Bolton, with his value/contrarian approach, is arguably the most famous UK fund manager, having returned more than 14,000 per cent to his investors as manager of Fidelity Special Situations between 1979 and 2007.
Performance of fund since 1979
Source: FE Analytics
After passing on the portfolio to Sanjeev Shah in 2008, Bolton (pictured) has had a less successful time running the Fidelity China Special Situations Investment Trust and will be retiring in April.
Despite his difficult time in the Far East, the vast majority of experts still regard him as one of the managerial greats.Simon Evan-Cook, senior investment manager at Premier, believes that FE Alpha Manager Alex Wright – who took over Fidelity Special Sits from Sanjeev Shah last month – could also be viewed, like Bolton, as one of the best ever fund manager in 20 years’ time.
“He is potentially the Anthony Bolton of the future,” he said.
“We own his small cap fund and have done for a couple of years now. There is nothing to suggest that he couldn’t be the next Anthony Bolton, he is a top class manager.”
Although Wright is still under the age of 40, he has already built up a decent track record of consistent outperformance.
He launched the now soft-closed five crown-rated Fidelity UK Smaller Companies fund in February 2008. It is the best-performing portfolio in the IMA UK Smaller Companies sector since then and the second best performer in the whole IMA universe, with returns of 252.02 per cent.
Performance of fund vs sector and index since Feb 2008
Source: FE Analytics
That outperformance hasn’t been down to one or two good years, either. Fidelity UK Smaller Companies has beaten the sector and its benchmark in every calendar year since its launch.
Due to his performance and disciplined value strategy, Wright (pictured) was seen as the best choice to take over from Shah as manager of the Fidelity Special Values Investment Trust, which is more of a multi-cap portfolio, in September 2012.
He hasn’t disappointed there either, with the trust posting 90 per cent returns over that time – three times more than the FTSE All Share.
Wright now faces a much larger challenge than he has had in the past, as Fidelity Special Situations is the group’s flagship portfolio. At £2.9bn, it is also much larger than the funds he has previously managed.
However, Bolton rates his successor very highly and thinks he has the determination and the ability to keep Special Sits at the top of the performance tables.
"I think he's got all the credentials," said Bolton.
"I always thought Sanjeev was one of the best fund managers I've worked with and I was disappointed when I heard that he was leaving, but in Alex we've got a very good replacement."
"He's a small cap specialist first and foremost and has done an excellent job, but he's taken over the Fidelity Special Values trust which has more of a large cap focus and has done well so far. He's a real company fanatic."
"Like me, he has a natural small and mid cap bias, but I had to look more and more at large caps as [Fidelity Special Situations] got bigger and it’s a similar story with him now," he added.
Evan-Cook says he will be keeping Wright’s now soft-closed Fidelity UK Smaller Companies fund instead of buying into his new Special Situations one.
While many fund-pickers would probably want to sell out of his small cap fund because it is soft-closed and move into Special Sits as it is a much bigger portfolio, both in size and stature, Evan-Cook is sticking with Wright’s original fund.
"We are holding on to the small cap fund and though the fact he is now running a much bigger fund would normally be a distraction for us, I have spoken to him quite a bit in the past and his intensity and focus on stockpicking are so great that it doesn’t concern me," he said.
"He has a good deputy on that fund and Alex strikes me as the type of person who goes home in the evening and thinks about this sort of thing, goes home at the weekend and thinks about it and thinks about it on the way to work on the Monday."
One of the major reasons why Evan-Cook isn’t using Fidelity Special Sits in his portfolio is because he already has the UK value strategy well covered through FE Alpha Manager John Wood’s JOHCM UK Opportunities fund and FE Alpha Manager Henry Dixon’s FP Matterley Undervalued Assets fund.
Evan-Cook is also a big proponent of the belief that size will ultimately hinder a fund’s performance, and at close to £3bn, he thinks Fidelity Special Situations is already quite large.
"I spoke to him about whether he was concerned that Anthony Bolton had overseen the revolution by taking on a small fund and making it big through a brilliant track record and the fact that he was getting a big fund to begin with."
"To be honest, he will struggle to do as well as Bolton did because it is now bigger, you just can’t do it."
While it is still very early days, Fidelity Special Situations has slightly underperformed against the IMA UK All Companies sector and the FTSE All Share since Wright took over at the start of the year.
However, Wright did protect his investors’ capital more effectively than the sector and the index in the January sell-off.
Performance of fund vs sector in 2014
Source: FE Analytics
Wright also recently told FE Trustnet that he has no plans to change the fund and was buying up large amounts of banking shares in the portfolio, which was the same strategy as his predecessor, Sanjeev Shah.
Despite his initial concerns, Evan-Cook isn’t writing off using Fidelity Special Situations in the future.
At the moment, however, he is sticking with the small cap fund as he says it is testament to Wright’s focus and ability.
"I’m happy with the small cap fund as he has quite a soft spot for them in his heart," he added.
New investors can’t gain access to Wright’s UK Smaller Companies fund, but for anyone hoping to follow Wright to the Special Situations fund, it has an ongoing charges figure (OCF) of 1.69 per cent and requires a minimum investment of £1,000.
