Gibbs (pictured) currently runs the £482m Jupiter Absolute Return fund, but made his name running Jupiter Financial Opportunities throughout the late 1990s and 2000s. It was one of the best-performing equity funds under his guidance, particularly during the doldrums of the 2008 global financial crisis.
James Clunie, formerly manager of SWIP UK Flexible Strategy, will take charge of Gibbs’ Absolute Return fund from the beginning of September this year. He joined the firm only yesterday. Gibbs will remain manager of the Jupiter Second Split Trust until he officially leaves the group in October 2014, but will no longer have a role on the Absolute Return fund.
Commenting on Gibbs’ decision and the appointment of Clunie, Edward Bonham Carter, chief executive of Jupiter, said: "Philip has delivered outstanding long-term returns to clients during his career at Jupiter and I would like to thank him for the contribution he has made to the company during this time."
"Demand for absolute return and multi-asset strategies is growing, with investors increasingly looking for strategies that can provide capital growth with lower volatility."
"We added resources in this area in 2010, appointing Miles Geldard and Lee Manzi to run multi-asset and convertible portfolios, and are pleased that James, who has developed a strong reputation for managing both long/short and long-only portfolios, has joined us to help take forward the development of our absolute return strategies."
Gibbs added: "It has been a pleasure to have served clients in my funds over the past 16 years and I am looking forward to continuing with the management of the Jupiter Second Split Investment Trust until October 2014. I wish James well in his management of the Jupiter Absolute Return fund."
Between June 1997 and December 2010, Gibbs’ Jupiter Financial Opportunities fund returned 806.38 per cent, according to FE Analytics. Over the same period, the FTSE All Share managed just 103.97 per cent.
Performance of fund vs sector and index June 1997 – Oct 2010
Source: FE Analytics
The fund uses the MSCI AC World Financials index as its benchmark, but FE only has data for this going back to 2000. Between then and October 2010, the fund managed 501.84 per cent, while the benchmark returned 55.44 per cent.
Gibbs is a top-down investor, which held the fund in very good stead during the two major crises during his reign – the dotcom bubble and the global financial crisis.
In 2008, Jupiter Financial Opps returned more than 14 per cent to investors; over the same period, the MSCI AC World Financials index fell 36.24 per cent, while the All Share fell 29.93 per cent.
FE Alpha Manager Guy de Blonay took charge of the fund in June 2010, leading it to underperformance versus its benchmark since then.
Gibbs has been less successful since taking over the Jupiter Absolute Return fund in December 2009, however. The portfolio was launched to great fanfare, but since then has disappointed, with returns of just 1.75 per cent so far. This puts it behind both its IMA Targeted Absolute Return sector average and Libor GBP 3month index benchmark.
Performance of fund vs sector and index since Dec 2009
Source: FE Analytics
He is notoriously bearish and is unconvinced by the global recovery since the crisis back in 2008. In the latest note to investors, Gibbs said: "We maintain the view that problems associated with trying to reduce the fiscal deficits in the West remain a significant market risk."
Head of multi-manager at Cazenove Robin McDonald recently pointed to the fund as a good insurance policy, but it remains to be seen whether he will be sticking with the fund in the aftermath of Gibbs’ announcement.
Clunie brings a stellar track record of his own. Under his guidance, between August 2009 and April 2013, the SWIP UK Flexible Strategy fund significantly outperformed its benchmark – also the Libor GBP 3month index – with returns of 45.3 per cent. As the graph above shows, the fund has returned considerably more than Jupiter Absolute Return since December 2009.
The fund sits in the IMA Specialist sector, but has a very similar approach to the Jupiter portfolio in that it attempts to deliver an absolute return using both long and short positions.
Darius McDermott, managing director of Chelsea Financial, is backing Clunie to improve the performance of the Jupiter Absolute Return fund and expects to upgrade it to a "buy" in the coming weeks.
"The news that James Clunie will be taking over the Absolute Return fund on 1 September comes as no surprise," he said.
"In my view, he is the industry guru in shorting and has a fantastic track record running absolute return strategies."
"We had rated the SWIP UK Flexible Strategy fund, which he ran, a 'buy' and were about to add it to our buy-list when it was announced he would be leaving SWIP and joining Jupiter."
"Pending a meeting with James, once he has settled in to his new role, the Absolute Return fund will retain its 'hold' rating. If we can be convinced that James will be able to run a larger pot of money with the same success, we will upgrade the fund to a 'buy' at that point."
Hargreaves Lansdown’s Adrian Lowcock is similarly optimistic. He adds that the appointment is a good opportunity for Jupiter to review the fund’s controversial fee structure, which comprises of an ongoing charges figure (OCF) of 1.4 per cent and a 20 per cent performance fee.
"We see the appointment of James Clunie as a positive move," he said. "James is an experienced manager and has a proven track record in managing absolute return strategies and has delivered some strong performance whilst at 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."
Jupiter Absolute Return is available for a minimum investment of £1,000.
