Jupiter has announced it will not make any new investments into unlisted assets through any of their open-ended funds going forward.
The decision was made after the asset manager liquidated the entirety of its exposure to Starling Bank, the majority of which was held in Jupiter’s UK Mid Cap fund and across a small number of funds. The position will be acquired by existing shareholders in the company in the coming weeks.
Jupiter managers reiterated their “strong ongoing conviction” in Starling as “profitable and fast-growing UK bank” but decided “to redeploy capital in the best interests of clients”.
Investor sentiment toward owning the asset class in open-ended funds has deteriorated since the Woodford fiasco of 2019, when weightings to unlisted and hard-to-trade holdings were an obstacle to meeting redemptions.
The current total of unlisted holdings in the Jupiter UK Mid Cap fund is “well below” the Financial Conduct Authority (FCA)’s permitted 10% threshold. However, the “sustained market volatility” of recent years convinced Jupiter to make the change, explained Matt Beesley, chief executive of Jupiter, in a letter to clients.
“The decision is consistent with client feedback, and aligns with my overall ambition of simplifying Jupiter and taking decisive action to ensure our offering best reflects the needs of our clients,” he said.
The market welcomed the decision.
Sheridan Admans, head of fund selection at TILLIT: “This is a positive move for investors, although it has been far too long coming.
“Investors have been left in the dark worrying if their money is at risk of going the same way as it did for investors in Woodford.
“There is no place for unquoted stocks in an open-ended fund. Investing in private and unlisted illiquid assets is best left in the hands of the experts in a specific closed-ended fund.”