The announcement that Ben Whitmore was departing Jupiter in January sent more of a ripple effect through the investment industry than perhaps many would have anticipated at the time.
For instance, who knew that both his main fund, Jupiter Special Situations, and the fund from which Jupiter sourced his replacement, JOHCM UK Dynamic, would experience more than £900mn of outflows each since the turn of the year, according to data from Morningstar.
Ouch.
Investors have withdrawn en-masse from both mandates. Jupiter Special Sits has shrunk by 40 per cent to £1.2bn while Alex Savvides’s former fund stands at just £380mn now, down 65 per cent since the beginning of 2024.
We have been speaking to a number of DFMs over the past few months as they mull their next move, and many have made their final decision on those funds as Savvides’s start date at Jupiter – scheduled for October 7 – draws ever-closer.
The team at Hawksmoor informed us they’ve called time on JOHCM UK Dynamic.
“It’s not always the case where a manager leaving results in a sale of the fund but given the fact that the competition for capital in this space is already high as it is, it made sense for us to do so,” said Kishan Raja, investment manager at Hawksmoor.
“Even though the fund will be managed by lead manager Mark Costar, we believe the style of UK Dynamic will change and dilute the diversification benefits that we had originally owned the fund for.”
Over at Quilter, meanwhile, they’ve opted to cut exposure to the mandate rather than a complete sale.
Cirilium portfolio manager CJ Cowan insisted he remained happy with the new team’s approach and that performance has been good in recent months, but they’ve decided to cut UK equities across the board.
“We recently introduced a new strategic asset allocation which has a slightly lower weighting in UK equities,” he said. "Meanwhile we also wanted to reduce the portfolios’ small- and mid-cap UK tilt and instead allocate more to large caps. We view JO Hambro as having a mid-cap tilt, so we trimmed our position for both of those reasons.”
The result is that JOHCM UK Dynamic is now held by four allocators in our database. At the start of this year it was held by seven and was one of the more popular UK equity funds in our database.
But to quote the Bard: "All are punished". At the start of 2024 Jupiter Special Situations was owned by six allocators and is now owned by three. If the aim of this game of fund manager musical chairs was to grow either of these funds then, in the short term at least, it has failed.
Nick Train runs the UK equity fund which is now undisputed as the most popular in our database having picked up one new follower since January. He has had his own issues relating to performance of late but the stability his fund offers in terms of management and overarching philosophy at the moment obviously goes a long way.
Should I stay or should I go?
Not long ago we covered the importance of succession planning in the asset management industry and how the nature of the departure can affect a fund’s fate into the future.
AJ Bell’s head of investment research Paul Angell pointed out that when the departing manager is both the architect of the investment process and the head of the investment team, sticking around becomes more difficult.
He said this is because there’s no guarantee the management approach and investment decisions will continue under the new management, especially as Jupiter brought in somebody from outside the firm.
Allocators in general have certainly taken their time with this one – the six-month gardening leave period allowing for plenty of time to make a final call.
