Jupiter Asset Management’s shrinking stable of investment trusts is at risk of a further contraction after Robert Siddles (pictured), the veteran manager of Jupiter US Smaller Companies (JUS ) announced plans to retire for family reasons, prompting the board to say it would review its fund management options.
The prospect of Siddles’ departure next April – by which time he will have run the £124m trust for over 20 years – represents almost an existential challenge for a board that followed the manager when he moved from BMO Global Asset Management (then F&C Investments) to Jupiter seven years ago.
There is likely to be strong interest in JUS from rival fund management groups if the trust’s board – chaired controversially for 27 years by veteran GAM US fund manager Gordon Grender – opts to drop Jupiter, which is in a transition under chief executive Andrew Formica who joined last year and led the its takeover of Merian Global Investors this year.
Alternatively, in a chaotic year for stock markets that has caused a spike in trust wind-ups and mergers, analysts said JUS could seek to join forces with its £177m rival JPMorgan US Smaller Companies (JUSC ) to create a larger and more liquid investment vehicle.
After a difficult period a few years ago for the value-style fund manager, Siddles has improved recent performance. JUS’s underlying net asset value (NAV) has grown 22.2% in the past three years, ahead of JUSC on 19.4% and its benchmark, the Russell 2000, up 13.5%. That’s translated into a 14.6% shareholder return, which also beats JUSC’s 10.3%.
However, the tables turn over longer periods. Over five and 10 years JUSC, which has been managed by the more growth oriented Don San Jose since 2008, has grown NAV by 94.3% and 291.7%, underpinning shareholder returns of 74.4% and 328.5%. That beats the Jupiter trust whose shares have delivered 69.5% and 171.3% over five and ten years, underperforming the Russell 2000’s 77.7% and 231.9% growth.
Both trusts have struggled this year with JUSC down 13% and JUS off 11% since January, with their shares trading on wide discounts of 12% and 14% below their NAV.
In a statement JUS thanked Siddles for his strong long-term performance delivered through a range of market conditions, and wished him well. According to Numis Securities data, Siddles grew its NAV by 408% since 2001, just ahead of the benchmark, after a career that had seen him work at Gartmore and Capel-Cure Myers.
‘As a result of Robert’s retirement, the board will review options for the future management of the company, and will make a further announcement in due course,’ it said.
The loss of the JUS mandate would leave just two small Jupiter branded trusts – the £71m Jupiter Emerging & Frontier Income (JEFI ) and £39m Jupiter Green (JGC ) – after the decision of the group’s former flagship, the £775m European Opportunities (JEO ), to follow fund manager Alexander Darwall to his new firm. This month the much-diminished Jupiter UK Growth (JUKG ) announced it would seek to liquidate and return its £30m assets to shareholders.
On the bright side, however, the Merian merger did bring over the currently popular and fast growing Merian Chrysalis (MERI ), a two-year old growth capital fund that has swelled to a market value of £500m following a £95m share issue this month.
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