Jupiter makes double cut after tough year

US equities and emerging markets managers exit the FTSE 250 fund house

Jupiter has cut two managers that have been with the team for two decades following a tough year for the firm in which it has been hit by record outflows.

The firm revealed on Thursday that head of strategy for US equities Sebastian Radcliffe (pictured) and fund management director on the global emerging markets team Ben Surtees would be leaving the company.

Radcliffe ran the £242m Jupiter North American Income fund, which he launched after joining the firm in 1998, and co-managed the Global Equity Income fund alongside Greg Herbert.

Surtees had been with the asset manager since 1997 and on its Far East desk since 2000.

The FTSE 250 fund group said the decision was made following a review of its investment capability and strategic direction for 2019.

Radcliffe exits

One source told Portfolio Adviser Radcliffe’s exit was due to changing circumstances in wanting to be based abroad as opposed to an issue with performance.

Another person with knowledge of the matter said that the fund had come under review because it had been struggling to bring in money.

Darius McDermott, managing director at Chelsea Financial Services, said Radcliffe’s recent underperformance is mostly down to his value style bias, which has been out of favour particularly in America where Silicon Valley giants have driven stock market gains.

“While the more recent numbers have been challenged, I think a big chunk of that is style related,” he said. “Amazon at 300x p/e – that would not have fit into the bucket of stocks that Seb would have looked at or owned.”

He pointed out there have been periods when value is in vogue in the US where Radcliffe’s fund has done very well.

Since it was launched in August 1998 the North American Income fund has returned 232.93% to investors, according to FE Analytics. The IA North America sector has produced returns of 290.95% over the same time frame.

The fund has lagged behind the IA North America sector over one, three and five years. Year-to-date it has returned 1.23%.

Radcliffe’s £16.3m Global Equity Income fund has fared better in the near-term and is second quartile against the IA Global Equity Income sector on a one, three and five year view.

Building Gem brand

Surtees’ departure meanwhile has been described by a source as performance driven.

They said the view in-house is that Amélie Thévenet, who has been named as Surtees’ replacement, was deemed to be better placed to deliver performance for Jupiter’s global emerging markets team, which has become a key area of growth for the firm.

In recent years the fund group has snagged significant hires in this area including Standard Life Investment’s Ross Teverson in 2014 and ex-Newton man Jason Pidcock who joined a year later.

Surtees’ fund is relatively small standing at £42.3m assets. While it is first quartile on a three-month view, beating peers in the IA Asia Pacific Excluding Japan with returns of 1.1% versus the latter’s -2.2%, it is fourth quartile over one and three years and third quartile over five years.

Since Surtee took the reins of the fund in 2009 it has delivered returns of 128.71%, behind the IA Asia Ex Japan sector’s  133.61%.

Stephen Pearson CIO of Jupiter said on the double departure: “I would like to thank Sebastian and Ben for their hard work and commitment over the many years that they have worked at Jupiter. They leave with our very best wishes for the future.”

Replacements

Stuart Cox has been named as Radcliffe’s replacement on the North American Income fund. Cox, who joined the firm from Caledonia Investments in 2015, currently runs the Jupiter Global Managed fund.

Jupiter said there should be continuity of investment strategy for clients in the North American Income fund with Cox at the helm. It noted that his Global Managed fund has a high exposure to US equities and a “significant overlap” with Radcliffe’s fund, owning many of the same large-cap premium yielding companies.

Taking over for Surtees’ fund is rookie manager Thévenet.

Thévenet joined the Jupiter team 11 years ago and was recently promoted to fund manager. Jupiter has described her as a key member of the global emerging markets team led by head of strategy Teverson.

The FTSE 250 fund group added that she will apply the team’s ‘change based’ investment philosophy which is characterised by high active share, concentrated portfolio and exposure to mid and small size companies in the region.

Herbert will become the sole manager on the Global Equity Income mandate that he and Radcliffe launched five years ago. He will also continue to manage the £71m Jupiter European Income fund.

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