Manager Research

Following our latest review of the Jupiter Merian World Equity Fund and the rand-denominated Old Mutual Global Equity Fund, we have maintained a Tier 2 rating for the former and downgraded the latter to Tier 3.

Jupiter Merian World Equity Fund
From a business and shareholder perspective, we note the history of corporate restructuring and team changes, both within the Jupiter and the prior Merian business. Jupiter acquired Merian in 2019 and has since acted as a supportive shareholder. While we previously questioned their ability to retain key decision-makers through large-scale change, recent steps to improve culture and remuneration are encouraging. That said, Jupiter continues to face net outflows from its assets under management (AUM), and its history of corporate actions introduces uncertainty around the firm’s long-term direction. The Systematic Equity team (ex-Merian team) remains core to the overall Jupiter in terms of AUM and investment capabilities. However, the potential for further corporate action, and the disruption this can present for investment teams, remains a key concern in the rating view.

We continue to view the team as high calibre, with a deep talent base and a strong research culture. Despite some turnover, the team has maintained continuity and capability. We are monitoring recent changes to their incentive structure and how these may affect retention and long-term performance, especially for senior investment team members.

The fund’s investment process is based on buying growth securities at reasonable valuations. Valuation is a key input, and the process is implemented through a quantitative framework that has evolved over its 20-year track record without compromising integrity. The strategy is managed relative to the benchmark, with strong controls around deviations, and aims to deliver positive risk-adjusted returns over time—something it has achieved historically.

The Jupiter Merian World Equity Fund has delivered returns above passive benchmarks since 2008, with a compelling hit rate. We believe the team construct, core investment process, and research-driven approach provide enough evidence that they can replicate this success. However, concerns over the future direction of the broader Jupiter business and how this links to senior leadership incentivisation factor into our retention of the Tier 2 rating on the fund.

Old Mutual Global Equity Fund
The Old Mutual Global Equity Fund mirrors the Jupiter Merian strategy. However, it carries a fee of 1.55%, which we believe undermines its value proposition. Despite a strong performance cycle, the high fee erodes nearly all the fund’s excess return over a passive alternative. As a result, we have assigned it a Tier 3 rating.