By Kira Nickerson Jupiter is looking to finalise an incentive plan that will ensure its current fun...
By Kira Nickerson
Jupiter is looking to finalise an incentive plan that will ensure its current fund management team is in place for the next year.
Edward Bonham Carter, joint chief executive at Jupiter, said: "The whole idea is that it will be structured similar to the previous scheme where all staff will be able to participate in the profit and capital value of Jupiter.
"For all intents and purposes it will operate like an equity scheme."
The most recent departure from the group is Adrian Paterson, manager of the Primadona investment trust, Jupiter UK Smaller Companies Fund, UK Exempt and Jupiter Undervalued Assets funds. Paterson is leaving the group to go travelling.
While a handful of its fund managers have departed over the past 12 months, some intermediaries have put the group's funds on hold over much of the past year after the departure of the group's chairman John Duffield and several of its directors. It was believed that Jupiter would lose a number of fund managers to Duffield's new investment house, New Star Asset Management.
As part of the court case settled in November between Duffield and Jupiter, fund manager Alan Miller is to join New Star, but Duffield is prevented from poaching any other managers from Jupiter until after May 2001.
Bonham Carter said he believed the possibility of any further significant management losses would be low.
He added: "The key thing is to create a positive incentive for staff to keep them here. We see John as just another competitor that is out there. Jupiter has had and still has one of the lowest turnovers in the City and the key issue for us to have the money managed by outstanding fund managers such as Justin Seager and Kenneth Warnock."
The group is continuing to recruit, but Bonham Carter said talented fund managers who fit into the culture and management style of Jupiter are few and far between. As a result of the departures and the management restructuring, Jupiter has reshuffled its fund management team. Bonham Carter is to step down as manager of the frAA rated UK Growth fund, which will then be taken over by Justin Seager. Seager joined the group earlier this year from Dresdner where he was manager of Dresdner UK Equity Growth. Seager is also to take over as manager of the Primadona investment trust from Paterson, who is to remain as a non-executive director on the trust's board.
While Seager does not officially take on the roles until 1 January, he is already working on the portfolios.
He said: "Some of the safe stocks that we were invested in UK Growth, due to the recent volatility, are now looking overvalued so this is something we need to be thinking about going forward. I may look to up the portfolio weighting in consumer cyclicals through retailers and some technology.
"By retailers I do not mean companies like Marks & Spencer but some of the smaller ones are looking interesting. We do need exposure to some long duration stocks like technology but I still think most of the sector is too expensive. When you compare UK tech, media and telecoms versus the US, UK stocks are still 25%-30% too dear."
However, he said, there are select companies that are less highly valued and offer good opportunities, in particular some small to medium sized biotechs. UK Growth has benefited from its holdings in Celltech and Shires but Seager believes these companies are looking expensive and as such he is adding new holdings in other companies in this area of the market.
He said: "I think Edward and I run money on a very similar basis. I am a pragmatic investor not growth through thick and thin. I will own whatever is necessary to perform. However, we do take bets in a different way - I think he has been brave in holding some of the stocks that he has like housebuilders, but it has worked well for him."
Bonham Carter said that while he was sorry to be letting go of the £744m UK Growth fund after six years, he believes re-appointing himself to the £33m Undervalued Assets fund, previously run by Paterson, is a good move. He said: "I am re-appointing myself to something more manageable and it suits my more natural value style."
Seager is also to take over the Jupiter Primadona Investment Trust and has already been visiting companies with Paterson, ahead of the hand over at the start of the year.
Seager said: "Primadona is a smaller fund and has the ability to invest in a lot of pre-IPO situations, which I plan to continue with. Jupiter has a lot of contacts in this area and I have a lot as well, although I wasn't allowed to invest in them at my previous place. I think IPOs will continue to be good for the trust."
Other changes the group intends to make at the start of the year is to appoint Rebecca Williams, who has worked with the UK team for five years, as manager of the Jupiter UK Smaller Companies.
Three examples of compensation rule issues
Buying in baskets
Scam victims lost average £91,000
Stepped down following MBO
Helped by rising oil price