Alexander Darwall will be replaced as lead manager of the Morningstar Gold-rated Jupiter European and Jupiter European Growth funds by Columbia Threadneedle’s Mark Nichols later in 2019.
Nichols, hitherto a manager on the Bronze-rated Threadneedle European Select fund, joins Jupiter’s European Growth team as fund manager and will take over on the two mandates after “a suitable transition period” before the end of the year, the company announced.
Darwall, who is currently head of Jupiter’s European Growth strategy, will then step back from the pair of funds in order to focus on his responsibilities for the Gold-rated Jupiter European Opportunities Trust (JEO) and his long-standing segregated institutional mandates.
Stephen Pearson, chief investment officer at Jupiter, says the move is part of a succession plan developed over some time that should “ensure continuity of process and a smooth transition for clients in this important franchise”.
“In Mark, we have identified a bottom-up stock-picking investor with experience across the market capitalisation range in Europe and a conviction-based approach to portfolio construction,” Pearson adds.
Nichols has big boots to fill, with Darwall having run the £5.3 billion Jupiter European fund for 18 years and the £2.4 billion Jupiter European Growth fund for 12 years. In that time, he’s well outperformed the benchmark European index and thrashed the returns generated by a top-performing tracker fund.
But Pearson believes Nichols will be able to sustain this strong record of returns and is “confident he will fit the culture of active management at Jupiter”.
On his move, Darwall says: “I am fully committed to delivering the best possible investment outcomes for these continuing clients in the years to come. I look forward to welcoming Mark to Jupiter and feel confident he will be a strong addition to the investment team.”
Nichols, who began his career in 2001 within the European equities team at Invesco, had been co-manager on the Threadneedle fund since 2016 having joined the firm from BMO Global Asset Management, where he was lead manager of its F&C European Growth & Income fund.
The Morningstar Analyst View
Both the Jupiter European and European Growth funds are “stand-out [choices] for European equities managed by an experienced and talented fund manager”, Morningstar analyst Samuel Meakin says.
All funds in the suite are managed using the same approach, look for the same types of companies and have a high level of commonality. “The stability and consistency of management and investment approach are undoubted contributing factors to the funds’ success,” he adds.
The strategy is unconstrained and allows the team to find the best opportunities across the continent and is high-conviction, built through thorough, bottom-up fundamental analysis.
The Threadneedle European Select fund, which Nichols managed alongside David Dudding, also has a strong track record, says analyst Mathieu Caquineau. His Bronze Rating is mainly predicated on the view that “Dudding is a proven manager who has put a distinctive investment strategy to good use”.
Dudding has been managing the strategy since 2008 and has been a stable figure in the team. However, Caquineau cautioned in mid-2018 that the team has suffered from many depatures since 2010.
He also said that he would rather Dudding and Nichols were only managing this one fund, rather than a suite of others with limited overlap.
That said, Caquineau adds: “Dudding’s investment philosophy has stayed the same throughout his time managing money for both small- and large-cap strategies.
"He targets firms exhibiting pricing power and high barriers to entry. The approach leads to a concentrated portfolio of sturdy-growth companies such as L’Oreal and Unilever. Portfolio construction is bottom-up with large latitude to deviate from the index.
“His style worked against him in 2013 as investors shunned quality-growth and even more adversely in 2016. But the fund manager has otherwise demonstrated an ability to outperform in the long run with less volatility and better capital protection when times are tough.”
