Adam Darling from Jupiter AM is our Fund Manager of the Month
15 OCT, 2025
By Joanna Piwko from RankiaPro Europe
Adam Darling is an Investment Manager in Jupiter’s Fixed Income team. Before joining Jupiter, he worked at Barclays, focusing on natural resource investments. Prior to this, he held roles at Société Générale and Morgan Stanley. He began his investment career in 2000. Adam has a degree in modern history.
Why and how did you decide to go into the financial sector, did you have any other vocation?
I studied history at university and did not really have any preconceptions about what career path I might follow. I considered a few options, such as journalism and law, but a banking internship in my penultimate year of study convinced me that I would enjoy finance, in terms of the skillset required and the intellectual challenge of investment. Over time, I was fortunate to have the opportunity to work in different areas of finance (including investment banking, project finance and private equity) until I found my favourite niche in fund management.
What is your view of the current macroeconomic environment and how might it affect markets? How does uncertainty affect global high yield bonds?
One key failing of the efficient market hypothesis, from my perspective, is that it suggests that the current performance of financial assets tells us about the future of the economy. To me, markets instead reflect the prevailing sentiment of millions of human investors – as a species, we are prone to getting too exuberant and then too despondent, and market valuation follows this cycle.
Currently, global investors are very bullish, and this is reflected in high equity valuations and tight credit spreads. In terms of high yield, credit markets have absorbed much of the earlier tariff and policy uncertainty, with spreads tightening quickly from the wides seen in April, post Liberation Day. On a historical basis, the market today looks very expensive. This does not necessarily mean we will see a sell off in the near term, but it reduces the margin of safety in valuations against the many potential threats to the global economy. There are signs of falling economic growth and weakening labour markets globally, including in the US, which has carried global growth since Covid. Governments are struggling with funding their deficits in a world of higher interest rates, leading to concerns around fiscal stability in many countries. The Trump administration’s tariff policy is destabilising long established trade relationships and traditional political alliances.
Technicals in high yield have been supportive, helped by muted new issuance and a rebound in flows, but these conditions are unpredictable and could turn quickly if investor sentiment changes. With spreads already tight and geopolitical tensions and policy uncertainty still elevated, a more cautious stance is warranted in portfolio construction. That does not mean we are bearish on the asset class, particularly on a relative basis against equities. The high-income yield and shorter duration of high yield versus equities offers good carry with lower volatility. History shows that when investors get more bearish and credit spreads do widen, high yield has tended to outperform equities (often significantly). Nonetheless, with valuations far from generous, judicious credit selection and risk awareness is of paramount importance.
How should investors orient their portfolios in this environment? What are the biggest risks facing investors?
Investors may benefit from taking a more cautious stance in portfolio construction. With valuations very stretched, investors very complacent and spreads reflecting a very benign outlook of an unknowable future, the key risk is disappointment from weaker economic data or renewed political shocks, which could trigger a spread sell-off. Technicals remain unpredictable and can shift quickly.
In this context, it is imperative to focus on credit analysis: know what you own, and avoid companies that have weak balance sheets, poor governance and/or cyclical sector exposures that could be vulnerable to slowing economic growth. Maintaining good liquidity is also important to take advantage of potential market dislocation: in a high yield portfolio, keeping some cash has great option value, providing both a risk hedge and dry powder to take advantage of sell-offs and dispersion in the market.
There are still compelling opportunities where company-specific catalysts can drive improving credit profiles, but more cyclical, highly leveraged issuers look vulnerable. A more defensive sector tilt, combined with a patient and prudent approach, is appropriate in the current environment.
What differentiates the Jupiter Global High Yield Bond from others and what advantages can it bring to an investor’s portfolio in the current scenario?
The Fund offers a high conviction, active approach to the high yield asset class. With a typical portfolio of c150 companies, we are distilling the global high yield market down to the very best risk/return credit ideas that we can identify. We offer genuine independence of thought, as Jupiter does not impose a top down “house view”, leaving fund managers with the freedom to reflect their market views in the portfolios. Although we are benchmark aware, we have the conviction and independence of action to take contrarian positions when we consider them merited. The Fund also benefits from the strength of Jupiter’s highly regarded Credit Analyst Team, whose depth of experience and rigorous, collaborative approach form a powerful foundation for idea generation and analysis. The combination of independent fund manager conviction and the strength of analyst insight has been central to delivering the Fund’s strong returns since inception. Portfolio construction is deliberately idiosyncratic, focused on uncovering the most compelling opportunities while avoiding areas of the market we consider expensive. In today’s environment of uncertainty and tight spreads, this balance of conviction, discipline and research strength, together with a cautious stance that preserves resilience while still capturing attractive opportunities, offers a compelling proposition for investors.
Can you give us an example of a position that you have held for a long time in your portfolios and why? How would you describe Jupiter’s investment philosophy?
The high yield market is relatively short duration, meaning that the average bond matures within five to six years. Companies also do not always remain in the high yield bond market – they may be upgraded to investment grade, acquired, or move into the loan market. As a result, there is natural turnover in the market which limits how long we can hold any single position. We are also highly focused on valuation, which means we may be compelled to sell positions that become too expensive on a credit spread basis, even if we like the underlying company. With those caveats in mind, there are companies that we have owned for many years. As an example, we have held multiple bonds of a company called Energo Pro – this is a utility and power generation company operating across many different countries. We like its stable cash flows, its unique mix of assets (including renewable energy) and the strong performance of its management team, which has grown the company in a very responsible way.
Jupiter’s philosophy is built around three core principles: being active – using duration and credit exposure as levers to generate returns without being tied to a benchmark; being pragmatic – dynamically adapting the portfolio as conditions evolve rather than sticking to a fixed bias; and being risk-aware – with capital preservation, drawdown mitigation and liquidity always front of mind. As mentioned above, fund manager independence is an important part of this philosophy, giving managers the freedom to act decisively on their analysis and remain disciplined in pursuing long-term outcomes.
What macroeconomic data are most important to monitor in order to manage investments? What do you consider most important when including a company in your portfolio?
As mentioned previously, high yield portfolio construction combines a comprehensive “top down” macroeconomic view with a highly company specific “bottom up” credit analysis. The macro view involves assessing broad economic and market drivers such as fiscal policy, central bank actions, market technicals, economic growth and geopolitical factors. The output of this assessment drives broad risk appetite in the Fund and helps to identify specific areas of the high yield market which could offer alpha opportunities (e.g. particular sectors or geographies), all in the context of prevailing credit spreads. To me, high yield is a value-driven asset class – the upside is always mathematically limited by the finite nature of bond cash flows, and so you ideally want to be buying at cheap credit spreads that give you the optimal compensation for potential downside risks. Assessing whether the spread is “cheap” is a key value judgement based on our assessment of broad macro risk and the particular credit profile of each individual company
What ratios does a company have to meet to be part of your portfolio?
The reality is that target ratios may differ based on many factors, such as the sector in which a company operates, the stage of its business cycle, or the presence of potential catalysts that could affect the credit profile (such as M&A or the launch of a new product or service). That said, the ideal company offers a combination of a strong product mix, good governance and supportive shareholders, a responsibly structured balance sheet and the ability to generate cash flows which reliably cover its interest costs. Typical ratios that we would look at include free cash flow to net debt and EBITDA to interest.
How is Jupiter’s selection process structured?
The investment process is designed to be holistic and repeatable. The Fund Manager begins with a global macroeconomic assessment that informs top-down positioning across duration, sector and regional allocations. This is complemented by a bottom-up credit screening process to find the most attractive segments of the market based on spreads, yields and underlying fundamentals. Potential issuers then undergo detailed fundamental credit analysis, including modelling of financials, assessment of business risk, cash flows, liquidity, covenants and ESG considerations. Ideas are challenged and debated with the portfolio manager and across the team, with fortnightly credit meetings providing a formal forum for analysis alongside ongoing daily discussion at the desk. Positions are continually monitored. Importantly, we maintain a clear sell discipline — exiting when macro conditions, credit risk, or valuations move sufficiently away from our thesis that the position is no longer fairly compensated for the level of risk. This structured framework ensures the Fund remains appropriately positioned through different market cycles, with credit selection and risk management at its core.
