Jupiter takes on Woodford mandate on the back of outflows

Value manager Ben Whitmore ‘more diversified’ than Woodford

Omnis has handed its Income & Growth fund that used to be run by Neil Woodford to Jupiter, which is mostly known for its third-party retail funds rather than running segregated mandates.

Openwork’s £6.8bn asset management business took the decision to boot Woodford off the £330m mandate earlier this month, days after the stricken manager’s fund had been suspended. Unlike St James’s Place, which also had a segregated mandate with Woodford but handed it to Columbia Threadneedle and RWC, Omnis did not immediately announce who was to take over the fund.

However, on Friday it revealed Ben Whitmore (pictured) would become the replacement manager.

‘That’s still a nice mandate to win’

Historically, Jupiter has not tended to take on segregated mandates, said Darius McDermott, managing director of Chelsea Financial Services.

But he says a difficult climate for asset managers, where firms are struggling to sell to offset their normal attrition rates, may have caused the FTSE 250 firm to have a change of heart. Asset managers earn lower fees on segregated mandates, which are more competitively priced than retail funds because the assets tend to be large and stickier.

Jupiter was hit hard by outflows of £4.6bn in 2018, while profits for the year fell to £179.2m.

McDermott estimated Omnis will be paying around 30 to 40 basis points for Jupiter. “That’s still a nice mandate to win,” he said.

“Their special situations fund that Ben runs is still 75bps, so it’s not like they’re cannibalising their own book,” he says. “They’re winning new money on a lower fee.”

Portfolio Adviser understands that Jupiter has over 30 segregated mandates, including the European and emerging market equity funds it already runs for Omnis.

Jupiter’s newly minted global distribution head, Phil Wagstaff, told the publication: “While Jupiter is historically renowned for its retail fund management business, we have a long-established reputation for managing segregated mandates, for both intermediary and institutional clients globally.

“Our aim is to provide all clients with the structures that suit them, either pooled or segregated, depending on size, strategy and capacity.”

Whitmore ‘much more diversified’ than Woodford

Whitmore is “a sensible replacement” for Woodford, says Adrian Lowcock, head of personal investing at Willis Owen.

“Ben Whitmore is a contrarian value manager so has a style similar to what was expected from Woodford,” he said. “However he favours stocks that pay a higher dividend, which has seen a bias further up the market-cap scale than peers.”

McDermott said Whitmore is one of the only “out and out, hand up value managers” left but adds that he is more diversified than Woodford.

“He has deep knowledge of his investment process and importantly is a manager that understands his own weaknesses and as such sticks very rigidly to his investment philosophy and process,” Ryan Hughes, AJ Bell’s head of active portfolios, added. “With a focus on large cap investing and a focus on out of favour companies, he is not dissimilar to Woodford of old and therefore appointing him to the mandate seems a logical choice.”

Jupiter said in a statement that Whitmore will draw on the “deep experience of the wider team” particularly UK manager Richard Curling who has invested in small and mid-cap companies for over 30 years.

Commenting on the appointment Jupiter CIO, Stephen Pearson, said: “Omnis has been a valued client since we first took on a mandate for them over five years ago. At a time when it is crucially important to maintain investor confidence in active management, we look forward to working closely with them to help deliver the best outcomes for their clients and the advisers that serve them”.

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