The looming change of manager on the struggling Jupiter UK Mid Cap fund has prompted investment research firm Adviser Centre to remove it from its recommended list.
Jupiter recently announced that Richard Watts, who has managed the fund for fifteen years, is exiting the business and taking the Chrysalis investment trust, which he also ran at Jupiter, with him to a new firm he is launching.
The UK Mid Cap fund is the worst performer out of 220 funds in the IA UK All Companies sector over the past five years to December 1, losing 15 per cent.
FTAdviser previously reported that the fund has had outflows of around £100mn a month.
Watts is being replaced as manager of the fund by Tim Service. Like Watts, Service joined Jupiter when the company acquired Merian Global Investors.
Service is part of the UK smaller companies team at Jupiter, reporting to Dan Nickols.
Peter Toogood, chief investment officer at Adviser Centre and parent company Embark Group, told FTAdviser: “We know and like Service, but until we have seen him we can't be clear about his exact focus.
"You bought this fund only if you believed in the dominance of all things platform and digital in practice. It is an aggressive growth fund and we badged it accordingly.”
Watts is leaving Jupiter to launch G10 Capital, which will have as its sole activity the management of the Chrysalis investment trust.
This trust was launched in 2018 to enable the managers of the Mid Cap fund to invest more extensively in unquoted companies.
Many investors had previously expressed their disquiet at the fee arrangements for this trust, with Watts and his co-manager Nick Williamson receiving tens of millions of pounds of shares in the trust as a performance fee.
That fee was separate to the remuneration Watts received for managing the Jupiter UK Mid Cap fund.
The board of the Chrysalis trust expressed a desire to have Watts sole focus being on managing the trust.
Watts's departure from Jupiter means three of the five fund managers who created Merian Global Investors, having led a management buyout from Old Mutual before selling it on to Jupiter, are no longer employees, as various earn-out arrangements arising from the sale of Merian to Jupiter take effect.
David.Thorpe@ft.com
