The quietly spoken Jupiter fund manager gained attention most recently for squeezing a positive return out of his flagship financials fund by going “aggressively bearish on almost everything” ahead of the credit crisis.
He previously steered his funds clear of media and telecoms stocks and into property stocks before the market crash of 2001.
They are the kind of calls which can make relative performance numbers shine for years to come, but Gibbs is careful to warn investors they should avoid taking eye-popping outperformance for granted.
“At the end of the day if you can beat the index by a reasonable margin, that’s a reasonable target.
“It would be unrealistic of investors to expect me to beat the index by the margin that I have done over the last few years,” he told reporters.
It’s the tone you might expect from someone the Daily Telegraph once described as having the demeanour of a “rather earnest vicar”, but the very latest performance numbers seem to bear him out.
Gibbs’ £1.4bn Jupiter Financial Opportunities Fund has underperformed over the 12 months to end-December, returning close to 12 percent but undershooting the peer group by some 7.6 percent, according to data from Lipper.
His success in 2008 – when he delivered seven percent returns – puts that in the shade though. Over two years the fund is outperforming by 36 percent, and by 43 percent over three years.
Since launching in 1997, the fund has delivered a startling 820 percent, outperforming its peers investing in banks and financials by more than 650 percent, Lipper data showed.
Reputation
Chartered accountant Gibbs admits those two decisions stand out as the “major right calls” of his career, cementing a reputation as one of the top UK managers alongside Fidelity figurehead Anthony Bolton.
He was long property stocks in the early part of the decade, then short the sector in 2008, and reckons the key to his success has been identifying the impact of falling and rising interest rates on markets.
“I was ahead of the curve in the early part of the decade when people were throwing out stocks despite interest rates being heavily reduced and the impact of that on property was absolutely massive,” Gibbs, previously an analyst at BZW and Laing and Cruickshank, told reporters in an interview.
Other investors soon caught up, getting overbullish when rates went back up, he said. With a lag effect kicking in and with overleverage coming into play, property markets crashed.
The 51-year old Cambridge history graduate says he focuses on finding valuations where estimates are likely to be beaten due to macro reasons.
It hasn’t been all plain sailing.
Gibbs regrets not taking a more bullish stance on emerging markets between 2003-2007 when the regions had enormous growth.
He added: “In the early part of the year, I began to realise that the markets were going to rally, but again I could have been more aggressive about that.”
New funds
Last December, in a bid to capitalise on the attention attracted by Gibbs, Jupiter launched two new funds targeting retail investors seeking access to Gibbs’ long-short strategies. The funds have raised 390 million pounds in total in just over a month of their launch.
“To be able to take short positions is a very important power to have especially in difficult market conditions,” he said.
Gibbs, a cricket fan who supports his local county team Somerset, backs himself to score with the new funds and intends to invest most of his own “spare resources,” in line with his policy on the rest of the products he manages.
Gibbs is now running a total of six funds. Some independent financial advisers, who advise retail clients, worry that running such a large range may put pressure on performance.
There is also speculation the recent hire of high-profile fund manager Guy de Blonay from Henderson as joint manager on the financial fund may mean that Gibbs will eventually hand over the reins of the flagship financials fund after serving some 12 years at Jupiter.
Gibbs said he will continue to be involved in the fund for the “foreseeable future”.
