Jupiter European Growth

European companies with a global reach

Europe is one of the world’s key economic regions and is home to many leading global companies as well as a host of smaller and medium-sized specialists. European equities warrant their place in any well-diversified investment portfolio.
Jupiter’s European Growth fund gives investors access to a concentrated portfolio of companies with high quality characteristics having the potential to deliver returns significantly above the average growth of the market. These companies are European by heritage, but their footprint is global for the most part.
The fund is co-managed by fund managers Mark Nichols and Mark Heslop, alongside fund manager Phil Macartney and assistant fund manager Sohil Chotai with additional support from analyst Nikisha Mistry. The team is cognitively diverse and follows a disciplined and iterative investment process resulting in a constant competition for the fund’s capital. Everyone in the team is a company analyst.
European companies with a global reach
Buy companies, not countries
Whatever one’s opinion of the political and economic fortunes of Europe, it should be remembered that equity investors don’t buy countries, they buy companies, and Europe is home to many of the world’s best. The fund management team put investors’ capital to work in some of the highest-quality businesses around, capitalising on global opportunities and which are not solely reliant on domestic growth in Europe for their long-term fortunes.
Conviction matters
The European Growth team has the freedom to seek only the best quality European companies on behalf of the fund’s investors. The portfolio is therefore focused on their highest conviction ideas, resulting in a concentrated portfolio of about 35–45 companies.
The nature of competition
Understanding the nature of competition within an industry is vital to the team’s long-term approach. Industries where many businesses sell a similar product often face intense competition that results in commoditisation and anaemic long-term returns on capital. At the other extreme, industries that enjoy a natural monopoly often see their profitability determined by regulators. Somewhere in the middle, the team can identify industries that operate in quasi-oligopolies where profitability can be sustained. Businesses that can generate these sustainable and growing cashflows tend to have the opportunity to reinvest in their businesses for more growth in the future and deliver higher investment returns that are not simply competed away.
High-quality franchises with a growth focus
The European Growth team targets businesses where they have identified high barriers to entry, sustainable competitive advantages and attractive industry economics. They invest in these strong, high-quality companies, allowing the economics of the businesses to create a compounding effect over the long term. It is this long-term compounding of capital being reinvested in a business at a high rate of return that helps drive the growth in the value of a business and deliver attractive long-term growth for investors.
The team fundamentally believes that equity returns are best understood at the micro level of the individual business. The microeconomics of businesses and of industries will determine long-term investment returns, not the macroeconomics of central banks, politicians and regulators.
Finally, the presence of a strong company management team whose interests are aligned with shareholders is key. Environmental, Social and Governance (ESG) factors are built into portfolio construction at every step from before investing to regular monitoring and engagement afterwards.

Sources of sustainable competitive advantage

Sources of substainable competitive advantage
Source: Jupiter
Identifying secular growth opportunities
The European Growth team’s time-intensive process begins with identifying companies with strong business models exposed to secular growth, with sustainable returns on capital and first-class management teams. The team are seeking genuine growth companies that will be long-term winners. Identifying such businesses is much harder than it would first appear and so requires a significant amount of effort and insight. The European market is full of inefficiencies and the team’s focus on exploiting this allows them to consistently find businesses that are undervalued relative to their long term prospects, giving rising to healthy competition with those ideas that already exist in the portfolio. They are always on the hunt for these new ideas.
Europe is also home to some exceptional smaller companies
For investors operating in a low-growth world, perhaps the most attractive feature of European smaller companies is that they can offer a pure exposure to areas of secular growth. Indeed, they can often be global leaders operating in specialist niche markets. Click here to read more.
Stewardship of client capital: Environmental, Social & Governance
Capital has created wealth that a good society will wish to use wisely. As such, Environmental, Social and Governance (ESG) factors are built into portfolio construction at every step. Supported by Jupiter’s highly experienced corporate governance team, Mark Nichols, Mark Heslop and their colleagues take an active approach to ESG questions, engaging with management – often away from the limelight – on the basis that top performers always aspire to achieve even better outcomes. The European team considers ESG elements as important building blocks for long-term value creation, and won’t invest in a company until they have met with management to understand the alignment between business managers and shareholders.

Important information

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.

 

Jupiter European Growth

The fund invests in a small number of holdings and as such carries more risk than funds spread across a larger number of holdings. This fund invests mainly in shares and it is likely to experience fluctuations in price which are larger than funds that invest only in bonds and/or cash. The KIID and Prospectus are available from Jupiter on request. This fund can invest more than 35% of its value in securities issued or guaranteed by an EEA state.

Click here for important information regarding indices.

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Meet the team

Jupiter European Growth Team

Mark Nichols – Prior to joining Jupiter, Mark managed European equity portfolios at Columbia Threadneedle and before that at BMO Global Asset Management (F&C). He began his investment career in the European equities team at Invesco in 2001.

 

Mark Heslop – Mark joined Jupiter in September 2019 as a European equity manager and smaller companies specialist. Prior to joining Jupiter, Mark was an equity fund manager at Colombia Threadneedle for 11 years where he managed a global smaller companies fund and a European smaller companies fund. He began his investment career as a chemicals and industrials analyst at Citi in 1999.

 

Phil Macartney – Phil joined Jupiter in 2020 and is a fund manager in the European Equities team. Before joining Jupiter, Phil worked at Columbia Threadneedle where he worked for five years as a fund manager on the UK Equities team. He began his investment career in 2008 as a pan-European research analyst at Moore Capital LP.

 

Sohil Chotai – Sohil joined Jupiter in October 2019 as an assistant fund manager. Prior to joining Jupiter, Sohil worked in the European equity team at Columbia Threadneedle as an analyst and deputy fund manager where he worked alongside Mark Heslop and Mark Nichols on smaller company and European growth strategies. He began his career on the graduate scheme at M&G Investments.

 

Nikisha Mistry – Nikisha joined Jupiter in July 2020 as an analyst in the European equities team. Prior to joining Jupiter, Nikisha began her career at Merian Global Investors, as an equities analyst on the European ex-UK smaller companies strategy. She has a degree in Economics and Management from Oxford University.