In our UK dynamic equity strategy we look for good businesses that we believe have been mismanaged, are underperforming financially and in need of transformation. We support new strategies for these companies, often led by a new management team, with the aim of creating better businesses and higher valuations.

We’re highly selective, however. We aim to cherry pick the best situations. We seek undervalued companies with a history of generating cash and higher returns and with hidden quality characteristics. We like companies with unique assets and pricing power.

We don’t invest in distressed companies or dying industries.

Constructive engagement

Our investment approach is one of constructive engagement. If we own the shares, we act like owners. We analyse and think deeply about our companies, we sweat the details and believe this gives us a competitive edge. It’s almost a private equity approach, and we believe it sets us apart from other value investors.

We view companies as dynamic not static. We engage with management and boards, believing that if you do your research carefully and approach a company with knowledge and thoughtfulness about topics such as capital allocation and balance sheet management you can have a meaningful dialogue. Our constructive engagement approach builds understanding and conviction, we believe.

We see markets as inefficient. If you do your work effectively you can find situations where there is a mismatch between what you understand about a company and what the market understands. This provides opportunities for us as investors to generate alpha.

Highly patient

A successful corporate turnaround typically involves stabilisation (simplification, de-risking and balance sheet management); then rebuilding (operational change, process improvement, strategic refocus); and then return to growth (stricter capital allocation, targeted reinvestment).

We are highly patient investors, willing to look through short-term uncertainties to focus on the longer-term opportunity for improved growth and returns. We recognise that successful turnarounds take time. We are willing to hold what we consider to be a “true winner’’ through recovery and into a growth phase.

At the same time, we are highly disciplined and will sell a stock where we see intractable issues such as strategy drift, unfulfilled promises, capital misallocation or valuation that’s not justifiable relative to growth and expectations.

Our UK dynamic equity strategy seeks to deliver highly idiosyncratic returns, regardless of the macroeconomic cycle. We aim to own a concentrated portfolio of stocks that blends income and capital growth characteristics. We follow a consistent and repeatable investment process as we seek to generate returns by helping to create better businesses.

Investment philosophy

Please note: From 11 October 2024, the name of the fund changed from Jupiter UK Special Situations Fund to Jupiter UK Dynamic Equity Fund. In addition, the management of the fund transferred to Alex Savvides on that date. Alex took over from  Ben Whitmore, who announced his intention to leave Jupiter this year. Alex and his team — Stephanie Geary, investment manager, and Sidharth Sukumar, investment analyst –- joined Jupiter from J O Hambro Capital Management. At J O Hambro, Alex managed the J O Hambro Capital Management UK Dynamic Fund.

Jupiter UK dynamic equity strategy risks

  • Pricing Risk – Price movements in financial assets mean the value of assets can fall as well as rise, with this risk typically amplified in more volatile market conditions.
  • Market Concentration Risk (Geographical Region/Country) – Investing in a particular country or geographic region can cause the value of this investment to rise or fall more relative to investments whose focus is spread more globally in nature.
  • Derivative risk – the strategy may use derivatives to reduce costs and/or the overall risk of the strategy (this is also known as Efficient Portfolio Management or “EPM”). Derivatives involve a level of risk, however, for EPM they should not increase the overall riskiness of the strategy.
  • Liquidity Risk (less liquid securities) – some investments may be hard to value or sell at a desired time and price. In extreme circumstances this may affect the strategy’s ability to meet redemption requests upon demand.
  • Liquidity Risk (general) – During difficult market conditions there may not be enough investors to buy and sell certain investments. This may have an impact on the value of the strategy.
  • Liquidity Risk (Unlisted) – The strategy may hold unlisted securities which can be difficult to value and negatively impact strategy liquidity.
  • Counterparty Risk – the risk of losses due to the default of a counterparty e.g. on a derivatives contract or a custodian that is safeguarding the strategy’s assets.
  • Smaller Companies – The strategy invests in smaller companies, which can be less liquid than investments in larger companies and can have fewer resources than larger companies to cope with unexpected adverse events. In less favourable market conditions these companies may therefore under-perform larger companies and the strategy may under-perform strategies that invest predominantly in larger companies

The value of active minds – independent thinking

A key feature of Jupiter’s investment approach is that we eschew the adoption of a house view, instead preferring to allow our specialist fund managers to formulate their own opinions on their asset class. As a result, it should be noted that any views expressed – including on matters relating to environmental, social and governance considerations – are those of the author(s), and may differ from views held by other Jupiter investment professionals.

Important information

This document is intended for investment professionals and is not for the use or benefit of other persons. This document is for informational purposes only and is not investment advice. Market and exchange rate movements can cause the value of an investment to fall as well as rise, and you may get back less than originally invested. The views expressed are those of the individuals mentioned at the time of writing, are not necessarily those of Jupiter as a whole, and may be subject to change. This is particularly true during periods of rapidly changing market circumstances. Every effort is made to ensure the accuracy of the information, but no assurance or warranties are given. Holding examples are for illustrative purposes only and are not a recommendation to buy or sell. Issued in the UK by Jupiter Asset Management Limited (JAM), registered address: The Zig Zag Building, 70 Victoria Street, London, SW1E 6SQ is authorised and regulated by the Financial Conduct Authority. No part of this document may be reproduced in any manner without the prior permission of JAM/JAMI.