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Jupiter UK Growth announces Merian’s Richard Buxton as lead manager

Jupiter UK Growth (JUKG) has announced that an agreement has been reached with Richard Buxton to take the reins as lead manager of the trust. Richard will be supported by Errol Francis and Ed Meier, who the company notes have worked with Richard over many years.

We wrote on JUKG’s poor performance last October (click here to read the article).

This follows the board’s announcement 4 October 2019 that it had decided to review its investment strategy following a period of poor performance. This was a comprehensive exercise which considered various alternatives, including:

  1. the adoption of an alternative manager from within Jupiter;
  2. the appointment of another fund management company as investment manager; and
  3. the liquidation of the company together with a rollover into another listed investment company.

Manager news follows proposed acquisition of Jupiter by Merian Global Investors

The conclusion to appoint Richard Buxton follows the announcement by Jupiter on 17 February 2020 regarding its proposed acquisition of Merian Global Investors (Merian). JUKG  says Richard will assume lead fund management responsibility following approval of the transaction by Jupiter’s shareholders and regulators which is expected to take place before the end of April. Current fund management arrangements with Jupiter will be on-going until Richard’s appointment.

JUKG went on to say that “Richard Buxton joined Merian as head of UK equities and manager of the Merian UK Alpha Fund in 2013. He was also the firm’s CEO between August 2015 and January 2019. Richard was previously at Schroders, where he managed the Schroder UK Alpha Plus Fund and the Schroder UK Growth Fund plc, an investment trust. Prior to Schroders he spent more than a decade at Baring Asset Management, having commenced his investment career in 1985 at Brown Shipley Asset Management. Richard was awarded the Outstanding Contribution to the Industry honour at the Morningstar OBSR Awards in 2012 and has a degree in English language and literature from the University of Oxford.”

Investment objective and policy

JUKG says there will  be no change to the investment objective or policy as a result of the proposed change of lead fund manager. The company’s investment objective is to deliver capital appreciation from holding a portfolio of predominantly listed investments. While there are no specific individual stock, sector, geographical or market capitalisation limitations or weightings applicable, the manager will invest principally in companies which are listed in and/or which undertake a significant proportion of their business in the United Kingdom.

Investment management fees

The base management fee charged to the company will continue to be 0.50% of adjusted net assets, reducing to 0.45% for adjusted net assets over £150m and up to £250m and reducing further to 0.40% for adjusted net assets over £250m. However, as part of these new arrangements the Board has agreed with Jupiter that the company will not be charged a base management fee for the period from 1 January 2020 to 31 December 2020. Based on the current net asset value this is an estimated saving of c.£240,000 over that period.

Discount and premium management

JUKG says it remains committed to growing the company over time, recognising that the net assets are currently below the minimum size preferred for prospective investment by many institutional and wealth management investors.

The company will continue its stated policy of using share buybacks and new issues of shares to ensure that, in normal market conditions, the market price of its shares will closely track the net asset value per share. The Board believes that this commitment to active management of discount and premium produces improved liquidity for both buyers and sellers of the company’s shares.

Tom Bartlam, chairman of JUKG’s board, commented: “Over the last few months, the board considered a range of options for the future of the company. After careful consideration, we are pleased to have reached an agreement to appoint Richard Buxton as lead fund manager of the Company. Richard is one of the most prominent UK equity investors and brings with him a wealth of experience. The board looks forward to working with Richard and his colleagues to determine the best way to broaden and grow the appeal of the company, while continuing our association with Jupiter.”

[This potentially solves a headache for the board, which had instituted a review of the future of the company following an extended period of poor performance under Steve Davies. Liquidation was a serious possibility but the Buxton name and track record could stem the shrinkage of the fund and allow it to re-expand. The shares are up 1% at the time of writing but the discount was already tight thanks to the discount control mechanism.]

JUKG: Jupiter UK Growth announces Merian’s Richard Buxton as lead manager

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