Omnis Investments has pulled Jupiter off its £230m European equity fund only a year after launch and handed the mandate to Fidelity International’s Sam Morse.
Omnis said Fidelity had been chosen following a “competitive selection process” supported by researcher Fundhouse. Fidelity currently runs two other Omnis mandates – the £279.3m Global Emerging Markets Equity Leaders fund and the £76.9m Strategic Bond fund.
The Omnis European Equity Leaders fund was launched by Jupiter’s European equity team last August. It currently has £226.3m in assets under management.
Morse (pictured) who manages the Fidelity European and European Values trust will run the Omnis mandate from 1 October.
Omnis remained tight-lipped about its rationale for removing Jupiter, stating only that the decision was made “as part of Omnis’ focus on delivering the best outcomes for clients and the advisers that serve them”.
Jupiter declined to comment.
Jupiter’s swift replacement is surprising
Chelsea Financial Services managing director Darius McDermott was surprised by Omnis’ decision to replace Jupiter after only a year given the European equity team’s strong performance.
The Omnis European Equity Leaders fund, which sits in the IA Unclassified sector, has returned 2.6% over the last year and 8.5% on a six-month view.
Its latest fact sheet lists Greg Herbert as the primary manager, as well as Mark Heslop and Mark Nichols who defected from Columbia Threadneedle last year to replace Jupiter heavy hitter Alexander Darwall after he left to set up his own firm.
In the last 12-months Jupiter European, which Heslop and Nichols took over for Darwall, has returned 3.5%, only slightly below Morse’s Fidelity European fund which has returned 4.4%. Both are in the second quartile, having beaten the IA Europe ex UK’s gains of 2.1%.
“There’s certainly no performance reason I can see,” McDermott said. “It’s not like they’re going from a good manager to a bad manager or anything like that.”
However Portfolio Adviser understands that the Omnis mandate had been chiefly run by Jupiter European Special Situations manager Cedric de Fonclare who retired from Jupiter during the lockdown period in May. His Special Situations fund, which has been given to Heslop and Nichols, is in the second quartile of the IA Europe ex UK sector with returns of 3.2% and 5.2% over one and three years versus the sector’s gains of 2.1% and 5.9%.
Sam Morse hailed as a worthy successor
AJ Bell head of active portfolios Ryan Hughes was supportive of Omnis’ decision to appoint Morse who he described as a “highly capable and experienced fund manager who has delivered handsomely for his investors over the last decade”.
“He has a focus on high quality as evidenced by big positions including Nestle, Roche and LVMH and has a clear investment philosophy meaning there should be few surprises in the type of companies found in the fund, with reliable businesses that have attractive dividend growth prospects being key to the strategy,” Hughes said.
Openwork Wealth & Platform director Mike Morrow said clients would now be able to benefit from Morse’s long-established strategy which he uses on the £2.5bn Fidelity European fund.
“Our investment philosophy is to provide high quality investment solutions, which strive to achieve the results that Openwork clients expect from their investments over time. I have no doubt that Fidelity will manage the portfolio in the best interests of clients and advisers.”
