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Watts and Williamson leave Jupiter to focus on Chrysalis Investments

27 November 2023

They will continue to manage the investment company, which opted to cut ties with Jupiter Asset Management.

By Jean-Baptiste Andrieux,

Reporter, Trustnet

Richard Watts and Nick Williamson are leaving Jupiter Asset Management to focus on the management of investment company Chrysalis Investments, after the trust’s board opted to cut ties with Jupiter Asset Management from 1 April 2024.

As part of the agreement, Jupiter has consented to release the managers of their employment contracts and restrictions from 31 March 2024. Their existing team will join either immediately or after the expiration of their notice periods with Jupiter.

In an announcement, the board of Chrysalis explained that the decision to severe ties with Jupiter is due to “outstanding issues” that needed to be resolved and which could affect the potential development of the investment company.

Those issues are primarily linked to the provision of sufficient dedicated resources for the management team as well as the reduction of various Jupiter-managed holdings in Chrysalis.  

In addition, Jupiter has agreed to cut management fee from 50 basis points (bps) to 15bps, backdated from 1 October 2023. Chrysalis’ board expects this reduction of fees to enable shareholders to save approximately £1.4m over the six-month period to 31 March 2024.

The board has also announced that it has entered an agreement in principle for a new investment adviser and G10 Capital Limited to take over alternative investment fund manager (AIFM) services for the company.

The future company’s investment advisory fee will be comprised of 50bps of net asset value per annum as well as an additional AIFM fee of 5bps up to the first £1bn of net asset value per annum.

Chrysalis’s board explained: “The latter will fund both the significantly enhanced risk process that is anticipated to be established in cooperation with the managers and the oversight of G10 Capital Limited.”

As for the performance fee arrangements for the new investment adviser, they will be subject to shareholder approval at a meeting that will take place after the next annual general meeting.

Performance of trust under Watts and Williamson’s tenure vs sector

Source: FE Analytics

Since the appointment of Watts and Williamson in November 2018, the trust’s share price performance has been negative, while the net asset value per share has fallen from its peak.

Yet, the board said that recent events are pointing to “a more optimistic outlook” as yields are generally softening and company-specific news is providing a more upbeat prognosis.

Watts’s departure from Jupiter also means he will step down from the Jupiter UK Mid Cap fund. Co-manager James Gilbert and Tim Service from Jupiter UK Specialist Equity will take over the management of the fund with immediate effect. Watts had been managing the fund since December 2008 and was holding a 5.5% position in Chrysalis as of the 31st of October 2023.

Performance of fund under Watts’s tenure vs sector and benchmark

Source: FE Analytics

Although Watts has underperformed his benchmark under his tenure, his fund still sits the first quartile of the IA UK All Companies sector over the period.

A spokesperson for Jupiter said that the focus now is to ensure a “seamless transition” for clients of the UK Mid Cap fund, highlighting that Gilbert and Service have more than 20 years’ experience investing in the UK small- and mid-cap space.

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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.