Jupiter Asset Management launches its first hedge fund

Asset management giant Jupiter has launched its first ever hedge fund as it seeks to reposition itself away from the group’s traditional retail audience.

Aimed at professional investors with a minimum investment of £500,000, the fund marks the company’s first entry into the nearly $5 trillion hedge fund market.

The fund, called GEARx, is a higher leveraged version of the £2.8bn Jupiter Merian Global Equity Absolute Return (GEAR) strategy.

GEAR is one of Jupiter’s most successful funds, returning 73.9 per cent over the last five years, compared to just a 23.1 per cent average for its sector.

The hedge fund will sit on Jupiter’s newly launched Cayman Islands-domiciled hedge fund platform, and has a typical gross leverage of up to four times, compared to two times for GEAR.

As a result, GEARx has twice the targeted maximum volatility of its counterpart, at 12 per cent, and targets an expected return of 10 per cent above cash compared to the five per cent goal of GEAR.

Jupiter repositions

As a giant of the asset management industry that has been bleeding money from withdrawals in recent years, Jupiter has been rapidly attempting to reposition itself beyond its traditional retail market.

The fundhouse recently launched its first active ETF and has been shifting its business through acquisitions, as well as receiving a capital markets services licence in Singapore.

“This latest development remains consistent with our key strategic objective of growing our presence in the institutional channel,” said Jupiter CEO Matthew Beesley.

“Investors across the board are becoming more sophisticated, so everything we do is designed with institutional quality in mind.”

Last year, star fund manager Ben Whitmore made a shock exit from Jupiter, where he handled around a fifth of the firm’s assets.

News of his exit sent Jupiter’s shares down nearly 15 per cent in a single day, and the fund house has continued to struggle with a mass exodus of investors.