Jupiter weighs dumping £1bn of its own funds when star manager departs

UK asset manager Jupiter is considering dumping £1bn of holdings in its own funds as one of its star managers prepares to leave the company.

David Lewis, a manager of Jupiter’s Merlin range, which invests in other funds, said during an investor roadshow this week that the firm was considering pulling the money from Ben Whitmore’s mandates when he leaves Jupiter later this year, according to people familiar with the situation.

The Merlin range has nearly a fifth of its equity assets — or £1bn — in two funds managed by Whitmore: the £2bn Jupiter UK Special Situations fund, and the £930mn Jupiter Global Value Equity fund. The Merlin team receives a discount on fees for investing in-house, people familiar with the arrangement told the Financial Times.

The Merlin team are discussing all potential options for the portfolio, which would be either staying with Jupiter’s funds, following Whitmore to his new company or looking elsewhere entirely.

Kiran Nandra, head of equities at Jupiter, said: “As our independent funds team, Merlin will of course make any investment decision in the best interests of clients. This has been a hallmark of their very successful investment process since inception, combining Jupiter funds with non-Jupiter funds.”

The firm declined to comment specifically on whether it will pull £1bn from its funds.

Jupiter announced Whitmore’s departure from the firm earlier this year. He is leaving to set up his own firm. Whitmore will stay with the company until at least July, and will be replaced on the UK Special Situations fund by Alex Savvides from JO Hambro Capital Management. Adrian Gosden and Chris Morrison are joining from GAM to run the £1.5bn Jupiter Income Trust, which is also part of Whitmore’s portfolio. 

Nandra said: “In Adrian Gosden and Alex Savvides, we have attracted two proven investment managers to the Jupiter platform to ensure a smooth succession plan for our clients, which naturally includes the Merlin team.”

Jupiter’s chief executive officer Matthew Beesley, who joined the firm in January 2022, has embarked on a cost-cutting programme and revamp of the group’s funds as well as an expansion in overseas markets to try to revive the company, which has suffered a declining share price and outflows from its funds. Investors pulled £2.2bn in 2023 after sentiment among retail investors soured in the fourth quarter, and its shares have dropped 40 per cent in the past 12 months. 

In the company’s 2023 annual report, Beesley said the year had been a “challenging environment” for active asset managers, saying clients had showed caution throughout the year and in many cases had shunned risk assets for higher-yielding cash products.

Jupiter has lost a number of fund managers in the past year, including Richard Buxton who handed over the reins of the UK equities fund he managed after a near 40-year career in asset management.

In November, the split was announced between Jupiter and the investment company Chrysalis and its managers, three years after the trust was brought under Jupiter’s control after its acquisition of Merian in 2020.