The Jupiter European fund – managed since October 2019 by Mark Nichols and Mark Heslop – might pick its stocks from continental and UK businesses, but it’s firmly focused on global players that are dominant in their respective markets.
That’s resulted in a 2020 return of 12 per cent, despite the unprecedented financial shocks that COVID has dealt markets, especially in the early spring.
So how does Jupiter pick the winners for its £4.5bn fund?
The key, say its managers, is to focus on brand and companies with a high market share, global reach, good growth, great branding and a culture of innovation. That results in a potential pool of just 200 firms to choose from. And Jupiter, of those, holds positions in just 37.
Heslop and Nichols have rung some serious changes since taking over the fund, however. Now, there are just under ten socks remaining from before their tenure began.
What have they bought?
Key acquisitions include ASML, a Dutch company that manufactures semi-conductor systems that are essential to computer chips, Swiss vacuum valve producer VAT and software firm Ubisoft – the house behind the Assassin’s Creed franchise.
The fund is fairly evenly split across sectors, too, with industrials making up a quarter of its output, healthcare 22 per cent, and consumer goods just under a fifth.
What have they sold?
Jupiter is notable for its recent disposals as much as its new positions – it jumped out of stocks in Infineon, long-established German pharmaceutical firm Bayer and Mowi, a seafood company based in Norway.
Most significantly, however, it also sold its holdings in Wirecard, the payment processing firm based in Germany. Since Heslop and Nichols sold up, the company has gone into administration, £1.7bn was found to be missing from its accounts, and its CEO was arrested.
It was a wise move. Jupiter got rid of its holdings over several stages, at an average disposal price of €130 per share. As of December 2020, Wirecard shares are worth just half a euro.
Nichols has been reported as saying: “There were lots of questions about the quality of the company’s financial reporting. We tried to get to grips with the numbers, but couldn’t satisfy ourselves that it was a business delivering the cashflow it said it was. We, therefore, decided to get out.”