FUND MANAGER PROFILE ANTHONY BOLTON
“
What I should
have done perhaps
was say I was going
to do it for five years
and if I didn’t like it
I could have just
disappeared off the
scene, but I didn’t
want to do it that
way. I think it is two
to three years
”
that his stated commitment
is not long enough.
“People again say that
two years is pretty short
and I want to be quite
open with people. It is a
completely new experience
for me. I might absolutely
hate it when I get
out there – I don’t think I
will because I have been
there and enjoyed it – but I
want everyone to know
where they are. What I
should have done perhaps
was say I was going to do
it for five years and if I
didn’t like it I could have
just disappeared off the
scene, but I didn’t want to
do it that way. I think it is
two to three years,” he
said.
l The value approach
Bolton is a value investor
and is heavily influenced
by research that suggests
valuation is an even bigger
driver of returns in emerging
markets than in developed
markets. He fully
expects the value approach
to work in China as well,
particularly in the medium
and small cap end of the
market, saying: “I might be
a little bit more GARPy
[growth at a reasonable
price] because if I can find
a franchise that can grow
over five to ten years then
I would pay up for that.
“That was the approach
when I was running the
European fund and investing
in Eastern Europe. I
used to try and find the
better franchises to own,
over the long term, at a
reasonable price. I think
there is a bit of similarity
with Europe when I first
got involved in the ’80s,
though Europe did have
very low valuations which
sadly China does not.”
The translation of all the
big numbers coming out of
■ Anthony Bolton’s new closed-ended fund is targeting an initial
capital-raising of £630m
■ Shares in the closed-ended company will be issued at £1
■ It will invest in a diversified portfolio consisting primarily of
securities listed in China or Hong Kong, as well as in Chinese
companies listed elsewhere
Bolton told Portfolio Adviser that the fund is likely to be less
benchmarked and more of a stockpicking proposition, but otherwise
not hugely different from the Special Situations Fund investors know
him for.
“My heart has always been in the mid and small-cap area, so I
expect it will tilt that way. One small aspect of the portfolio might be
slightly different [being a more stockpicking fund] but in terms of it
being an active fund, and the size of the company I invest in, I think it
will be similar,” he said. (See news story on page 8).
PROPOSED FUND TIMETABLE
26 Feb: Prospectus publication date; public offer opens; investors
apply for shares
5 April: Public offer closes
19 April: Admission to London Stock Exchange; dealing starts in the
new shares
FIDELITY’S HONG KONG TEAM
■ The equity team is 43 investment professionals – including the
CIO, heads of research and the director of research – with $30.2bn
assets under management, as of 31 Dec, 2009.
■ The fixed income team is eight investment professionals including
traders and research portfolio managers ($1.4bn AUM)
■ These teams also run $5.3bn AUM in multi-asset portfolios
Source: Fidelity
FIDELITY CHINA SPECIAL SITS FUND
the region is that China is a
long-term, sustainable,
investment opportunity,
and this is certainly Bolton’s
view in the context of how
it fits in with the floundering
West.
l Entering the S-curve
“I think growth in the
emerging markets is still
reasonable. Let’s take China
– it is not immune from
what is going on, particularly
with its exports, as the
West is very important
here. In terms of its exports,
we won’t see the growth
we have for the past ten
years – and there is the
shift towards the domestic
economy – but when you
look at the relative growth
rate there was a strong
flow of money last year. I
think that will go on for a
few years because of the
low growth in the West.”
In terms of the absolute
China story, he adds: “For
me it is really the medium
to long-term story of what
is going to happen. China
is the third biggest economy
in the world; it might
have overtaken Japan last
year and it may now be the
second biggest. It is the
ninth biggest stock market,
and I think in my lifetime it
will become the second
biggest stock market. There
will be a lot of IPOs and
hopefully capital appreciation.
In that time it will
stop being an emerging
country and it will be a
developed country. It has
grown at 10% compound
and in the past ten years
the incremental growth in
China’s GDP has been
equivalent to two UKs.”
One particular theme
that Bolton has picked up
on is what he describes as
the S-curve, a concept that
relates to GDP per capita
in China now and where it
34 PORTFOLIO ADVISER [www.portfolio-adviser.com] MARCH 2010
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