Michael Spencer throws £10,000 gauntlet at Terry Smith
Challenge: Michael Spencer with his wife Sarah
A new rivalry erupts between two of the city's most formidable money men – Michael Spencer, 68, and Terry Smith, 70 – who have been harassing each other for decades.
Billionaire businessman and philanthropist Lord Spencer has thrown down the gauntlet with a £10,000 bet that a fund manager he backs can beat Smith.
Spencer offers Smith to bet that the fledgling Nutshell Growth Fund will outperform Fundsmith's Equity Fund next year. His challenge has more than a touch of David and Goliath.
Nutshell Asset Management was founded in 2019. The growth fund, led by Mark Ellis, launched the following year and had just under £21m of investor funds under its management by September.
Spencer is a minority investor in Nutshell's operating company and a major investor in the fund.
Ellis uses a mix of human brainpower and AI to calibrate his portfolio. His fund has recently acquired a new major institutional client, which will bring its assets under management to around £33m.
Fundsmith, founded by Smith (pictured below) in 2010, had £23 billion in assets in its share fund in November after becoming hugely popular with investors.
Spencer headed broker ICAP for many years while boxing enthusiast Smith was at the helm of Tullett Prebon.
If he is victorious this time, Spencer has pledged to donate his winnings to a charity supported by The Mail on Sunday before Christmas 2024.
In the blue corner, Smith's long-term performances were excellent. But in 2022 – a bad year for the markets – the economy fell by 13.8 percent.
Nutshell did not escape widespread trouble in the red corner last year. In 2022, it fell just over 19 percent, lagging Fundsmith.
This year, however, Nutshell is up almost 19 percent, ahead of Fundsmith's 8.5 percent rise.
Spencer said: 'We have clashed a bit at times, but Terry has done a really good job at Fundsmith over the years and deserves all the credit.'
Smit declined to comment.