Experts react to Jupiter’s Philip Gibbs retirement

Fund brokers have voiced disappointment at the recent returns of Jupiter’s star ‘top-down’ fund manager Philip Gibbs, who is retiring next year.

Mr Gibbs is set to retire in October 2014 and is handing his Jupiter Absolute Return fund to James Clunie from September 1 this year, ahead of the move, as revealed by Investment Adviser earlier today.

Expectations were high for Mr Gibbs’s performance on the Absolute Return fund when he launched it in 2009. On his previous fund, Jupiter Financial Opportunities, he delivered a 792 per cent gain in the 13-year term to 2010, thanks to several well-timed ‘top-down’ market calls.

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In the credit crunch market meltdown of 2008 Mr Gibbs famously threw roughly 80 per cent of the Financial Opportunities fund into cash to protect investors from the breaking crisis, as other fund managers took a massive hit to performance.

However, since it launched the Absolute Return fund has gained just 1.75 per cent after Mr Gibbs retained an extremely low net market exposure in the view that the environment was excessively risky.

Mark Dampier, head of research at Hargreaves Lansdown, said the performance of the Absolute Return fund was “the most disappointed I’ve ever been with a fund”.

He said he felt the manager had been “too cautious” and allowed his bearish views to dominate and wipe out any performance.

“All those times he could have made money with the ammunition he had. He could have done really well but he was caught in the headlights thinking that the world was going to collapse,” Mr Dampier said.

Darius McDermott, managing director of Chelsea Financial, said Mr Gibbs’s long-term track record was “excellent” but also voiced disappointment with the Absolute Return fund’s returns.

“It hasn’t lost investors money but neither has it made any over its three and a half years,” Mr McDermott said.

He added: “The news that James Clunie will be taking over the Absolute Return fund comes as no surprise. In my view he is the industry guru in shorting and has a fantastic track record running absolute return strategies.”

Hargreaves Lansdown senior investment manager Adrian Lowcock added that the retirement “gives Jupiter an opportunity to wipe the slate clean and start fresh with the Jupiter Absolute Return fund”.

“We see the appointment of James Clunie as a positive move. James is an experienced manager and has a proven track record in managing absolute return strategies and he has delivered some strong performance whilst at Scottish Widows Investment Partnership (Swip).”

“This also provides Jupiter with a good opportunity to review the fee structure of the fund with a view to removing the performance fee.”