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Bolton replacement unveiled

By Michael Clarke
Updated: 07:16 EDT, 25 September 2008

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Fund giant Fidelity has finally named a replacement for legendary investor Anthony Bolton.

Sanjeev Shah will be the next manager of its £3.2bn Special Situations fund and the £400m Fidelity Special Values investment trust, which are currently run by Anthony Bolton.

Thirty six-year-old Shah, who runs the offshore Fidelity Funds European Aggressive Fund, will take over management at the start of next year.

Bolton, one of the UK's top fund managers, has run Special Situations since 1979. Over that time, it has been the UK's top performing fund, delivering an average return of 20% a year.

Financial advisers, however, have been unhappy with the way Bolton's replacement has been handled and the splitting of the £6.5bn Special Situations fund last year.

The uncertainty over the latest appointment has led to money drifting out of Bolton's fund, but has also deterred investors from putting new money in.

Bolton was today reassuring investors. 'Having worked closely with Sanjeev for many years, I have no hesitation in recommending him to be only the second manager of Fidelity Special Situations in 27 years,' he said.

All the latest news and advice on Fidelity Special Situations and Anthony Bolton

'I believe that he has what it takes to sustain the success for the many thousands of investors who have supported me in the past.'

Bolton added that he had 'two or three' managers on his replacement shortlist, but chose Shah because he believes his investment style closely matched his own.

Shah describes his investment style as being contrarian, buying into companies when others are selling, and looks for valuation anomalies. He said he will be focusing on turnaround and recovery companies, businesses with unrecognised growth opportunities and 'hidden jewels' that have been largely ignored by the market.

When asked about how investors will react to his appointment, Shah said: 'I have been a fund manager for 11 years and I have a strong track record. The style I have may go out of fashion from time to time, but I very much believe in my style and I believe I can produce decent returns over the long-term.'

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But Shah could take over the fund at a difficult time as Bolton re-iterated his belief that we are coming to the end of the bull market. He said: 'I'm finding it difficult to find lots of value ideas. Investors are not differentiating between higher and lower risk investments – low quality companies are being given the same valuations as high quality companies. The conditions are there for problems.'

Philippa Gee, investments director with Torquil Clark, welcomed the appointment, but warned that Shah had to perform to stop investors taking their money out of the fund. She said: 'The pressure is on and with fund supermarkets it is now so easy, cheap and quick to switch money from one fund to another, that investors have no encouragement to give long term loyalty to a fund and the only way Fidelity and Sanjeev can combat that is to provide the returns that investors have come to expect.'

Bolton will take on a new 'full-time role' with Fidelity, working on investment and product strategy and will be 'mentoring' younger fund managers.

About Sanjeev Shah

Sanjeev Shah Fidelity Special Situations

Sanjeev Shah has worked at Fidelity for 11 years, having joined the company as a research analyst in 1996. He was previously in educating, taking an MBA from INSEAD and an MA in Economics from Cambridge University. Shah, 36, has been a portfolio manager since August 2002.

Between October 2002 and August 2005, Sanjeev ran the Fidelity Investment Funds UK Aggressive Fund. During this period he delivered 77.77% compared with a benchmark return of 49.73%, according to Fidelity.

Since August 2005, he has run the Fidelity Funds European Aggressive Fund. He will hand over this fund to Mario Frontini on 1 June 2007 to concentrate on the transition to Fidelity Special Situations.

• This is Money reader offer: 'Investing with Anthony Bolton (2nd edition)' for just £10.00 (inc. UK P&P). RRP: £12.99

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