Former manager of the sector-topping EdenTree UK Equity Growth fund Andrew Jackson (pictured) is set to take over George Godber and Georgina Hamilton’s Miton UK Value Opportunities fund and will join the firm on 27 June, it was announced today. 
FE Alpha Manager Godber and Hamilton are leaving Miton to join the team at Polar Capital after more than two years at the helm of the Miton UK Value Opps fund, which has comfortably doubled the performance of its sector average since launch.
The fund has proven to be immensely popular among investors, with the fund attracting the fourth-largest amount of money over the last year out of the 106 funds in the IA UK All Companies sector.
Soon-to-be manager Jackson managed the EdenTree UK Equity Growth fund (formerly Ecclesiastical UK Equity Growth) from November 2003 to July last year and, over this time frame, it provided a total return of 263.71 per cent, outperforming its benchmark and sector by 112.23 and 110.39 percentage points respectively.
Performance of fund vs sector and tenure under Jackson
Source: FE Analytics
His performance was also consistent, having delivered an above-average total return on an annualised basis during eight out of the last 10 years of his tenure (which is as far back as our data stretches).
What is particularly notable about his annualised performance is how he has fared during bear markets, having delivered top-quartile numbers during 2008 and 2011.
“Andrew has all of the strengths for the role, including a record of impressive returns over an extended period,” Gervais Williams, managing director of Miton, said.
“He is very well suited to taking a leadership role on the CF Miton UK Value Opportunities fund, given the fund already has a history of delivering attractive returns, with stock weightings that are largely independent of the mainstream indices.”
“At Miton we have a history of recruiting fund managers who can excel within our genuinely active investing culture.”
During his time at EdenTree, Jackson adopted a multi-cap, benchmark-agnostic approach which led to a top-decile alpha generation – which measures the fund’s performance in addition to its benchmark – over his tenure.
While the manager’s track record is arguably good news for those who hold Miton UK Value Opportunities, which also adopts a benchmark-agnostic approach, one factor that should be considered is that Jackson’s former fund had a growth rather than a value bias.
Godber and Hamilton are renowned for their distinctive investing style, which involves holding between 50 and 60 names which are chosen using bottom-up stock selection. The managers also choose stocks with a long-term time horizon of at least 18 months and, generally speaking, the managers will have a maximum 3 per cent weighting in each holding.
These choices are narrowed down from the duo’s initial selection of 440 companies, all of which are chosen for their profit and loss (P&L) statements, the strength of their balance sheets and the level of value they offer versus their market peers.
“The mandate is a little different from [Jackson’s] previous fund because of its clear value style, so investors who particularly want that approach might still be inclined to follow George Godber and Georgina Hamilton to Polar Capital or look at alternative UK value funds such as Henry Dixon’s Man GLG Undervalued Assets fund,” Tilney Bestinvest’s Jason Hollands said.
Gavin Haynes, managing director of Whitechurch Securities, says the firm currently holds the fund and will continue to do so before meeting with the fund’s new manager at the earliest possible opportunity.
Like Hollands though, he points out that his new fund has a very different mandate compared to EdenTree UK Equity Growth.
“The clue is in the name of the fund, it very much has a value focus and that is what investors bought into it for. The style that George and Georgina incorporated was very distinctive and based on individual stock selection, so it will be interesting to meet up with [Jackson] and see how he plans to manage the fund and how the style will differ,” he explained.
“We’re looking to see whether he will manage the fund in the same way as the EdenTree fund, if so that would be quite a change of style.”
That said, the managing director points out that Jackson has a demonstrable track record in the UK retail space which spans over a significant time period.
Hargreaves Lansdown’s Laith Khalaf agrees that the manager’s performance track record is encouraging, but says that the main challenge Miton will face will be that many investors bought into Miton UK Value Opps for George Godber and Georgina Hamilton themselves and that the fund could experience outflows.
“It will be a case of convincing [investors] to continue holding the fund despite the change,” he said.
“It’s a good fund. The two managers were building up a very good track record but that’s their track record which they’re obviously taking to Polar [Capital].”
“I guess it depends what Miton are going to ask [Jackson] to do and whether it’s going to shift the emphasis of the fund. Whenever you get a new manager in, there is going to be a change in style so investors need to assess this and whether the fund will still be appropriate for them.”
Hollands added: “The uphill challenge for Miton is that Andrew is not a well-known manager and as we know, many investors like to follow a name – let’s not forget that Invesco’s Mark Barnett had a superb track record but still had to endure huge outflows when Neil Woodford left the firm.”
“We don’t hold the fund but I do think this hire means Miton deserve a fair hearing.”
The overall consensus from the investment professionals we spoke to is generally positive due to Jackson’s consistent performance track record as well as the fact he has been able to successfully navigate down markets in the past.
“I think it’s a good move for Miton and a good move for Andrew Jackson,” Chase de Vere’s Patrick Connolly said.
“The previous managers did incredibly well both there and in their previous roles at Matterley so it’s a tough challenge to find somebody to come in with the right pedigree to replace them.”
“Potentially Andrew Jackson is very good person to do that and from our perspective, we see this as a positive move for the firm and for Andrew Jackson as well.”
