Jupiter’s strategic bond manager Ariel Bezalel is the fund house’s new superstar, after breaking the global funds market as his colleagues disappoint back home.
Investment Adviser spoke to the firm’s chief executive Maarten Slendebroek this morning following the publication of its first interim results under his leadership.
The results showed international sales are now Jupiter’s key driver of growth, while giving little mention of the Mayfair-based company’s performance in its traditional UK market.
“[The first half] was pedestrian in the UK. It was positive in the UK but a little bit below my expectations,” Mr Slendebroek said.
“Our UK business is a little bit more mature and with a mature business you expect a few redemptions. I would hope to do a little better on a net basis than we did.”
But the big focus was the business’s international foray, which is being conducted via the launchpad of its Luxembourg-based Sicav fund umbrella.
“We’ve been busy implementing our growth strategy in the first half of 2014 and that’s going well. Our international expansion is starting to pay off,” Mr Slendebroek said.
His global growth plans are founded on a strategy of extending the relationships Jupiter enjoys in the UK with existing clients with international buying power.
“It’s about capturing a bigger share of their business,” said Mr Slendebroek.
The group has been approaching these clients with one fund in particular, Mr Bezalel’s Luxembourg-based Dynamic Bond fund - the offshore version of his UK-based Strategic Bond fund.
“When you approach these clients you don’t show up with 10 new things you show up with one. The Dynamic Bond fund is selling very well,” he said.
Key breakthroughs for the fund have come in areas such as Switzerland and Singapore.
Part of the reason Dynamic Bond has been snapped up overseas is that many of Jupiter’s global competitors in the strategic bond fund space have been forced to shut their doors to new investments due to capacity constraints.
But Mr Bezalel’s performance has also been spectacular and the UK-based fund has gained 84.9 per cent since launch compared to a benchmark return of 52.9 per cent, according to FE.
Economics graduate Mr Bezalel represents a departure from the thoroughbred Jupiter model in other ways. He was educated at Middlesex University, which stands out in a firm that is dominated by Oxbridge graduates.
He has also embraced sophisticated and modern investments in the fund. Last December the group wrote to shareholders to ask permission to widen the fund’s ability to invest in securities such as derivatives.
Mr Bezalel joined Jupiter in 1997 and bided his time for 11 years before becoming launch manager for the firm’s Strategic Bond fund in June 2008.
Uptake of the fund was modest at first as Jupiter's old guard of famous fund managers, who had participated in the management buyout of the firm from Commerzbank in 2007, dominated the headlines and the marketing budgets.
But today the stakes of those fund managers - Philip Gibbs, Tony Nutt and John Chatfeild-Roberts in particular - in Jupiter have fallen significantly as their post-MBO lock-in schemes have matured and as the group partially floated on the stockmarket in 2010.
Mr Gibbs and Mr Nutt have now retired and Jupiter’s emblematic former leader, chief executive Edward Bonham Carter, stepped down in March 2014 to hand over to a recent hire for the firm, ex-BlackRock global sales rainmaker Maarten Slendebroek.
Mr Slendebroek said the group’s global assault would revolve around ‘outcome oriented’ strategies, which are increasingly overtaking benchmark-relative investment funds as the top sellers around the world.
These include the types of strategic bond fund run by Mr Bezalel, which are able to allocate money strategically across the fixed income universe in order to find good returns.
The chief executive pointed to the Luxembourg-based Strategic Total Return fund run by Miles Geldard, another recent arrival at Jupiter who joined in 2010, as one product that could follow on from Mr Bezalel’s success.
He also highlighted Jupiter’s new long/short investing expert James Clunie, hired last year to target positive returns regardless of market performance.
“He is already building a track record of doing what the fund says on the tin,” he said.
The group has also been building a new sales strategy of employing ‘product specialists’, investment experts who have sufficient knowledge and involvement with the management of funds to represent the lead fund manager at client meetings.
This should prevent its next generation of star fund managers from being distracted from their day-to-day fund management duties by duties such as international trips, he added.
