Richard Buxton is one of the most experienced and successful fund managers in the UK. His fund is a high conviction portfolio of 35 to 40, mostly large, UK companies that he believes have strong business models, healthy balance sheets and as yet unrecognised potential. Richard uses the same strategy as in the fund he previously managed for more than a decade, Schroder UK Alpha Plus.
Previously Merian UK Alpha
Jupiter UK Alpha is a pragmatic and flexible fund, focused on investing in larger companies. Richard Buxton is one of the most experienced and highly regarded investors in the industry and has delivered outperformance with this investment strategy for many years. He is ably supported by what we consider to be one of the strongest UK equity investment teams in fund management. We think this a core UK holding, although investors should be aware that it can struggle during a falling market.
Founded in 1985, Jupiter Asset Management has grown from a specialist investment boutique to a global fund management company. It provides a range of products from bond and equity funds to multi-asset strategies for both retail and institutional clients. Jupiter is a strong proponent of active management and therefore gives its managers the freedom to run their funds their way, without having to adhere to a 'house' view. In July 2020, Jupiter completed its acquisition of Merian Global Investors.
Richard Buxton worked at Schroders on the Schroder UK Alpha Plus fund for over 10 years. Prior to that he worked at Barings and Brown Shipley, having begun his career in 1985. In June 2013 Richard joined Old Mutual Global Investors (OMGI) and became lead manager on this fund. He then was appointed as CEO of OMGI in 2015 and oversaw the creation of Merian Global Investors. Richard has now stepped back from this CEO role to focus solely on fund management. He is supported by co-managers Errol Francis and Ed Meier.
My ideal investment time horizon is forever – I like nothing better than not dealing from one month to the next and have stocks I’ve held over twelve years – though it’s always exciting finding a new idea.
Richard BuxtonFund manager
Jupiter UK Alpha fund invests solely in the UK and predominately in larger companies. 75-80% of the fund is invested in the FTSE 100, with the remaining 20-25% invested in the FTSE 250. The fund is very concentrated with just 30-40 holdings to ensure high conviction. Richard is pragmatic and the fund has no particular style bias. He will own both growth and value stocks depending on the opportunity. The fund has a low turnover with an initial 3-5 year investment time horizon.
The process is about understanding what are the key drivers of returns for individual companies. Richard and his team are particularly interested in change within companies or industries, which might present opportunities. There is also a focus on the quality of management and the governance structures which are in place to protect shareholders. The team are very active and will regularly meet management teams including non-executive directors.
ESG - Limited
Richard has a long-standing process which considers ESG factors. However, this is used mostly for information rather than to place constraints on the investable universe. Richard employs an ‘engage to improve’ philosophy, meaning if he does identify issues, he will look to talk to the management teams and get them to improve, rather than simply removing the potential opportunity from the investable universe. He makes use of the Jupiter governance and sustainability team to help with this engagement process.
Although Jupiter UK Alpha fund is concentrated with around 35 holdings, Richard is careful to ensure the portfolio is well-diversified across many different industries. Single stock risk is also carefully controlled, with position sizes generally no greater than 5%. All positions are meaningful and usually any position less than 2% will either be in the process of being built up, or sold down. There are no benchmark or tracking error constraints.
The fund is predominately invested in large caps and is therefore very liquid. The fund has historically been more volatile than many of its peers. We would generally consider Richard to be a 'risk on' manager. He has generally delivered his best performance in a rising market, but the fund has historically struggled during a recession or a wider market fall.
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