Fidelity's Bolton successor shock
FIDELITY has stunned investors by unveiling an unknown member of its fund team as the first successor to Special Situations manager Anthony Bolton - one of the most high profile positions in the fund management industry.
Jorma Korhonen is a member of Fidelity's Global Funds team, where he has been managing funds for Australian and Italian investors, but is an unknown quantity within the UK.
The £6.5bn Special Situations fund will be split in September, with Bolton's half retaining a UK focus and Korhonen operating a global special situations fund. Investors' money will be split equally between the two funds.
Bolton will initially manage both halves until Korhonen officially takes over in January. Bolton will manage his half of the fund for a further year before handing over the reins to an, as yet unnamed, successor.
Investors and advisers will be surprised by the appointment as many had been expecting a big name from the fund management industry, with Fidelity's UK and European Aggressive funds manager Sanjeev Shah mooted. However, Korhonen is believed to have been a personal pick of Bolton's.
Shah may also have been held back to take over the UK half of the fund when Bolton steps down.
Bolton said: 'Given the strong flows into Special Situations over the past few years, I believe it is necessary to act now to forestall any performance issues that might arise from the Fund's rapid growth in size.
'A logical evolution is to extend the Fund's overseas exposure beyond its current 20% limit and so open up many new investment opportunities for the Fund's investors.'
Bolton added that he believed two smaller funds with distinct mandates was a better way forward than one larger fund with an 'unusual set of investment objectives'.
Finnish-born Korhonen has been with Fidelity since 1996 and has run international equity portfolios for five years. After managing Swiss, Italian, and Iberian equity funds for two years, Jorma now runs global equity funds for retails investors in Australia and Japan.
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The 40-year-old has a degree from Schiller International University and a masters from the University of Lausanne. One of his funds, Global Fund Mother, has returned nearly 50% to investors since September 2004. Another, MSCI World, has returned 36% over the same period.
Ben Yearsley, investment specialist with IFA Hargreaves Lansdown, welcomed the appointment. He said: 'Whilst his is not a name known to the UK retail fund industry, Korhonen has had 10 years at Fidelity – 4 years as a portfolio manager and 2 years experience managing a global fund, which does seem to bode well for the future.'
However, Philippa Gee, investments director with Torquil Clark, was more cautious. She said: 'I'm supporting the change, but Fidelity has handled it badly. I'm also concerned that Jorma has only managed a $200m fund before.
'However, Fidelity has a good record of bringing staff through and I'm also pleased that until January, both halves will be run by Bolton. That should give it time to settle.'
Fidelity shareholders will vote on whether to accept the change next month and will receive information packs in the next few days.
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