Jupiter financials star puts half his fund in cash

British fund firm Jupiter's high-profile investor in financial stocks, Philip Gibbs, has put more than half his fund into cash as uncertainty around the UK election and western government debt hamper visibility.

Gibbs, who made his name when a heavy cash position helped his financials fund turn a profit during the credit crisis, had 52 percent of the portfolio in cash as of end-February against 13 percent at the end of 2009, a factsheet showed.

Top holdings in the 1.2 billion pound ($1.79 billion) fund were HSBC , DnB Nor , Sun Hung Kai Properties <0016.HK> and Bank of China <601988.SS>.

The latest Financial Opportunities fund factsheet indicated Gibbs had sold down heavily his stake in Barclays . The UK bank was in fourth spot with 5.8 percent of his portfolio at end-2009, but does not feature in the top 10 holdings at the end of February.

The move mirrors that of GLG fund manager John White, who told the Reuters European Funds Summit last week he had sold his entire Barclays' stake on valuation grounds.

Gibbs also offloaded much of his stake in Prudential

in the first two months of the year. News of the British insurer's transformational deal to buy AIG's Asian business AIA began to emerge on February 27, sending the shares slumping from above 600 pence to as little as 475 pence.

A spokeswoman for Jupiter declined to give any updates on Gibbs' portfolio since the end of February.

In the factsheet, published for investors in recent days, Gibbs said he continued to believe financial stocks were inexpensive compared to long term price-to-book averages or to government bonds and cash.

But he said high debt levels and artificially low interest rates had hurt sentiment.

One can understand the suspicion suggested by the low valuations of equities and financial stocks in particular.

In terms of strategy, we are cautious about the UK government's debt position running into the election and this is reflected in our portfolio, he said.

The Financial Opportunities fund was up 24 percent in the 12 months to end-February but heavily underperformed both its FTSE Financial benchmark and rival funds in the sector, data from Lipper showed.

His performance during the credit crisis makes longer-term gains shine, and the fund outperforms peers by 43.2 percentage points on a three-year view.

In an interview with Reuters earlier this year, Gibbs cautioned investors they should not expect him to continue delivering the kind of stellar returns which thrust the quietly-spoken manager into the spotlight.

($1=.6690 Pound)

(Reporting by Joel Dimmock; editing by Simon Jessop)