Jupiter Fund Management PLC (LON:JUP) shares are under pressure after revealing one of its top fund managers was leaving the company to set up their own business.
Alexander Darwall, who manages the Jupiter European Opportunities investment trust, plans to launch a fund called Devon Equity Management in London.
He is still awaiting approval from the Financial Conduct Authority to start the business and has agreed not to compete with Jupiter’s open-ended funds for two years.
READ: Jupiter nabs new finance chief from rival Schroders
“Jupiter would like to emphasise that clients' best interests remain the key consideration in this process,” Jupiter said in a statement.
“In the meantime, Alexander is fully committed to delivering consistent performance and ensuring a smooth transition of the mutual funds.”
Jupiter considers appointing Darwall's new fund
Jupiter said it was considering appointing Devon to advise on its investment portfolio.
The asset manager announced in April that Darwall was stepping down but the reason for his departure has not been disclosed until now.
Jupiter has hired Columbia Threadneedle’s Mark Nichols to replace Darwall. He started the role on Tuesday and will be joined by his Threadneedle colleague Mark Heslop in September.
The funds Darwall manages at Jupiter have posted stellar performances. Shares in the Jupiter European Opportunities investment trust have risen 610% over 10 years, compared to a 156% return from the MSCI Europe ex-UK index.
The Jupiter European fund he has run since 2001 has gained 302% over 10 years to the end of May and the Jupiter European Growth fund he has managed since 2007 is up 281% over the last decade.
Investors should have confidence in Jupiter, says analyst
“With the board of the Jupiter European Opportunities IT immediately announcing their intention to re-appoint Darwall once his new firm is up and running, investors should have confidence in the continuity of the investment approach that has delivered outstanding returns during his 20-year tenure, delivering over three times the index return,” said AJ Bell investment director Russ Mould.
“With Jupiter announcing that Darwall has agreed to not launch a competing open-ended fund for two years, it seems that investors only opportunity to continue to access Darwall’s quality growth investment approach will be through the investment trust which may well create strong demand for it in the coming months.”
In mid-morning trading, shares in Jupiter fell 6.9% to 401p.