Fund buyers claim Jupiter has found good replacements for departing fund manager Ben Whitmore, despite the company’s share price dropping as much as 13 per cent on the announcement.
It was announced this morning (January 9) that Whitmore, whose £10bn book of business accounts for around 20 per cent of Jupiter’s total assets under management, is departing to set up his own firm.
Alex Savvides was announced as his replacement on the flagship Jupiter UK Special Situations fund.
Savvides has spent his entire investment career at JO Hambro Capital Management, where he ran the UK Dynamic fund, a £1.2bn mandate.
Meanwhile, it was previously announced that Adrian Gosden would join Jupiter from GAM to take on the UK income mandate.
Darius McDermott, investment adviser on the VT Chelsea range of multi-manager funds, which owns both the JO Hambro and the Jupiter funds, said: “Investors will have a lot of confidence in Alex Savvides. His track record is very good.
"He is probably less deep value than Ben Whitmore, but they do deploy the value style. And Adrian Gosden has an excellent record at managing equity income funds.”
Ben Yearsley, who has held Savvides' fund since 2010, is also confident in the succession plan.
Although he does feel the length of time Savvides is on gardening leave, and therefore not in the market, may determine whether Yearsley retains his investment in the Jupiter fund.
Despite this, he has confidence in Savvides ability.
Industry insiders have noted that Savvides' information ratio, a data piece used by fund buyers to measure the ratio of risk versus return, is superior to that of Whitmore, with both managers having information ratios above 1, where a number above 0.6 is considered good.
Whitmore and Jupiter are in negotiations around whether Whitmore will continue to manage the £1bn Jupiter Global Value Unit Trust even after he departs the firm.
If agreement is reached with Jupiter, then he would manage the global fund on a “sub advised” basis.
This means the fund would continue to be branded as Jupiter, and to be run by that company from a regulatory perspective, but Whitmore would run the money at his new firm.
McDermott described this as a potentially “good outcome” for the clients of the global fund, and for Jupiter.
He said setting up a boutique is a challenge for a fund manager as asset management tends to have high levels of fixed costs, meaning there is an urgency to gather assets.
Whitmore is the third Jupiter fund manager to exit the firm and launch a boutique in recent years, following Alex Darwall and Richard Watts.
One challenge he may face, according to some fund buyers, is that in recent years Whitmore has not been prominent in terms of attending industry events or media events, with one fund buyer remarking they have been trying for the past 24 months to get a meeting with Whitmore, without success.
