Jupiter Annual Report 2010 - Jupiter Asset Management

Operational review | Who we are
Fund management
We have a single investment platform comprising 39 fund managers
based in London, who are responsible for managing our range of
funds across different client segments and products. Fund managers
may manage a number of portfolios across our various product lines
including mutual funds, segregated mandates, investment trusts and
hedge funds. Private client assets are managed separately by 11
private client fund managers.
Although we are predominantly an equities-focused investment
manager, our investment capabilities span a broad range of themes.
These cover different aspects of investing in UK equities, including
growth and income styles, European and emerging markets equities
and specialist areas, such as financial sector equities. As well as
these long-only equity styles, we also have capabilities in fund of
funds, absolute return and fixed income.
Philosophy and culture
Our investment philosophy is to seek to generate investment
outperformance against relevant benchmarks over the medium
to long term without exposing our clients to unnecessary risk.
We believe that talented fund managers perform best if they are
given the freedom to invest as they see fit, subject to the constraints
set by each fund’s investment objectives. While our fund managers
work as a closely knit team, sharing stock ideas and debating market
prospects, each manager has individual responsibility for their own
portfolios and is held accountable for the investment performance
of the funds they manage. Our investment process is not run
by a committee and there is no house view on markets, asset
allocation or core lists of stocks. We believe that such committeebased
approaches can result in investment decisions that move
towards consensus and result in weak compromises and mediocre
performance. Instead, our fund managers take an active approach
to managing their investments and have considerable scope to
adopt investment positions against prevailing consensus in the
market and the portfolio’s benchmark in order to achieve investment
outperformance for our clients. Our fund managers tend to emphasise
stock selection, rather than specifically targeting relative sector
or geographic weightings. In addition to making fund managers
clearly accountable for investment performance, we encourage
Figure 1
This chart shows the breakdown of Jupiter’s AUM as at
31 December 2010 by investment franchise, demonstrating
a broad spread across strategies, thus providing a positive
level of diversification within our business model.
them to invest personally in the funds they and their colleagues
manage in order to align their interests with those of our clients.
A number of fund managers have substantial personal investments
in our funds.
A considerable proportion of our fund managers have worked
together at Jupiter for a number of years, with 17 individuals having
been with us for 10 years or more. A significant number of our fund
managers have achieved recognition in the industry, reflecting their
investment expertise and performance records.
Distribution and marketing
We operate across a number of different geographies and
markets, each of which has its own characteristics. While we
look to maintain a consistent brand and distribution approach across
these markets, for example, structuring our distribution on a product
neutral basis, we also recognise their differences and tailor our
approach accordingly.
Our core market is the UK, due both to the history of the Group’s
location and its development. We believe that the sale of mutual
funds within the UK long-term savings market contains attractive
growth opportunities for asset managers. As a market, the UK mutual
fund market looks different to the rest of Europe. While it relies on a
combination of client awareness and intermediary advice to end
clients, the intermediary segment is largely populated by independent
financial advisers rather than the retail and private banks that
dominate the rest of Europe.
Our brand message has been built through a sustained long-term
investment in marketing which includes national, trade press and
digital advertisements and outdoor media. Advertising is focused
on emphasising our performance, supported by specific messages
for key products. This contributes, in our view, to the ongoing
enhancement of our brand. The success of this approach is, in part,
demonstrated by the results of industry surveys. We consistently
rank in the top five UK asset managers for overall brand awareness
and advertising recall among intermediaries (source: Consensus
Research, Investment Funds Survey 2010). We are also consistently
ranked in the top five fund managers in the UK unit trust/OEIC
category in the Press Watch survey for positive press mentions
in national newspapers, having ranked 2nd in 2008, 3rd in 2009
and 3rd in 2010.
We have also been expanding our presence in the European mutual
fund market. As mentioned above, the European market not only has
different characteristics to the UK, but also has distinct national
characteristics, although the EU’s drive for product portability through
the UCITS regime has made Europe a more open market across
which to distribute products.
7.3%
Fund of funds
UK Income
European
UK Growth 8.5%
International
Discretionary
Emerging markets
Financials
ESG/SRI/Climate Change
Fixed Income
5.7%
11.6%
2.7% 1.4% 25.4%
4.8%
15.1%
17.6%
We are positioned as a high performance, independent asset
manager, selling our London based asset management skills to
European wealth management buyers, primarily through our SICAV
product range. This range is designed to largely mirror our UK unit
trust range, for ease of fund management input, simplification
of the assessment of performance for clients and to maintain our
philosophy of scalability.
In the last four years we have been building our international team
and we have established a local presence in Germany, Holland,
Jersey and France. This involves either employing local salespeople
to sell into specific countries, such as our Munich office which targets
sales into Germany, Austria and Switzerland, or by establishing
relationships with local third party distribution partners, such as in
France, where we feel they have greater expertise than we can
provide in-house.
Annual Report & Accounts 2010 13 Jupiter Fund Management plc