Steve Davies

Written by Citywire

February, 2020

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Steve Davies leaves Jupiter as UK Growth fund languishes

Steve Davies is leaving Jupiter after a prolonged run of poor performance on the £958m Jupiter UK Growth fund and investment trust of the same name.

Davies, who was last week replaced as manager of the trust by Richard Buxton, will hand over the fund to Chris Smith, recruited from rival fund group BNY Mellon, in June. Jupiter said Davis was ‘leaving the company to puruse other opportunities’.

Davies had been under pressure to improve performance on both the fund and trust, which are both languishing towards the bottom of their sectors over the last five years.

The fund has lost 5.7% over the last five years and is kept off the bottom of the Investment Association’s UK All Companies sector only by the L&G UK Alpha Trust, down 13.3%. The FTSE All-Share has risen 26.9% over the same period.

Shares in the trust have risen 3.9% over five years, the worst performance in the Association of Investment Companies’ UK All Companies sector.

In October the board of the trust said it was looking for ‘alternative arrangements‘ but Jupiter was able to keep hold of the mandate by parachuting in Richard Buxton just days after the fund manager joined as part of the acquisition of Merian Global Investors.

Davies was caught out badly by the Brexit vote, with his fund diving 11.1% on the day of the referendum result as his heavy holdings in banks were hammered.

His positioning in companies generating their revenues from the UK domestic economy was a weight on returns, but the manager was also hit by major stock-specific issues.

Davies was hit by the collapse into administration of Thomas Cook last year and the crash in the shares of Sirius Minerals (SXX), a major position, after the company failed to secure government backing for a potash mine under the North York Moors.

Investors in the fund will be hoping for an improvement in its fortunes under new manager Smith, who has managed the £320m BNY Mellon UK Opportunities and £782m BNY Mellon UK Equity funds alongside Simon Nichols since November 2017.

Since taking on the UK Opportunities fund, Smith has returned 10.6%, more than double the FTSE All-Share’s 4.4%.

‘Chris’s proven track record in a period of considerable uncertainty for the UK economy sets him apart as a real rising star,’ said Jupiter chief investment officer Stephen Pearson.

‘We are confident that Chris’s distinct investment style will enable the fund to focus on its growth objective while allowing a smooth transition for investors.’

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