Ben Whitmore’s departure from Jupiter, announced in January, left some big shoes to fill. The successor needed to follow a similar approach, be focused on value but also well-versed in managing a large fund – the Jupiter Income fund was around £1.4bn in size at the time of the handover. There were only a handful of managers that could have fulfilled the brief.
By a neat coincidence, Adrian Gosden, then of Gam, and formerly Adrian Frost’s co-manager at Artemis, was also mulling a change. He had moved to Gam in 2017, having spent 13 years at Artemis. He raised £500m in a tough environment for UK equities. However, Gam had had a series of problems at the corporate level, including a well-publicised scandal involving one of its senior fund managers, and an abortive bid from Liontrust. Gosden says this was tricky for clients that had put faith in him and co-manager Chris Morrison.
The perfect fit
Gam and Jupiter forged a deal whereby Gosden and Morrison moved to Jupiter and brought the assets of the Gam UK Equity Income fund with them. UK equities had been a sideline for Gam, with just one team, whereas Jupiter had a strong UK franchise, with smaller companies, special situations, growth, income and multi-cap funds.
Gosden says: “At Jupiter, the breadth of expertise enables us to interact and share. That’s a nice place to be. We can bounce ideas around. Jupiter has a great heritage in the UK market and is well-connected.” At a time when the market for UK equities remains relatively limited, this is important. “If anyone is looking for UK equities, they’d be looking at Jupiter,” he says.
Since April, the team has been managing the Jupiter UK Income fund (formerly named Jupiter Income). The Gam UK Equity Income fund merged into the newly created Jupiter UK Multi Cap Income fund. The multi-cap fund has a balance of 50% in larger companies and 50% in mid-sized and smaller companies. The Jupiter Income fund is 80% large and 20% small/mid-cap.
Both funds are run using the same philosophy Gosden and Morrison employed at Gam. This prioritises a focus on free cashflow for individual businesses, and therefore their ability to pay dividends. Idea generation starts with a filter on cashflow metrics. They will then look at the industry in which a company operates, and then focus on the company itself, including competitor analysis and pricing power. The team will meet with management, carrying out around 200 one-to-one meetings per year.
Read the rest of this article in the November issue of Portfolio Adviser magazine
