Meet the fund manager who made a 605 per cent profit in 13 years… and if you had entrusted him with £1,000 in 1994, it would be worth almost £27,400 today

When the email came, I almost turned it down. Another press release, I thought, to add to the hundreds I receive every day.

But this one contained a somewhat cryptic message and an attachment that I desperately needed to read.

“Anthony found this the other day,” the sender said. ‘Fancy a chat with him?’ Curiosity got the better of me.

I’m glad it is. It was a copy of an investment article I had written thirty years ago when I was working for a rival newspaper (and yes, I still wore shorts!) and John Major was Prime Minister.

Last week I had that conversation with ‘Anthony’ and what a privilege it was. The man in question is Anthony Bolton, one of the best British fund managers of his generation in his heyday in the 1980s, 1990s and up to and including 2008.

He was the person who ensured that the funds he managed – Fidelity Special Situations and sister investment fund Fidelity Special Values ​​​​ – lived up to their “special” labels, delivering nice profits for those who invested for the long term.

Both funds are now led by Alex Wright and continue to make money for investors, albeit as in Anthony’s era, not always in a straight line upwards (2020’s lockdown hit both funds hard).

Anthony was loved by many long-term investors. But in City and big business circles he occasionally ruffled feathers, earning him the nickname ‘Quiet Assassin’ in 2003 when he led a successful shareholder campaign to prevent Michael Green from becoming chairman of the recently merged media group ITV.

His modus operandi as an investment manager was courageous: seeking out ‘special situations’: unloved British shares that he was convinced the stock market would at some point fall in love with again. A contrarian, a value investor.

My 1994 article was specifically about the launch of Special Values ​​– Special Situations had been founded fifteen years earlier with Anthony at the helm.

Thirty years ago I was in awe of him; he was my investment poster boy, a friend to the private investor. And his eye for an investment opportunity remained for a long time afterwards.

Over the next thirteen years, he sat in court on both special values ​​and special situations before deciding to move to Hong Kong and head an investment fund of Fidelity China Special Situations.

Although this adventure in the Far East turned out to be less special for investors, no one can dispute his investment record in Great Britain. He outsmarted the market.

During his 28-year reign at Special Situations, he delivered annualized returns of 19 percent on average, compared to 13 percent for the FTSE All-Share Index. At Special Values ​​the equivalent average returns were 16 percent and 9 percent. An advertisement for the benefits of active fund management.

When I spoke to him last week, it was as if time had stood still. It was the same Anthony Bolton before me – a little grayer perhaps (he’s now in his mid-seventies), but as articulate and razor-sharp as ever. Although he still works for Fidelity, his energy is focused on writing operas; his latest, Island of Dreams, was performed at the Grange Park Opera near Guildford in Surrey last summer.

“I found your article from 1994 in an old scrapbook,” he says. “I always only kept the important things.” Flatter.

We further talked about the birth of special values. “The idea to launch it was mine,” he says. ‘In 1994, Fidelity only managed unit trusts. We had no investment funds, which were largely the domain of Scottish investment groups.

‘I liked it (better protection for investors when share prices fall and the ability to borrow to increase equity exposure), so I put the case for launching one to my boss Barry Bateman and the green light was given . Special Values ​​were born.’

Alex Wright, who now runs Fidelity Special Situations and sister investment fund Fidelity Special Values, along with Anthony Bolton

It initially had £44 million in assets under its care. Today its capitalization is £1 billion. Someone who invested £1,000 30 years ago would have seen their investment grow to just under £27,400. Under Anthony’s thirteen-year stewardship, it returned a profit of 605 percent.

Today, Special Values ​​and the £3 billion Special Situations fund are managed by Alex Wright, born in 1979, the year Special Situations was launched.

He has managed the two since September 2012 and January 2014 respectively, assisted by Jonathan Winton. He joined our conversation. Alex says, “One of my first memories of Anthony when I joined Fidelity as a research analyst in 2001 is him agreeing to buy the uniform for the company’s football team. We called it Special Situations and played on Tuesdays for almost twenty years.”

Anthony jokes, “It was one of my best investments.”

The investment approach of the two funds has changed little over their respective lifetimes. Like Anthony did before, Alex is constantly looking to invest in undervalued UK companies, anticipating an upward revaluation down the road.

The top holdings for Special Values ​​and Special Situations include tobacco shares Imperial Brands plus banks NatWest and Standard Chartered. In contrast, Special Values’ first annual report from 1995 names advertising agency WPP, computer software Misys (now private company Finastra) and Mirror Group (now Reach) among its major holdings.

“I believe that fund managers should always remain true to their specific investment style,” says Anthony.

‘No one should be a contrarian investor one moment and a growth investor the next. Why was I contradictory? It’s because I felt more comfortable doing completely different things than the others. It’s in my nature.’

Like Anthony, Alex is a big fan of meeting with the management of companies he is interested in investing in, or companies that can provide useful information about a rival company he is holding in the funds. Two to three meetings a day are normal – a hallmark of Anthony’s investment style.

Anthony believes he had an easier time as an investment manager and says: ‘Fund management is more competitive these days. When I was in money, you could visit companies unseen by rival managers – and perhaps be the first to identify an investment gem.

‘Today there is more and more use of technology, more analysts covering shares and, of course, funds that follow the stock markets rather than trying to beat them (passive investments). Yet I still believe there is a great opportunity for contrarian investors to make money for investors.”

Alex agrees. “The consensus is that the US market is the place to be,” he says. ‘But consensus is dangerous and there is a risk that everything will change.

‘It’s interesting that when I meet people they ask me if I’m depressed because all the noise is about US stocks. My answer is an emphatic ‘No’. The two funds I manage have outperformed the FTSE All-Share Index over the past year and I will aim to keep this going.”

In 1994, Anthony told me that Special Values ​​should “provide investors with a good long-term investment story.” How right he was. Thirty years of a good long-term investment story.