent and whether the spend would likely result in any significant • Shareholding requirements apply to Executive over/underpayment against the market. Directors, further enhancing the link to the Reputational Group’s long-term success. • For Executive Directors all variable Are there any reputational drivers to support adjustments to the variable compensation spend? remuneration is subject to malus and clawback • Has there been any reputational damage to the Group in the year? provisions, whereby incentive awards may be reduced, withheld or reclaimed in certain • Will the proposed variable compensation pool quantum have any adverse reputational circumstances, including where there has been impact on the Group? a material failure of risk management. Variable compensation spend and total compensation ratio approval. 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. 122 Jupiter Fund Management plc | Annual Report and Accounts 2021 ### 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. ### 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 Sharewave 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. ![img-8.jpeg](img-8.jpeg) — Jupiter — FTSE 250 Index — FTSE 350 – Investment Banking and Brokerage Services Jupiter Fund Management plc | Annual Report and Accounts 2011 123 GOVERNANCE REMUNERATION REPORT continued 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} | 2,796 | 2,437^{1} | 3,546 | 2,014 | 1,764^{1} | 1,759 | 2,514 | | CEO bonus as a percentage of maximum potential^{2} | N/A | N/A | N/A | N/A | N/A | N/A | 55% | 56%^{1} | 64% | 85% | | Long-term incentive vesting rates against maximum opportunity^{4} | N/A | N/A | 46% | 73% | 44%^{1} | 74%^{1} | 43% | 32% | N/A^{1} | 30%^{2} | 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 provided 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 £194. 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 2015 in the first LTIP awards granted to the CEO after listing were in 2015. 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 | 15th Percentile | Median | 75th Percentile | | --- | --- | --- | --- | --- | | 2019 | Option A | 27.1 | 18.1 | 9.1 | | 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 £194. 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. | | 15th 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 | 80 | 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. 124 Jupiter Fund Management plc | Annual Report and Accounts 2021 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 | | | change in | | | change in | | | change in | | | change in | | | change in | | | salary/fee | | taxable benefits | | | annual bonus | | | | salary/fee | | taxable benefits | | | annual bonus | | | | (2020 to 2021) | | (2020 to 2021) | | 6 | (2020 to 2021) | | | (2019 to 2020) | | | (2019 to 2020) | | | (2019 to 2020) | | | Andrew Formica – CEO 0% 9% 32% 2% 14% 16% Wayne Mepham – CFO 5% 9% 38% 0% 14% 16% 1 Edward Bonham Carter – Vice Chairman 0% 9% -49% 0% 16% 12% 2 Nichola Pease – Chairman 0% 0% N/A N/A N/A N/A 1 Jonathon Bond – 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 3 Roger Yates – 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 4 David Cruickshank – NED N/A N/A N/A N/A N/A N/A 4 Dale Murray – NED N/A N/A N/A N/A N/A N/A 5 Employees of Jupiter Group 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 125 ### GOVERNANCE REMUNERATION REPORT continued 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. | | 1 | | 2 | | | --- | --- | --- | --- | --- | | Underlying profit before tax | | Total employee remuneration | | Dividends declared | | (£m) | | (£m) | | (£m) | 216.7 213.0 179.0 161.9 111.2 94.6 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. Percentage Percentage of total of total For votes cast Against 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 126 Jupiter Fund Management plc | Annual Report and Accounts 2021 20 20 20 21 21 21 ## 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 Commentary on the development and performance in the year ended 31 December 2021, and likely future developments in the performance 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’ Information concerning Directors’ contractual arrangements and entitlements under share-based remuneration arrangements is remuneration given in the Remuneration Report on pages 102 to 126. Environmental The Group’s environmental performance data, including the absolute Scope 1 and 2 emissions for 2021, can be found in the performance Corporate Responsibility section of the Strategic Report on page 47 and the Group’s TCFD report on pages 45 to 48. Employees in the Information concerning the involvement of employees in the business is also given in the Strategic report on pages 36 to 39 and business on page 59. Stakeholder How we consider stakeholder interests, and our s.172 statement, can be found on pages 58, 59, 81 and 82. interests Important events There have been no important events affecting the Company since the end of the year. affecting the Company since the end of the year Listing Rules and Disclosure Guidance and Transparency Rules Disclosures DTR 4.1.5R, Information which is the required content of the Management report can be found in the Strategic report and in this DTR 4.1.8R Directors’ report. and DTR 4.1.11R 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 Not applicable subsidiary Participation by parent of a placing by a listed subsidiary Not applicable Publication of unaudited financial information Page 180 Compliance This statement has been provided within the Governance section on page 71 and is deemed to form part of this Directors’ | statement – DTR 7.2 | report. | | --- | --- | | Internal control and | A description of the Company’s financial reporting, internal control and risk management processes can be found on pages 60 to | | risk management | 67. | systems – DTR 7.2.5 Structure of 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 capital and 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 voting rights class of ordinary shares which carry the right to attend, speak and vote at general meetings of the Company. The holders of – DTR 7.2.6 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 127 GOVERNANCE 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 2015, 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 Trustee 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 3.33% 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, 95,560,825 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 by the Company | Percentage interest % | | | Süchester International Investors LLP | 99,670,618 | 18.02 | | | TA Associates | 84,115,278 | 15.21 | | | M&G plc | 28,335,957 | 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 AGAF 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 | | | 128 Jupiter Fund Management plc | Annual Report and Accounts 2021 | Directors' interests | The Directors' interests in the Company's shares are set out in the Remuneration report on page 97. 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 Menart, TA Associates were issued 84,35,278 ordinary shares in the Company, representing 15.25% 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 2021. 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 2021. | | 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 CEO. | | 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 18(2)(b)), there are no agreements in place between the Company and any Director or employee for loss of office in the event of a takeover. | Jupiter Fund Management plc | Annual Report and Accounts 2011 129 ### GOVERNANCE DIRECTOR’S REPORT continued Stakeholders Supplier oversight Jupiter has ten significant oversight relationships: and significant • SS&C Technologies – Transfer Agent for unit trusts contracts • 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 PwC were reappointed as external auditors following a tender conducted in 2014. An external audit tender took place during 2021 auditors and audit and the process and recommendation have been outlined in the Audit and Risk Committee report on page 99. information Statements Directors’ The statement of Directors’ responsibility for preparing the Annual Report and Accounts is set out on page 131 and is deemed to responsibility form part of the Directors’ report. Within this, the Directors have included a statement that the Annual Report and Accounts statements 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 In accordance with Provision 31 of the Code, the Directors have assessed the prospects of the Group over a longer period than of viability 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 ## DIRECTORS’ RESPONSIBILITY ## AND COMPLIANCE STATEMENTS Statements relating to the preparation of the Financial The Directors’ responsibility for accounting records Statements The Directors are responsible for keeping adequate accounting records that The Directors are responsible for preparing the Annual Report, the are sufficient to show and explain the Group’s and Company’s transactions Remuneration Report and the Financial Statements in accordance with and disclose with reasonable accuracy at any time the financial position of applicable law and regulations. Company law requires the Directors to the Group and Company and enable them to ensure that the Financial prepare Financial Statements for each financial year. Under that law the Statements and the Directors’ Remuneration Report comply with the Directors have prepared the Group and Company Financial Statements in Companies Act 2006. accordance with International Accounting Standards in conformity with the The Directors’ responsibility for the safekeeping of assets requirements of the Companies Act 2006. Additionally, the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules require The Directors have examined the steps in place for ensuring the prevention the Directors to prepare the Group Financial Statements in accordance with and detection of fraud and other irregularities. The procedure is examined UK-adopted International Financial Reporting Standards (IFRS) and with the and tested on a regular basis. The Board is satisfied it is understood and is requirements of the Companies Act 2006 as applicable to companies operated well, and accordingly that the assets of the Company are reporting under those standards. safeguarded and protected from fraud and other irregularities. The Directors’ review of the Financial Statements The Directors’ responsibility for information The Directors undertook a detailed review of the Financial Statements in The Directors are responsible for the maintenance and integrity of the February 2022. Following this examination, the Board was satisfied that the Company’s website. Legislation in the United Kingdom governing the Financial Statements for 2021 give a true and fair view of the state of affairs preparation and dissemination of Financial Statements may differ from of the Group and the Company and of the profit or loss of the Group for legislation in other jurisdictions. that period. Before approving the Financial Statements, the Board satisfied Statement of Directors’ responsibilities itself that in preparing the statements: The Directors consider that the Annual Report and Accounts, taken as a • suitable accounting policies had been selected and consistently applied; whole, is fair, balanced and understandable and provides the information • the judgements and accounting estimates that have been made were necessary for shareholders to assess the Group’s and Company’s position reasonable and prudent; and and performance, business model and strategy. • where applicable International Accounting Standards in conformity with Each of the Directors, whose names and functions are listed in the the requirements of the Companies Act 2006 have been adopted and, Directors’ profile on pages 72 to 73 confirm that, to the best of their for the Group, UK-adopted IFRS, have been followed and that there were knowledge: no material departures. • the Group and Company Financial Statements, which have been prepared The Directors’ review of going concern in accordance with International Accounting Standards in conformity The Financial Statements have been prepared on the going concern basis, with the requirements of the Companies Act 2006, give a true and fair the Directors having determined that the Company is likely to continue in view of the assets, liabilities, financial position and profit of the Group business for at least 12 months from the date of this report. and profit of the Company; and • the Directors’ report contained in the Annual Report and Accounts The Directors’ review of current position, prospects and includes a fair review of the development and performance of the principal risks business and the position of the Group and Company, together with a Supported by the Audit and Risk Committee, the Directors have completed description of the principal risks and uncertainties that it faces. a robust review and assessment of the principal risks in the business making In the case of each director in office at the date the Directors’ report is use of the Enterprise Risk Framework which operates in all areas of the approved: Company. The framework ensures that the relevant risks are identified and managed and that information is shared at an appropriate level. Full details • so far as the director is aware, there is no relevant audit information of of these risks are provided in the Risk management section of the Strategic which the Group’s and Company’s auditors are unaware; and report. The Board subjected the Enterprise Risk Framework to a detailed • they have taken all the steps that they ought to have taken as a director review in December. The Directors found it was an effective mechanism in order to make themselves aware of any relevant audit information and through which the principal risks and the Company’s risk appetite and to establish that the Group’s and Company’s auditors are aware of that tolerances could be tested and challenged. information. On behalf of the Board Wayne Mepham Chief Financial Officer 24 February 2022 Jupiter Fund Management plc | Annual Report and Accounts 2021 131 FINANCIAL STATEMENTS # CONSOLIDATED INCOME STATEMENT for the year ended 31 December 2021 | | Notes | 2020 £m | 2019 £m | | --- | --- | --- | --- | | Revenue | 1.2 | 417.8 | 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) | (11.1) | | **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. # CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 December 2021 | | 2020 £m | 2019 £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 # CONSOLIDATED BALANCE SHEET at 31 December 2021 | | Notes | 2021 £m | 2020 (revised) £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 | 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** Jupiter Fund Management plc | Annual Report & Accounts 2021 133 ### FINANCIAL STATEMENTS ## CONSOLIDATED STATEMENT OF CHANGES ## IN EQUITY for the year ended 31 December 2021 Foreign | | | | | | Other | | currency | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | Own share | | reserves | | | translation | | Retained | | | Non-controlling | | | Total | | Share capital | | reserve | | (restated) | | 1 | reserve | | earnings | | Total | | interests | | equity | | | £m | | £m | | | £m | | £m | | £m | £m | | | £m | £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 1 tax (restated) 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) 1 Total transactions with owners (restated) 1.9 0.1 242.1 – (75.7) 168.4 – 168.4 1 At 31 December 2020 (restated) 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 # CONSOLIDATED 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 | 22 | 237.5 | 111.8 | | 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) | (1.1) | | 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 | | 13 | 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 | | — | (11.0) | | Dividends paid | 21 | (109.8) | (83.9) | | Purchase of shares by IIBT | | (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 | | 51.5 | 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)** | **(119.8)** | | **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** | Jupiter Fund Management plc | Annual Report & Accounts 2021 135 FINANCIAL STATEMENTS # NOTES TO THE GROUP FINANCIAL STATEMENTS ## 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 101 to 103. ## 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 | 2020 £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. 136 Jupiter Fund Management plc | Annual Report & Accounts 2020 # 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. | | 2020 £m | 2020 £m | | --- | --- | --- | | Management fees | 509.5 | 426.6 | | Initial charges and commissions | 3.5 | 0.3 | | Performance fees | 93.0 | 73.6 | | Revenue | 607.8 | 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) | (1.1) | | 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 | 2020 £m | 2020 £m | | --- | --- | --- | | Pooled funds | 591.9 | 462.2 | | Segregated mandates | 25.9 | 18.5 | | Revenue | 607.8 | 500.5 | Jupiter Fund Management plc | Annual Report & Accounts 2021 137 FINANCIAL STATEMENTS Notes to the Group Financial Statements continued ### 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 | 2020 £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 | 2020 £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: | | 2020 £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 | | | 2020 £m | 2020 £m | | Auditors' remuneration | | | | 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 £nd (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. 138 Jupiter Fund Management plc | Annual Report & Accounts 2021 #### 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. | | 2020 £m | 2019 £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 (DED) 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(1), 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 (LTP) 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: | | 2020 £m | 2019 £m | | --- | --- | --- | | Impact on the income statement of a change in leases assumptions | | | | +5% | (2.1) | (0.6) | | -5% | 0.6 | 0.5 | | Impact on the income statement of a change in performance condition vesting assumptions | | | | +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 LTP 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. Jupiter Fund Management plc | Annual Report & Accounts 2021 139 FINANCIAL STATEMENTS Notes to the Group Financial Statements continued # Average number of employees The monthly average number of persons employed by the Group during the year, including Executive Directors, by activity is: | | 2020 Number | 2020 Number | | --- | --- | --- | | Fund management | 139 | 96 | | 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: | | 2020 £m | 2020 £m | | --- | --- | --- | | Deferred Bonus Plan (DBP) | 20.4 | 15.7 | | Long-term Incentive Plan (LTP) | 1.6 | 2.8 | | Deferred Earn Out (DEO) | 2.3 | 11 | | 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, LTP and SAYE schemes were determined using a Black-Scholes option-pricing method and the following assumptions: | | 2020 | | | 2020 | | | | --- | --- | --- | --- | --- | --- | --- | | | DBP 2020 | LTP 2020 | SAYE 2020 | DBP 2020 | LTP 2020 | SAYE 2020 | | Weighted average share price | £2.81 | £2.81 | £2.51 | £2.71 | £2.80 | £2.15 | | 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% | - | - | (0.5)% | - | 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 LTP 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-based assumptions | 2020 £m | 2020 (revised) £m | | --- | --- | --- | | +5% | (1.8) | (1.4) | | -5% | 1.2 | 1.2 | | | 2020 | 2020 | | Impact on the income statement of a change in performance condition vesting assumptions | £m | £m | | +25% | 1.9 | 3.1 | | -25% | (2.0) | (1.1) | 1. 2020 has been restated to split out the sensitivity analysis on share-based payments and fund awards. 140 Jupiter Fund Management plc | Annual Report & Accounts 2021 # 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 (WALP) of, and movement in, share options during the year: | Options outstanding | 2021 | | 2020 | | | --- | --- | --- | --- | --- | | | Number m | WALP £ | Number m | WALP £ | | 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 | WALP £ | Number m | WALP £ | | At 1 January | 8.3 | 0.12 | 8.7 | 0.15 | | 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 | 0.03 | 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. Jupiter Fund Management plc | Annual Report & Accounts 2021 141 FINANCIAL STATEMENTS Notes to the Group Financial Statements continued ### 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 | 2010 | | 2010 | | | --- | --- | --- | --- | --- | | | Number in | Weight | Number in | Weight | | 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 £165 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. | | 2020 £m | 2020 £m | | --- | --- | --- | | Dividend income | 11 | 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 | 142 Jupiter Fund Management plc | Annual Report & Accounts 2020 # 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 1F and 1J 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. | | 2020 £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. | | 2020 £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 | 45.7 | 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 1J) | (9.6) | (0.3) | | 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 | 2020 £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 | Jupiter Fund Management plc | Annual Report & Accounts 2021 143 ### FINANCIAL STATEMENTS Notes to the Group Financial Statements continued 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: | | | 2021 | 2020 | | --- | --- | --- | --- | | | Number | | Number | | Weighted average number of shares | | m | m | 1 Issued share capital 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). 2021 2020 Earnings per share p 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 2020 £m £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. 144 Jupiter Fund Management plc | Annual Report & Accounts 2021 ## 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 | (15.0) | (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)** | **(20.2)** | **(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 | Jupiter fund Management plc | Annual Report & Accounts 2021 145 FINANCIAL STATEMENTS Notes to the Group Financial Statements continued # 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. | | 2020 | | | | 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 | 2020 £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). 146 Jupiter Fund Management plc | Annual Report & Accounts 2021 # **(b) 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). # **(4) 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. Jupiter fund Management plc | Annual Report & Accounts 2021 147 FINANCIAL STATEMENTS Notes to the Group Financial Statements continued # 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 | - | - | (10.5) | (10.5) | | At 31 December 2021 | 10.6 | 17.0 | (10.5) | 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 | (10.5) | 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. 148 Jupiter Fund Management plc | Annual Report & Accounts 2021 ## 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: | | 2022 £m | 2021 £m | | --- | --- | --- | | **Financial assets** | | | | Financial assets at FVTPL | 303.5 | 217.4 | | Other financial assets at FVTPL | 1.0 | 3.7 | | | **303.5** | **261.1** | | | 2022 £m | 2021 £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: | | | | | 2022 £m | 2021 £m | | Direct seed investment at fair value | 142.1 | 118.5 | | Additional financial assets due to consolidation of funds | 44.3 | 74.0 | | Derivatives and fund unit hedges | 61.4 | 48.6 | | Fees receivable in shares | 55.5 | — | | **Total financial assets** | **303.5** | **261.1** | Jupiter Fund Management plc | Annual Report & Accounts 2023 149 FINANCIAL STATEMENTS Notes to the Group Financial Statements continued ### 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 reorganization. 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 (2020-6-6) (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 | 2020 £m | 2020 £m | | --- | --- | --- | | Deferred acquisition and commission costs | - | 0.1 | | Rent deposits | 0.5 | 0.4 | | | 0.5 | 0.5 | | | 2020 £m | 2020 £m | | Current | | | | 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 | | 2020 £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 35 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 Menan acquisition on 1 July 2020, the Group acquired £10.0m of bank loans. These loans were repaid in full on 1 July 2020. | | 2020 £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 50% (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 53% to 66% of the facility is drawn, and 0.1% per annum when more than 66% of the facility is drawn. 150 Jupiter Fund Management plc | Annual Report & Accounts 2021 ## 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. | | 2020 £m | 2019 £m | | --- | --- | --- | | Lease liabilities | 47.1 | 50.3 | | Accrued expenses | 41.9 | 29.8 | | Social security and other taxes | 15.2 | 6.8 | | Contract liabilities | 0.1 | 0.5 | | | **102.3** | **87.4** | | | 2020 £m | 2019 £m | | Current | | | | 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 | 2020 £m | 2019 £m | | --- | --- | --- | | < 1 year | 0.6 | 0.8 | | 1-5 years | 0.1 | 0.5 | | | **0.7** | **1.3** | Jupiter Fund Management plc | Annual Report & Accounts 2021 151 ### FINANCIAL STATEMENTS Notes to the Group Financial Statements continued 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. | | 2021 | 2020 | | | | --- | --- | --- | --- | --- | | | Shares | Shares | 2021 | 2020 | | Authorised, issued, allotted, called-up and fully paid | m | m | £m | £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 2020 2021 2020 m m £m £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 2020 £m £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)). 152 Jupiter Fund Management plc | Annual Report & Accounts 2021 22. Cash flows from operating activities 2021 2020 Notes £m £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 | | | | | | Financial | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | liabilities at | | Loans and | | | | liabilities at | | Loans and | | | | Total | | | FVTPL | | borrowings | | Leases | Total | FVTPL | | borrowings | | Leases | (restated) | | 1 | | | £m | | £m | £m | £m | | £m | | £m | £m | | £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 ### FINANCIAL STATEMENTS 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: | | | | | | Financial | | Financial | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Financial assets | | | assets held at | | | liabilities | | Other financial | | | Total financial | | Non–financial | | | | | | at FVTPL | | amortised cost | | | at FVTPL | | | liabilities | | instruments | | instruments | | Total | | 2021 | | | £m | | | £m | | £m | | | £m | | £m | | £m | £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 1 Non–current trade and other receivables – 0.5 – – 0.5 – 0.5 Financial assets at FVTPL 303.5 – – – 303.5 – 303.5 1 Current trade and other receivables - 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) 1 Non–current trade and other payables – – – (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) 1 Current trade and other payables – – – (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 | | | | | | Financial | | Financial | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Financial assets | | | assets held at | | | liabilities | | Other financial | | | Total financial | | Non–financial | | | | | | at FVTPL | | amortised cost | | | at FVTPL | | | liabilities | | instruments | | instruments | | Total | | 2020 | | | £m | | | £m | | £m | | | £m | | £m | | £m | £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 1 Non–current trade and other receivables – 0.4 – – 0.4 0.1 0.5 Financial assets at FVTPL 261.1 – – – 261.1 – 261.1 1 Current trade and other receivables – 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) 1 Non–current trade and other payables – – – (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) 1 Current trade and other payables – – – (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 | | | Other income | | | Financial assets | | | Other income | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | at FVTPL | 2 | and expense | | Total | | at FVTPL | 2 | and expense | | Total | | | | £m | | £m | £m | | | £m | | £m | £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 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: | | 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 | 53.5 | – | – | 53.5 | | 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: | | 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: £118.3m) 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 (£10m (2020: £nd)) and financial liabilities at FVTPL (£nd (2020: £0.2m)). Jupiter Fund Management plc | Annual Report & Accounts 2021 155 FINANCIAL STATEMENTS Notes to the Group Financial Statements continued ### 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: £108.3m). 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 | 2020 £m | 2020 £m | | --- | --- | --- | | +10% | 13 | 4.5 | | -10% | (13) | (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 | 2020 | | 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) | 11 | (1.1) | 1.1 | | 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 | (1.8) | 1.0 | The sensitivity analysis takes account of the relevant derivative transactions the Group has entered into to hedge against such exposures. 156 Jupiter Fund Management plc | Annual Report & Accounts 2021 ## 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 | 2020 £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: £m)), 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: | | 2020 £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: £m). The table below contains an analysis of financial assets held by the Group for which credit ratings are available: | | 2020 | | | | 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 | 15.8 | — | — | 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 | | Net 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** | Jupiter Fund Management plc | Annual Report & Accounts 2021 157 ### FINANCIAL STATEMENTS Notes to the Group Financial Statements continued 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: | | | | | 2021 2020 (restated) | | | | | | | | 2 | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Within 1 year | | | | | | | Within 1 year | | | | | | | | | | or repayable | | | | | | | or repayable | | | | | | | | | | on demand | | 1-5 years | | > 5 years | | Total | on demand | | 1-5 years | | | > 5 years | | Total | | Financial liabilities | | £m | | £m | | £m | £m | | £m | | £m | | | £m | £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 2020 £m £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. 158 Jupiter Fund Management plc | Annual Report & Accounts 2021 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: Investment Financial management/ Management/ Net AUM assets performance performance Number of funds at FVTPL fees in the year fees receivable of funds £bn £m £m £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: Financial assets Investment Percentage Date of the end Country of Principal at FVTPL in associates of total Share class held of the fund’s Name Category incorporation activities £m £m AUM held by the Group reporting period Jupiter European Smaller Companies Subsidiary England & Wales Unit Trust 30.3 – 30% I Acc GBP 31-Aug | Jupiter Global Fund SICAV: Europe | Subsidiary Luxembourg SICAV | | 22.0 – 66% L EUR Acc and | | 30-Sep | | --- | --- | --- | --- | --- | --- | | ex-UK Equity | | sub-fund | | I GBP Acc | | | Jupiter Global Fund SICAV: Flexible | Subsidiary Luxembourg SICAV | | 64.6 – 81% I EUR Acc | | 30-Sep | | Income | | sub-fund | | 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 Jupiter Global Fund SICAV: Flexible Subsidiary Luxembourg SICAV 12.2 – 83% F EUR Acc 30-Sep Macro sub-fund D EUR Q Inc Dis L EUR Acc I EUR Acc D EUR Acc D GBP Acc HSC and D USD Acc HSC Jupiter Global Fund SICAV: Global Subsidiary Luxembourg SICAV 19.1 – 77% F EUR Acc 30-Sep High Yield Short Duration Bond sub-fund D EUR Q Inc Dis L EUR Acc I EUR Acc D EUR Acc D HSC Acc USD and I GBP Acc HSC Jupiter Global Fund SICAV: Global Subsidiary Luxembourg SICAV 11.1 – 86% A USD Acc 30-Sep Sustainable Equities sub-fund 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 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 ### FINANCIAL STATEMENTS Notes to the Group Financial Statements continued 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: | | | | | | | Financial | | Percentage of | Percentage of | | Date of the end | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Share class held by the | | | | Principal | assets at | | share class held | total shares | | of the fund’s | | Name | | | Group Country of incorporation | | activities | FVTPL £m | | by the Group | | held | reporting period | | Jupiter Asset Management Series Plc: Europe (ex UK) | | U2 GBP Acc Ireland ICVC | | | | | 0.1 100% 0% 31-Dec | | | | | | Smaller Companies Fund | | | | sub-fund | | | | | | | | | Jupiter Asset Management Series Plc: Gold & Silver | | N USD Acc Ireland ICVC | | | | | – 100% 0% 31-Dec | | | | | | Fund | | | | sub-fund | | | | | | | | | Jupiter Asset Management Series Plc: Jupiter Emerging | | U2 GBP Acc Ireland ICVC | | | | | – 100% 0% 31-Dec | | | | | | Market Debt Income Fund | | | | sub-fund | | | | | | | | | Jupiter Asset Management Series Plc: Merian Global | | L EUR Acc Ireland ICVC | | | | | – 100% 0% 31-Dec | | | | | | Dynamic Bond | | | | sub-fund | | | | | | | | | Jupiter Asset Management Series Plc: North American | | U2 GBP Acc Ireland ICVC | | | | | 0.6 90% 0% 31-Dec | | | | | | Equity Fund (IRL) | | | | sub-fund | | | | | | | | | Jupiter Asset Management Series Plc: Strategic | L SEK Acc HSC Ireland ICVC | | | | | | – 82% 0% 31-Dec | | | | | | Absolute Return Bond | | | | sub-fund | | | | | | | | | Jupiter Asset Management Series Plc: UK Specialist | | X GBP Acc Ireland ICVC | | | | | 3.2 46% 0% 31-Dec | | | | | | Equity Fund | | | | sub-fund | | | | | | | | | Jupiter Global Fund SICAV: Asia Pacific Income A USD Acc Luxembourg SICAV | | | | | | | – 100% 13% 30-Sep | | | | | sub-fund Jupiter Global Fund SICAV: Asia Pacific Income C USD Acc Luxembourg SICAV 0.1 100% 13% 30-Sep sub-fund Jupiter Global Fund SICAV: Asia Pacific Income L EUR Q Inc Luxembourg SICAV 0.3 88% 13% 30-Sep sub-fund | Jupiter Global Fund SICAV: Asia Pacific Income L SGD Q Inc | | Luxembourg SICAV | | 0.7 100% 13% 30-Sep | | --- | --- | --- | --- | --- | | | Dist HSC | | sub-fund | | | Jupiter Global Fund SICAV: Asia Pacific Income N USD Acc Luxembourg SICAV | | | | – 100% 13% 30-Sep | sub-fund Jupiter Global Fund SICAV: Dynamic Bond L JPY Hsc Acc Luxembourg SICAV – 100% 0% 30-Sep sub-fund Jupiter Global Fund SICAV: Dynamic Bond N USD Acc Luxembourg SICAV – 100% 0% 30-Sep sub-fund Jupiter Global Fund SICAV: European Growth C USD HSC Acc Luxembourg SICAV 0.1 78% 0% 30-Sep sub-fund Jupiter Global Fund SICAV: European Growth E USD Acc Luxembourg SICAV – 100% 0% 30-Sep sub-fund Jupiter Global Fund SICAV: European Growth FIA IE Brazil SICAV 1.2 36% 0% 30-Sep sub-fund Jupiter Global Fund SICAV: European Growth L HKD HSC Acc Luxembourg SICAV 0.1 68% 0% 30-Sep sub-fund Jupiter Global Fund SICAV: European Growth N USD Acc Luxembourg SICAV – 100% 0% 30-Sep sub-fund Jupiter Global Fund SICAV: European Growth USD FC FIA IE Brazil SICAV 1.2 69% 0% 30-Sep sub-fund Jupiter Global Fund SICAV: Financial Innovation A USD Acc HSC Luxembourg SICAV 0.1 100% 0% 30-Sep sub-fund Jupiter Global Fund SICAV: Financial Innovation D USD Acc HSC Luxembourg SICAV 0.1 100% 0% 30-Sep sub-fund Jupiter Global Fund SICAV: Financial Innovation N USD Acc Luxembourg SICAV – 100% 0% 30-Sep sub-fund Jupiter Global Fund SICAV: Financial Innovation N USD Acc HSC Luxembourg SICAV 0.1 100% 0% 30-Sep sub-fund Jupiter Global Fund SICAV: Global Convertibles A USD Acc HSC Luxembourg SICAV – 100% 0% 30-Sep sub-fund Jupiter Global Fund SICAV: Global Convertibles C USD Acc HSC Luxembourg SICAV 0.1 100% 0% 30-Sep sub-fund Jupiter Global Fund SICAV: Global Convertibles N USD Acc HSC Luxembourg SICAV – 70% 0% 30-Sep sub-fund Jupiter Global Fund SICAV: Global Ecology Growth D EUR Acc Luxembourg SICAV – 100% 0% 30-Sep sub-fund Jupiter Global Fund SICAV: Global Emerging Markets A USD Q INC Luxembourg SICAV – 100% 0% 30-Sep Corporate Bond sub-fund 160 Jupiter Fund Management plc | Annual Report & Accounts 2021 Related undertakings other than subsidiaries and associates continued | | | | | | | | | Financial | | Percentage of | Percentage of | | Date of the end | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | Share class held by the | | | | | | Principal | assets at | | share class held | total shares | | of the fund’s | | Name | | | | Group Country of incorporation | | | activities | FVTPL £m | | by the Group | | held | reporting period | | Jupiter Global Fund SICAV: Global Emerging Markets | | D GBP A INC | | | Luxembourg SICAV | | | | – 100% 0% 30-Sep | | | | | | Corporate Bond | | | | HSC | | sub-fund | | | | | | | | | Jupiter Global Fund SICAV: Global Emerging Markets | I CHF Acc HSC Luxembourg SICAV | | | | | | | | 0.1 100% 0% 30-Sep | | | | | | Corporate Bond | | | | | | sub-fund | | | | | | | | | Jupiter Global Fund SICAV: Global Emerging Markets | L EUR Acc HSC Luxembourg SICAV | | | | | | | | – 100% 0% 30-Sep | | | | | | Corporate Bond | | | | | | sub-fund | | | | | | | | | Jupiter Global Fund SICAV: Global Emerging Markets | | C USD Acc Luxembourg SICAV | | | | | | | – 100% 0% 30-Sep | | | | | | Short Duration Bond | | | | | | sub-fund | | | | | | | | | Jupiter Global Fund SICAV: Global Emerging Markets | | I USD A Inc Luxembourg SICAV | | | | | | | – 100% 0% 30-Sep | | | | | | Short Duration Bond | | | | | | sub-fund | | | | | | | | | Jupiter Global Fund SICAV: Global Equity Growth | D EUR Hedged | | | | Luxembourg SICAV | | | | – 100% 0% 30-Sep | | | | | | Unconstrained | | | Acc HSC | | | sub-fund | | | | | | | | | Jupiter Global Fund SICAV: Global Equity Growth | | | G EUR Acc Luxembourg SICAV | | | | | | – 100% 0% 30-Sep | | | | | | Unconstrained | | | | | | sub-fund | | | | | | | | | Jupiter Global Fund SICAV: Global Equity Growth | | N USD Acc Luxembourg SICAV | | | | | | | – 100% 0% 30-Sep | | | | | | Unconstrained | | | | | | sub-fund | | | | | | | | | Jupiter Global Fund SICAV: Japan Select A USD Acc Luxembourg SICAV | | | | | | | | | – 100% 0% 30-Sep | | | | | sub-fund | Jupiter Global Fund SICAV: Jupiter Global Sovereign | | A USD Acc Luxembourg SICAV | | – 100% 0% 30-Sep | | --- | --- | --- | --- | --- | | Opportunities | | | sub-fund | | | Jupiter Global Fund SICAV: Jupiter Global Sovereign | D EUR Acc HSC Luxembourg SICAV | | | – 100% 0% 30-Sep | | Opportunities | | | sub-fund | | | Jupiter Global Fund SICAV: Jupiter Global Sovereign | | D USD Acc Luxembourg SICAV | | – 100% 0% 30-Sep | | Opportunities | | | sub-fund | | | Jupiter Global Fund SICAV: Jupiter Global Sovereign | I EUR Acc HSC Luxembourg SICAV | | | – 100% 0% 30-Sep | | Opportunities | | | sub-fund | | | Jupiter Global Fund SICAV: Jupiter Global Sovereign | I GBP Acc HSC Luxembourg SICAV | | | 0.1 51% 0% 30-Sep | | Opportunities | | | sub-fund | | | Jupiter Global Fund SICAV: Jupiter Global Sovereign | | L USD Acc Luxembourg SICAV | | – 100% 0% 30-Sep | | Opportunities | | | sub-fund | | | Jupiter Global Fund SICAV: Jupiter Global Sovereign | | N USD Acc Luxembourg SICAV | | – 100% 0% 30-Sep | | Opportunities | | | sub-fund | | | Jupiter Global Fund SICAV: Pan European Smaller | A USD Acc HSC Luxembourg SICAV | | | – 55% 0% 30-Sep | | Companies | | | sub-fund | | | Jupiter Global Fund SICAV: Pan European Smaller | C USD Acc HSC Luxembourg SICAV | | | – 100% 0% 30-Sep | | Companies | | | sub-fund | | | Jupiter Global Fund SICAV: Pan European Smaller | D GBP Acc HSC Luxembourg SICAV | | | 0.1 81% 0% 30-Sep | | Companies | | | sub-fund | | | Jupiter Global Fund SICAV: Pan European Smaller | L USD Acc HSC Luxembourg SICAV | | | – 100% 0% 30-Sep | | Companies | | | sub-fund | | | Jupiter Global Fund SICAV: Pan European Smaller | N USD Acc HSC Luxembourg SICAV | | | – 100% 0% 30-Sep | | Companies | | | sub-fund | | Jupiter Global Sustainable Equities T Inc England & Wales Unit Trust 9.1 93% 4% 30-Apr | Jupiter Investment Funds Series II: Global Strategic | U2 GBP Inc England & Wales OEIC | | – 100% 0% 31-Oct | | --- | --- | --- | --- | | Bond Fund | | sub-fund | | | Jupiter Investment Management Series I: Monthly | U2 GBP Inc England & Wales OEIC | | – 99% 0% 31-Jul | | Income Bond Fund | | sub-fund | | | Jupiter Investment Management Series I: UK Equity | U2 GBP Acc England & Wales OEIC | | 0.1 67% 0% 31-Jul | | Income Fund | | sub-fund | | 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 FINANCIAL STATEMENTS Notes to the Group Financial Statements continued ### 26. Related parties The Group manages a number of investment trusts, unit trusts, OEICs, SICAVs, ICVCs, an ICAV (closed in 2020), 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: 10) 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, £119.3m (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 £10.0m (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: | | 2020 £m | 2020 £m | | --- | --- | --- | | Short-term employee benefits | 5.5 | 3.6 | | 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 | 162 Jupiter Fund Management plc | Annual Report & Accounts 2021 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 ### FINANCIAL STATEMENTS 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 # COMPANY BALANCE SHEET at 31 December 2021 | | Notes | 2021 £m | 2020 (retained) £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 | 103.8 | | 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 | 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 Jupiter Fund Management plc | Annual Report & Accounts 2021 165 ### FINANCIAL STATEMENTS ## COMPANY STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2021 | | | Own share | | Other reserves | | | Retained | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Share capital | | reserve | | | (restated) | 1 | earnings | | Total | | | £m | | £m | | | £m | | £m | £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 1 of transactions costs and tax (restated) 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. ## COMPANY STATEMENT OF CASH FLOWS for the year ended 31 December 2021 2021 2020 Notes £m £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 0.5 166 Jupiter Fund Management plc | Annual Report & Accounts 2021 # 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: £65.4m). ### 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 | | 2020 £m | 2020 % | | --- | --- | --- | | **At 1 January** | **515.6** | **240.0** | | Acquisition of subsidiary | — | 235.8 | | Share-based payments | 35.5 | 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. | Title | Registered office | Principal activities | | --- | --- | --- | | Jupiter Asset Management (Asia Pacific) Limited | 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^{1} | 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 Heienhoff, Senningerberg, L-1056, Luxembourg | SICAV management | | Jupiter Asset Management Limited | 70 Victoria Street, London, UK | Investment management | | Jupiter Asset Management (N America) Inc | 5109 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, #8, Dover, Delaware, USA | Investment management | | Jupiter Fund Management Group Limited | 70 Victoria Street, London, UK | Investment holding company | | Jupiter Fund Managers Limited^{1} | 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, #8, Dover, Delaware, USA | Investment holding company | Jupiter Fund Management plc | Annual Report & Accounts 2021 167 ### FINANCIAL STATEMENTS Notes to the Company Financial Statements continued 30. Related undertakings continued Name Registered office Principal activities 4 Jupiter Investment Management Limited 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) 50 Raffles Place, #27-01 Singapore Land Tower, Investment management PTE Limited Singapore 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: Percentage of AUM indirectly held by Name Registered office Principal activities the Company Jupiter European Smaller Companies Fund 70 Victoria Street, London, UK Unit trust 30% 1 Jupiter Global Fund SICAV: Europe ex UK Equity 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 6 Route de Trèves, Senningerberg, Luxembourg SICAV sub-fund 77% 2 Yield Bond Jupiter Global Fund SICAV: Global Sustainable 6 Route de Trèves, Senningerberg, Luxembourg SICAV sub-fund 86% Equities 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 53 Merrion Square, South Dublin, Ireland ICVC sub-fund UK) Smaller Companies Fund Jupiter Asset Management Series Plc: Gold & Silver 53 Merrion Square, South Dublin, Ireland ICVC sub-fund Fund Jupiter Asset Management Series Plc: Jupiter 53 Merrion Square, South Dublin, Ireland ICVC sub-fund Emerging Market Debt Income Fund Jupiter Asset Management Series Plc: Merian Global 53 Merrion Square, South Dublin, Ireland ICVC sub-fund Dynamic Bond Jupiter Asset Management Series Plc: North 53 Merrion Square, South Dublin, Ireland ICVC sub-fund American Equity Fund (IRL) Jupiter Asset Management Series Plc: Strategic 53 Merrion Square, South Dublin, Ireland ICVC sub-fund Absolute Return Bond Jupiter Asset Management Series Plc: UK Specialist 53 Merrion Square, South Dublin, Ireland ICVC sub-fund Equity 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 6 Route de Trèves, Senningerberg, Luxembourg SICAV sub-fund Markets Corporate Bond 168 Jupiter Fund Management plc | Annual Report & Accounts 2021 # Notes to the Company Financial Statements *continued* | Notes | 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 Arbes 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. | | 2020 £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: £mil). | | 2020 £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** | **105.0** | # **33. Cash and cash equivalents** | | 2020 £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** | | 2020 £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** | Jupiter Fund Management plc | Annual Report & Accounts 2021 169 ### FINANCIAL STATEMENTS Notes to the Company Financial Statements continued 35. Trade and other payables 2021 2020 £m £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: Financial assets | | | Financial | | held at fair | | Financial liabilities | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | assets held at | | | value through | | held at amortised | | Total financial | | Non-financial | | | | | amortised cost | | | profit or loss | | | cost | instruments | | instruments | | Total | | 2021 | | | £m | | £m | | £m | | £m | | £m | £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 | | | Financial | | Financial assets | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | assets held at | | | | held at fair | Financial liabilities | | Total financial | | Non-financial | | | | | amortised cost | | | value through | | held at amortised | | instruments | | instruments | | Total | | 2020 | | | £m | profit or loss | | | cost | | £m | | £m | £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: Level 1 Level 2 Level 3 Total 2021 £m £m £m £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: Level 1 Level 2 Level 3 Total 2020 £m £m £m £m Financial assets at FVTPL – derivatives – 3.7 – 3.7 170 Jupiter Fund Management plc | Annual Report & Accounts 2021 Notes to the Company Financial Statements continued # 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 | 2020 £m | 2019 £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: | | 2020 £m | 2019 £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 | Jupiter Fund Management plc | Annual Report & Accounts 2021 171 ### FINANCIAL STATEMENTS ## INDEPENDENT AUDITORS’ REPORT ## TO THE MEMBERS OF JUPITER ## FUND MANAGEMENT PLC 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) 172 Jupiter Fund Management plc | Annual Report & Accounts 2021 # 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 Idelian 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 £510.0m. 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 £110.0m. 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. Jupiter Fund Management plc | Annual Report & Accounts 2021 173 ### FINANCIAL STATEMENTS 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 We understood and evaluated the design and implementation of key payment and Note 27. Basis of preparation and other accounting policies. controls in place around share-based payments. There are a number of share-based and fund unit award arrangements in In testing the share-based payment and fund unit award employee benefits place for which the recognition involves the interpretation of complex expense, we performed the following substantive procedures where terms, increasing the complexity of the accounting for each scheme. relevant to each arrangement. These arrangements remunerate employees for their services by granting • Reconciled a sample of new tranches of existing awards granted in the the right to either shares, options over shares, or fund units, subject to year to the signed Deeds of Grant, ensuring they were appropriately certain vesting conditions and exercise prices. authorised, approved and consistent with scheme plans. • For a sample of new tranches of existing awards granted in the year Options and share awards are accounted for as equity-settled share-based (options and fund units) we independently recalculated the fair value. payments whereas fund units are accounted for as cash-settled. Equity- settled awards are fair valued on the date of grant, recognised within • Tested the classification of awards as equity or cash-settled; equity and not subsequently adjusted. Cash-settled award fair values are • Assessed the reasonableness of the key assumptions, leaver rate and remeasured at each reporting date and on settlement and recognised as a expected outcome of performance conditions, by examining historical liability. For equity-settled awards the conditions are such that the fair data and performing sensitivity analyses; value calculated on grant equals the share price. For cash-settled awards • Tested forfeitures and lapses by agreeing samples back to source the conditions are such that at each measurement date the fair value documentation and ensuring the expense recognised had been trued up equals the value of the funds. appropriately, particularly in relation to good leavers and the acceleration of the expense; The share-based payments expense calculation involves a number of manual elements and is judgemental in nature, involving estimation of both • Tested a sample of options exercised during the year to check they were the expected future outcome of the performance conditions where exercised in accordance with the terms of the grant; applicable and the level of attrition in future years. For all awards, actual • For cash-settled and equity-settled awards, tested a sample of current leavers are adjusted either by reversing the expense recognised that relates year charges. For cash-settled, this is based on the year-end price of to them (bad leavers) or by accelerating the future expense still to be underlying funds and results in re-measurement of the liability. For recognised into the current year (good leavers). equity-settled, this is based on fair value at grant date; and • Agreed the share-based payment disclosures made in the financial The group financial statements provide sensitivity disclosures which statements back to supporting documentation. demonstrate the impact changes in assumptions may have on the income statement expense. No material issues were identified. Impairment of goodwill (group) Refer to the Audit and Risk Committee report, Note 10. Goodwill and Note We obtained management’s impairment review and performed the 27. Basis of preparation and other accounting policies. following substantive procedures. Goodwill of £570.6m is the most significant balance in the group’s balance • We evaluated management’s discounted cash flow model, checking the sheet. relevant inputs to supporting documentation and challenging management on key assumptions within the calculations. Our challenge Management is required by IAS 36 ‘Impairment of assets’ to perform an included assessing whether management had incorporated climate annual impairment review and consider if there are any impairment change considerations within their model; indicators in respect of the carrying value of goodwill. Management has • We evaluated management’s assessment that only one cash generating performed their annual impairment review which demonstrated that no unit exists and concluded it was appropriate; impairment was required. • We challenged management’s sensitivity analysis by performing our own The impairment review used a discounted cash flow model to calculate the sensitivity analysis; net present value of the group’s future earnings. The model involved a • We assessed the accuracy of management’s historic forecasts against number of estimates and assumptions made by management including actual financial results to assess the reasonableness of estimates used in those related to long-term growth rates and costs of capital. the forecast; Management has applied judgment in determining the cash generating unit • We considered publicly available information on the asset management levels within its business for the purpose of impairment testing of goodwill. industry and considered whether there were any views contrary to those Management has concluded that the group is one cash generating unit, of management; investment 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 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. We obtained management’s current and deferred tax computations and Basis of preparation and other accounting policies. workings, performing the following testing. The calculation of the current and deferred tax is produced manually and is • We checked the mathematical accuracy of management’s computations; based on a number of supporting complex calculations including share- • We agreed the inputs used in the computations to supporting based payments and deferred bonuses. documentation; The current income tax charge is calculated on the basis of the tax laws • We evaluated whether the temporary difference will reverse in the enacted or substantively enacted at the balance sheet date in the countries future and challenged management on the assumptions made in relation where the group operates and generates taxable items. Management to the deferred tax asset recognised; periodically evaluates positions taken in tax returns with respect to • We confirmed management had appropriately reflected the changes in situations in which applicable tax regulation is subject to interpretation. UK corporation tax in their deferred tax calculations; • Agreed the current and deferred tax disclosures made in the financial Deferred tax is recognised on temporary differences arising between the statements back to supporting documentation; and tax bases of assets and liabilities and their carrying amounts in the financial statements. A deferred tax asset has been recognised by management • We obtained and evaluated transfer pricing arrangements in place across which it is considered recoverable. 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 FINANCIAL STATEMENTS # **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 2020 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 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 ### FINANCIAL STATEMENTS 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 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 OTHER INFORMATION # HISTORICAL SUMMARY (UNAUDITED) for the year ended 31 December 2021 | | 2020 £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** | **190.3** | **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) | (56.2) | (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 | 180 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## THE USE OF ALTERNATIVE PERFORMANCE ## MEASURES IN THIS ANNUAL REPORT 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 38% 39% Operating profit (before exceptional items and performance fees 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 33% 35% Fixed staff costs before exceptional items plus performance fees 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 24.1p 22.9p Underlying profit after tax before net performance performance fees fees divided by average issued share capital Jupiter Fund Management plc | Annual Report and Accounts 2021 181 OTHER INFORMATION Reconciliations: table 1 | | 2018 | 2019 | 2020 | | --- | --- | --- | --- | | 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) | | 39.7 | 47.8 | | Net management fee margin | 1 | 76 bps | 79 bps | | Operating profit (page 153) | | 190.5 | 157.7 | | Exceptional items (page 24) | | 33.0 | 46.4 | | Operating profit (before exceptional items) | | 223.5 | 184.1 | | Net revenue (page 153) | | 568.6 | 457.8 | | Less: Performance fees classified as exceptional items (page 137) | | | (81.0) | | 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 | | 153.1 | 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 152) | | 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 10% | | (41.2) | (34.0) | | Underlying profit after tax | | 175.5 | 145.0 | | Average issued share capital (m) (page 144) | | 533.1 | 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. 182 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 1 Variable staff costs before exceptional items 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. Jupiter Fund Management plc | Annual Report and Accounts 2021 183 OTHER INFORMATION # 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** Ex-dividend date for final dividend Record date for final dividend Trading update Annual General Meeting Payment date for final dividend Interim results announcement Trading update | **Date** 21 April 2022 22 April 2022 26 April 2022 11 May 2022 20 May 2022 29 July 2022 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 3857 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 GB00B53F2009 SEDOL B53F200 TICKER JUPLN | | | **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. | | 184 Jupiter Fund Management plc | Annual Report and Accounts 2021 ## GLOSSARY OF TERMS | A | C (continued) | I | | --- | --- | --- | | Act | CSR | IAS | | Companies Act 2006 (as amended, supplemented | Corporate Social Responsibility | International Accounting Standard(s) | or replaced from time to time) D ICAAP AGM Internal Capital Adequacy Assessment Process D&I Annual General Meeting Diversity and Inclusion ICARA AIFM Internal Capital Adequacy and Risk Assessment DBP Alternative Investment Fund Manager Deferred Bonus Plan ICAV AML Irish Collective Asset-management Vehicle DBP Anti-money laundering Deferred Earn Out ICVC APM Investment Company with Variable Capital E Alternative Performance Measures as defined on pages 181-183 IFRS EBT International Financial Reporting Standard(s) The Jupiter employee benefit trust established AUM pursuant to a trust deed dated 22 April 2004 Assets under management IFRS IC EPS IFRS Interpretations Committee B Earnings per share IIGCC Board ESG Institutional Investors Group on Climate Change The Board of Directors of the Company Environmental, social and governance ISA Bps EU International Share Award One one-hundredth of a percentage point (0.01%) The European Union J BREEAM F Building Research Establishment Environmental Jupiter Assessment Method is the world’s longest FCA The Company and all of its subsidiaries established method of assessing, rating, and Financial Conduct Authority of the United certifying the sustainability of buildings K Kingdom KPI Brexit FRC Key performance indicator The withdrawal of the United Kingdom from Financial Reporting Council membership of the European Union L FSA C Free Share Award Listing CASS The Company’s Listing on the London Stock FVTPL Exchange on 21 June 2010 The FCA’s Client Asset Sourcebook rules Fair value through profit or loss Listing Rules CDP G Regulations subject to the oversight of the FCA Formerly the Carbon Disclosure Project applicable to the Company following Listing GHG CGU Greenhouse gas LGBTQ+ Cash-generating unit Lesbian, gay, bisexual, transgender and other Good Work Initiative Code sexual or gender identities A ShareAction-led coalition that brings together UK Corporate Governance Code adopted by the institutional investors to collaboratively engage LTIP Financial Reporting Council in 2018 on workforce issues, including the Living Wage, Long-term Incentive Plan for retention diversity and inclusion and insecure working Company practices Jupiter Fund Management plc Group CREST The Company and all of its subsidiaries The system for paperless settlement of trades in listed securities, of which Euroclear UK & Ireland Limited is the operator Jupiter Fund Management plc | Annual Report and Accounts 2021 185 ### OTHER INFORMATION M S T Merian SAYE TCFD Merian Global Investors Limited and its subsidiary Save As You Earn The Financial Stability Board Task Force on undertakings Climate-related Financial Disclosures (TCFD) is a SEDOL market-driven initiative to help investors Mutual funds understand their financial exposure to climate risk Stock Exchange Daily Official List Collective investments where a group of and help companies disclose this information in a investors pool their money (buying units Segregated mandates clear and consistent way or a portion of the mutual fund) An investment strategy run exclusively U for certain institutional clients N UCITS SFDR NZAM Undertaking for Collective Investment in Sustainable Finance Disclosure Regulation Net Zero Asset Management Transferable Securities as defined by EC Council Directive 85/611/EEC, as amended SICAV NZIF Société d’Investissement à Capital Variable; an UNGC Net Zero Investment Framework open-ended collective investment scheme United Nations Global Compact. A UN-led pact offered in Europe O to encourage businesses worldwide to adopt sustainable and socially responsible policies, and SIP OEIC to report on their implementation. It is the Share Incentive Plan Open Ended Investment Company world’s largest corporate sustainability initiative and is based on ten principles in the areas of SMCR Ordinary dividends per share human rights, labour, the environment and Senior Managers and Certification Regime; Interim and final/full-year dividends (does not anti-corruption an FCA regime governing the regulation of senior include any special dividends) employees of entities operating in W P the financial services sector in the UK WAEP PBT SONIA Weighted average exercise price Profit before tax Sterling Overnight Index Average WDI Platforms Workforce Disclosure Initiative 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 186 Jupiter Fund Management plc | Annual Report and Accounts 2021 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 www.blacksunplc.com Registered address: The Zig Zag Building 70 Victoria Street London SW1E 6SQ www.jupiteram.com