“If the big boys drill a well, we need to be there to service them,” he told Portfolio Adviser’s sister publication Fund Selector Asia, adding: “Our business is globalising rapidly. If you become a UK-only supplier, you lose relevance for some clients.”
The comments were made as part of an explanation of the group’s Asian expansion strategy, but serve equally well as justification for the hiring of Newton Asian Income Fund manager, Jason Pidcock.
Indeed, far from coming as a surprise, that the firm has hired an Asian income manager should have been met with barely a raised eyebrow, given (albeit, with hindsight) how well the firm has telegraphed its strategy.
In Jupiter’s 2014 annual report, the firm pointed out that Asia is one of the world’s fastest growing fund market. And, perhaps more to the point that, “Although there is demand for all types of product, preferences in Asia vary by country. Asian and emerging market equity funds tend to be popular, as are bond funds.”
Later in the report it said: “We continued to add depth to our fund management talent during the year. We recruited a head of strategy for global emerging markets, a key area for us as a large and rapidly growing asset class.
He brings a number of years’ experience of Asian and emerging market equities, and is responsible for leading our existing highly experienced team of emerging market fund managers, to attract and grow assets under management globally whilst delivering strong investment performance and developing new products.
If one adds to that the all-consuming and seemingly inexorable demand for income that has enveloped the world, suddenly Pidcock’s imminent arrival seems a great deal less surprising.
And, if previous track record the initial reactions by fund buyers is any judge, in Pidcock, Jupiter have made a very good hire.
Over a five year period, Pidcock’s Newton Asian Income fund has produced 63.54%, which puts it fourth over that time frame according to FE Analytics data, behind the three First State funds, Asia Pacific Sustainability, Asia Pacific and Asia Pacific Leaders.
Adrian Lowcock, head of investing at AXA Self Investor said of the hire: “For Jupiter, this is a significant announcement; in recruiting Jason Pidcock they have gained a rising star of the sector. With the established Asian funds struggling for capacity there is plenty of opportunity for fund groups to provide funds for UK investors looking to invest in Asia.”
It also removes one of the concerns that some fund pickers have had with the Newton fund – scale.
Ben Willis, head of research at Whitechurch Securities said: “We have had concerns over the fund’s size over the years, which have seen us scale back our exposure gradually; however, our belief in Pidcock’s ability and expertise in managing the fund was the main reason for maintaining our position. Now that he has moved on, the decision has been made for us and we are selling our entire position. Jupiter have managed to secure a top quality manager in Pidcock, and we will naturally be very interested in any new venture, though this could be some time away.”
However, while the hire is a good one, there is reason to be a little cautious with one’s praise. As Ben Yearsley, head of investment research at Charles Stanley Direct told Portfolio Adviser, there is quite a difference in style between the team based approach of Newton, where managers were backed up by a significant research team and a very structured process, and the collegiate atmosphere that pervades Jupiter.
“I think Jason is a good hire, but it is a bit of a gamble for Jupiter as he will be on his own to a much greater extent, and the result of that won’t be known for a few years,” he said.
Asked if the arrival of Ross Teverson and the firm’s rearrangement of managers into strategy teams that should allow better sharing of ideas, Yearsley said that that could well help, but it would still remain a much less structured environment.
Ultimately, whether Pidcock flourishes or fails with more freedom will only be known in time, but what can be said is that he has experience building up an Asian Income product from scratch very successfully and with Jupiter’s sights set on emerging market expansion both for its UK clients and for the business as a whole, that is a very desirable attribute.
