He is widely touted as the UK's most successful stock market investor and fund manager, so to label any one fund manager as 'the next Anthony Bolton' could make even the greatest of risk takers cringe.
Measuring up to a man who managed to deliver a market-beating annualised return of 19.5 per cent in his Fidelity Special Situations Fund over 28 years, compared to 13.5 per cent for the FTSE All-Share Index, is no mean feat.
While investors stand to benefit most from picking the right manager early on, the restricted track record of younger fund managers makes it rather challenging to identify an up-and-coming contender to run your money for the next 20 to 30 years.
The problem is aggravated even further by the fact that fund managers often hop between jobs. In fact, according to Tim Hale, author of Smarter Investing, out of more than 300 UK unit trust funds, Mr Bolton was one of only 17 managers who managed their fund for more than 15 years.
| FULL INTERVIEW WITH ANTHONY BOLTON... |
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Andy Gadd, head of investment research at independent financial adviser (IFA) Lighthouse Group, says that when picking a fund manager he prefers 'grey hairs' - someone who has experienced both a bull and a bear market, as opposed to a rising star who still has to prove their resiliency. He points to Jamie Allsopp, manager of the New Star Hidden Value fund, and now defunct Heart of Africa fund, as a case in point. Hardly into his mid-20s, Mr Allsopp was labelled as one of the UK's hottest up-and-coming fund managers, by New Star founder, John Duffield. However, when market volatility set in, Mr Allsopp quickly "crashed and burned.”
"Mr Allsopp is a good example of why one should not buy a manager based on short-term performance, because this generally means that they have not survived more than one cycle in the market," adds Mr Gadd.
That said - who would have guessed 30 years ago that had you given £1,000 to a 29-year-old Mr Bolton, it would at the end of 2007 be worth a staggering £148,200? Conscious of all the caveats, and with the hope of not jinxing anyone, here are our top five young guns to fill Mr Bolton's shoes:
Sanjeev Shah
One of the more obvious candidates having been personally chosen by Mr Bolton as his successor on the Fidelity Special Situations Fund. A deserving heir to the Bolton success story, after joining Fidelity as a research analyst in 1996, Mr Shah worked his way up the ranks, first managing the Fidelity UK Aggressive fund and European Aggressive fund, before taking over the Fidelity Special Situations fund in January 2008.
The 38-year old shares his predecessor's contrarian approach, going against the crowd to identify unfashionable and undervalued companies - a strategy which has always been core to the Special Situations fund.
The fund's investment objective is to achieve long-term capital growth by investing in special situations stocks which are "out of favour, unloved and misvalued” by the market. Mr Shah follows an unconstrained approach to bottom-up stock picking investing in small, mid and large caps, while maintaining a high active money component within the portfolio. The question which most analysts pose, however, is whether Mr Shah can go beyond Mr Bolton's mantle and produce some original thinking.
Mr Sanjeev is however not the only 'up-and-coming' fund manager in Fidelity's UK equity suite. Noticing a dip in its UK equity funds, the company revitalised the fund range at the end of 2007 and during 2008, bringing in new managers who had previously been analysts but who were deemed experienced enough to become fund managers. Names to watch include Tom Ewing (Fidelity UK Growth Fund), Matt Siddle (Fidelity Growth and Income Fund) and Aruna Karunathilake (Fidelity UK Aggressive Fund) - all of whom have benefited from working as equity analysts at Fidelity and hands-on mentoring from Mr Bolton.
See our interview with Mr Shah:
Performance data on Fidelity Special Situations.
Rob Burnett
Mention 'Neptune' and everyone immediately thinks of Robin Geffen. While Mr Geffen has certainly proven his skill as a fund manager over the past 30 years, Mr Burnett, who joined Neptune as an investment analyst in June 2002, has quickly established himself as a force to be reckoned with.
Starting out his investment career in the equities division of Goldman Sachs, Mr Burnett only started managing funds five years ago. Despite this, the Neptune European Opportunities Fund, which he has been running since May 2005, has been one of the top performers in its sector. His fund focus holds a parallel to Mr Bolton, who managed several European mandates during his time with Fidelity.
The fund, which aims to generate capital growth by investing predominantly in a concentrated portfolio of securities selected from European markets, excluding the UK, has managed to outperform the sector and the index by around 10 per cent in the past five years.
The 31-year-old now heads up European Equities at Neptune, also taking responsibility for the asset manager's smaller European Max Alpha and European Growth Funds.
While Mr Burnett's career progression has been nothing short of impressive, many analysts believe he has benefited from Neptune's investment process. The company makes use of global sector positioning, a process driven by Mr Geffen's experience.
Meera Patel, senior analyst at Hargreaves Lansdown, agrees that Mr Burnett could fall into the 'up-and-coming' category, having built a great performance record, but questions whether he would still perform well if removed from the Neptune process and culture.
Performance data and factsheet on Neptune European Opportunities.
David Crawford
A fund manager who is increasingly registering on the radar of IFAs looking for ways of securing investment return in a volatile market, is Mr Crawford, manager of the CF Octopus Partner Fund.
Despite the market heading south at blinding speed, Mr Crawford has managed to deliver a 30 per cent return on the fund, which aims for absolute returns, during the past year. The performance is in stark contrast to the 36 per cent decline recorded by the FTSE All-Share over the same period. Is this just luck? Tim Collyer, head of investment solutions at IFA, Falcon Group doubts it. "While in reality there is no way of knowing whether this performance has been down to luck, the fact that it has bucked market movements by such a significant amount, makes it unlikely to be,” says Mr Collyer, who describes Mr Crawford as "an honest and open fund manager, happy to discuss his mistakes."
A firm believer that the most value lies in smaller companies, Mr Crawford's CF Octopus Partner fund is focused on UK companies with a market capitalisation of less than £1bn. In order to deliver its positive absolute return objective, the fund adopts a long/short investment strategy, investing into company shares deemed to be mis-priced by the stock market.
While the fund has only been up and running for a year, 33-year-old Mr Crawford has more than 10 years of investment experience. Prior to joining Octopus, he worked as at Hermes Investment Management where he co-managed a £500m portfolio which significantly outperformed the FTSE Small-Cap and Alternative Investment Market (Aim) benchmark.
Going forward, Mr Crawford's strategy is simple: "To stay short, but also be nimble on the long side." Over the next few months he plans to move net long after being net short in February. Also a staunch contrarian, Mr Crawford is looking for value in banks, life assurers, financials, oils and industrials, while steering well clear of retail, house builders, pub companies and UK support services.
Stephen Anness
Investors looking for a fund manager who, like Mr Bolton, can take a contrarian approach, run a large amount of money with a good level of consistency and apply a value discipline - need probably not look much further than Invesco Perpetual's Neil Woodford, famed for refusing to invest in the dot-com bubble. But there is another potential gem in the Invesco Perpetual stable: Step up, Stephen Anness, aged 29.
Mr Anness started out his investment career at Invesco Perpetual in July 2002 as a trainee analyst providing Mr Woodford and the rest of the UK team with equity research. He quickly found his feet, graduating to the status of fund manager in September 2004.
In 2008, Mr Anness took over the company's UK Aggressive Fund from the respected Ed Burke, who then retired from fund management. He made several changes to the portfolio when he took over and despite heading up the fund at the worst possible time for equities, Mark Dampier, head of research at Hargreaves Lansdown, believes the young Mr Anness has survived his baptism of fire.
"While his limited track record makes it a difficult call, he does have the right trading and the right group of people to learn from, and is definitely showing potential."
Mr Dampier adds that the dire state of the equity market is probably the best experience a young fund manager like Mr Anness could hope for. "He is seeing the worst possible things that can happen to equities, which is probably the best learning ground of all with regards to market and economic background.
"Fund managers who can perform in the current market have a much better chance of performing in a bull cycle, and Stephen's performance has been up there."
Performance data and factsheet on Invesco Perpetual UK Aggresive fund.
Charlie Awdry
The jury is still out on the prospects for China but if there is one fund manager in this space to keep a watch on, it is Mr Awdry, manager of the Gartmore China Opportunities Fund.
Mr Awdry joined Gartmore in September 2001, responsible for research into the emerging markets' materials sector. Two years later, he assumed the role of investment manager and began supporting the management of the China Opportunities Fund, conducting research into industrials and materials sectors for global emerging markets products.
Just prior to taking over the fund's reins from Philip Ehrmann (now with Jupiter) in June 2006, Mr Awdry spent six months working in Gartmore's Hong Kong office, focusing in particular on opportunities in the Chinese market.
His on-the-ground experience and research background seems to be bearing fruit, with the Opportunities fund ranking among the top performers in the sector.
The fund, which aims to achieve long-term return from investments in Hong Kong and the Chinese equity markets, has benefited from Mr Awdry's stock-picking abilities, surviving relatively unscathed compared with its peers.
Mr Awdry confesses that one of the biggest challenges to his job, is the political fabrication of major economic indicators such as the country's gross domestic product (GDP), but like other fund managers in this space, he relies on alternate measures such as the amount of electricity consumed in China to construct a bona fide picture of what is happening in the red dragon of the East.
Mr Dampier says that despite China being an uncertain play, and Mr Awdry's performance record short, to be able to run a fund in the emerging market space requires a lot of skill. "You need to adopt a very macro economic approach and do a lot of ground work as you are covering a very large area where things are constantly changing," he explains. "Given that Charlie has had the blacker end of a bull market and a dire bear market to contend with, he has not done too badly."
Performance data and factsheet on Gartmore China Opportunities fund.
