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Jupiter stays small to keep on fast track

While other fund management groups are seeking to consolidate and expand, for Jupiter Unit Trust Managers small is beautiful.

Even as it celebrates its 20th birthday, the asset management firm is not seeking any rapid growth.

Instead, it is looking to build on existing areas of its business and prepare for expansion of Asian markets.

Joint chief executive Edward Bonham-Carter realises that fund management companies will always be the subject of consolidation talk.

He says: “It is inevitable. There are so many funds and so many fund groups. We like to be small and flexible. Other companies like the size and economies of scale, it just depends what is best for you.

“It is important for us to be able to move quickly. You have to differentiate yourself from the big grey mulch of fund groups.”

Bonham-Carter acknowledges that the face of distribution is about to change but he believes it is still too early to say exactly how.

Life companies are jost-ling for distribution, Fidelity is admitting it may consider white-labelling its products through banks and intermediaries are frantically questioning how they will sell products but most fund firms have refused to show their hand.

This could be down to the rise of the fund supermarket and the increasing access to investment products for the consumer.

Bonham-Carter says:”It is appealing to think that there will be this big, sweeping change, I do not think that will be the case.

“Inertia is an under-rated force. We will probably see more white-labelling, we will probably see the UK move more towards a European model with banks distributing more. In this system, people will want their advice from an IFA.It will be up to intermed-iaries to build good relationships with their clients.”

Bonham-Carter refutes claims made by M&G chief executive Gary Shaughnessy that fund management groups dumbed down the information sent out to consumers in the 1990s and he asks: “Where is the evidence?”But he agrees that fund groups and IFAs have an important role to play in consumer education and making clients understand that if they want financial products they are going to have to learn how they work.

Like most fund managers, he also agrees with the IMA’s plea for consumers to take on more responsibility.

Bonham-Carter’s own undervalued assets fund has returned 16.3 per cent for the last 12 months compared with 12.8 per cent for the FTSE All-Share index. He admits to being his own biggest critic but he is happy with the perform-ance, having set a target of 2 per cent above the FTSE All-Share.

Does he prefer fund management or being a boss?He answers: “I am schizophrenic. Running money is a very competitive game but also a serious one. These are people’s savings, money that they have earned and paid tax on. It gives me a lot of satisfaction. There is a very different satisfaction that comes from running a business, where you have to deal with personalities. It is not for me to tell which one I am better at. Perhaps, it is too early to tell.”

Jupiter, which has accumulated 11.1bn assets under management since its launch in 1985, is part of Commerzbank. It now has 28 funds, including three successful funds of funds run by John Chatfeild-Roberts. It knows it has to do better with its special situation fund and admits that investment trusts are hard to sell.

Bonham-Carter says: “We are not scared to change the manager of a fund if things are not going well but you do have to have trust in the way that a manager is doing things over the short term. It is a tricky call to make. I am pleased that we have managed to keep to our raison d’etre while being successful. It is important to realise that this is somebody’s savings that you are investing.”


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