With the recent departure of jupiter's chief executive, the group's CIO Edward Bonham Carter is to f...
With the recent departure of jupiter's chief executive, the group's CIO Edward Bonham Carter is to fill in on a partnership basis.
Investment Week talks to him about his roles at Jupiter and whether more changes are imminent.
How can you combine the role of chief executive along with your existing jobs of chief investment officer and manager of UK Growth?
It's going to be a challenge. When it comes to UK Growth I will treat myself like any other fund manager. If I start to perform badly relative to my colleagues and peers then I am going to sack myself. We have got a talented team and there is a lot of competition with running the funds.
I think it takes a year at least to judge a manager. It is more whether I feel I am devoting enough time to running money and to my unit holders as well, so it is not just about performance.
We have an executive committee of four running the business so it does not all fall entirely on my shoulders. The others are Johnathan Carey, Alan Miller and Martin Schueller. So that is partly down to structure.
One way we will change is having a more partnership approach to managing business. Everyone is taking more responsibility for areas where they are responsible anyway.
Are there enough hours in the day for each job and how will you divide up your time?
There are two things involved in productivity: time and efficiency and I will have to be more effective.
I tend to start at 8:30 and work until 7 and also use weekends as thinking time. We have always believed in the importance of putting in thinking time. It is also important to stress I am not working in isolation.
Sat around me are Philip Gibbs, Alan Miller, Adrian Paterson, Tony Nutt and Prakash Rajasekeran. Compared to the competition, we have got a plethora of choice.
Outside of fund management, Jonathan Carey is responsible for finance, Imro, IT, legal and unit trust admin and Steve Glynn for sales and marketing.
So is your new role of chief executive purely titular?
No, because John Duffield has left and that is a big hole that needs filling. I think in modern companies there are lots of areas where people are experts and it is not the only way to run a company by having a king in charge. I think the partnership model is an equally pertinent one. It is the way Goldman Sachs is structured and that is one of the most successful organisations of the last 10 years.
What is Commerzbank's influence going to be in the new Jupiter?
If you look at its other asset managers such as Montgomery in the US there are a couple of Commerzbank employees there. They do not have the resources to take over running Jupiter. The board of Jupiter International Group will meet maybe four times a year. We will have Commerzbank people as we are part of their global fund management operation. They have always believed in buying local business and having it run by locals.
Is there a danger that Jupiter could take its eye off the ball?
No. Fund managers have left or had their responsibilities on funds changed. My job is to keep their eyes on running those portfolios.
I do not want those fund managers on business strategy or organisational committees. At the moment they are buying and selling shares and going to company meetings as usual. Their roles have not changed.
What about Alan Miller? He's a fund manager who is now on the executive committee.
Most people in the company report in on the administration side which Alan does not cover.
His main role is as head of specialist pension funds but he has done this job for six months already. Nothing has changed.
What is the deal with Commerzbank?
Commerzbank will be very happy to pay substantial amounts to directors of this business and to the rest of the staff for remaining in the business.
This will include loyalty payments for staying for the next 12 months.
More importantly Commerzbank is committed to putting in place an equity scheme whereby all executives of the company will have a share in the equity of the company going forward. We believe the best way to incentivise people in the fund management game is to give them a share of the business. On this second scheme, Commerzbank is looking to agree the principals of it by November or December this year and then put in place for January 2001.
I think it is going to be similar to the last deal, the original one that came to an end on 31 December 1999.
Commerzbank already has similar ones in place with its French and US fund management subsidiaries.
How was the original 25% of Jupiter valued when Commerzbank bought it out?
It is wrong for us to comment on this. It is a matter for John Duffield and Commerzbank.
Surely Commerzbank's influence is going to be stronger in the future? The head of their asset management operation is joining the board.
Yes, it should be very helpful to us. As long as we have access to their resources when we choose then that is great.
What has Commerzbank got that you would like to get your hands on?
I don't know specifically. We will have to see over the next two or three years. That said the whole German savings market is going to be revolutionised over the next five to 10 years and that could be very exciting for Jupiter.
How are you looking to change Jupiter's structure as a business?
We intend to carry on the development started four or five years ago.
We are focused particularly on performance and we are not interested in funds under management for its own sake. We are not being told by Commerzbank that we have got to have £20bn or £30bn under management by a specified date because there is no necessary link between economies of scale and an individual fund manager performing any better. We realise that and Commerzbank realises that. We are under no pressure to expand or make an a
‘Promising lead’ or ‘Back to the lab’?
PA360 2019 revisited
Complaints triple in past year
Our weekly heads-up for advisers
Tracking real performance