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Jupiter will retain a near £500mn in funds run by its star stockpicker Ben Whitmore who is leaving later this year, in a boost to the FTSE 250 asset manager which is facing a wave of customer withdrawals.
Jupiter’s Merlin range, which operates its strategy at arm’s length from the group, has decided to keep the money invested in Jupiter Global Value when Whitmore departs at the end of July, the asset manager has confirmed.
“The Jupiter Merlin team retains its full investment of £480mn in the Jupiter Global Value . . . under new lead portfolio manager Brian McCormick,” the asset manager said.
The decision by the Merlin fund managers, described as a “fund of funds” team that invests in the group’s own funds as well as those of rivals, will come as a relief to Jupiter. The decision comes as investors withdrew a net £1.6bn in the first three months of the year, nearly 80 per cent more than the outflows suffered a year ago. Jupiter manages a total of £52.6bn.
David Lewis, a manager of the Merlin range, said during an investor roadshow in March that he was considering withdrawing the money managed by Whitmore, totalling more than £1bn, when he leaves Jupiter.
The Merlin team had discussed either keeping the money in Jupiter’s own funds, or following Whitmore to his new company, Brickwood, which is still being established. Jupiter could have also placed the money with other external funds run by rival asset management companies.
While the team will keep just under half of the amount it has invested through Whitmore in Global Value, it is still unclear where the remainder will be invested.
Merlin’s decision will provide some reprieve as Jupiter has suffered outflows from its funds — along with other midsized asset managers — following a string of star manager departures. The departures have coincided with customers’ continuing to move away from stockpickers for cheaper products that mimic the performance of an index.
Jupiter on Monday said investors’ withdrawals in the first quarter were the result of Chrysalis Investment Trust splitting from Jupiter, as well as outflows from Whitmore’s funds.
Alliance Trust earlier this month said it was ditching Jupiter as one of its fund managers, because of Whitmore’s departure from the business.
Jupiter also lost veteran UK equity fund manager Richard Buxton last August when he retired from the industry. It has recently hired Adrian Gosden, a former Artemis fund manager, and Chris Morrison, who brought with them a £400mn UK Equity Income fund.
UK equity funds, in particular, are under pressure as investors turn to global stocks for higher returns. Mounting regulation is increasing the burden on asset managers, driving merger discussions in the industry as fund groups seek to increase their asset base and slash costs.
Jupiter noted that McCormick had managed a global value strategy for two Merlin funds until recently, returning more than 45 per cent over two years in US dollars, and beating the MSCI ACWI index by 11 per cent.