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Dennehy has doubts over Fidelity’s choice

IFA Brian Dennehy has attacked Fidelity’s decision to appoint Sanjeev Shah as Anthony Bolton’s successor on its UK special situations fund, branding the move as “Hobson’s choice”.

Dennehy, managing director of Dennehy Weller & Co, says although Shah produced strong performance on the £288m UK aggressive portfolio he ran between 2002 and 2005, the returns on the much bigger £1.9bn European aggressive portfolio he is currently running have been “mediocre at best”.

He says: “Since Shah took on the European portfolio back in October 2005, there has been very little information on what has actually gone on with the fund. One thing we do know is that it has been bottom quartile over six and 12 months.”

Dennehy also says that although Shah has delivered top-quartile performance on UK aggressive, that should be expected, given the market conditions when he ran it.

He says: “Considering he ran the fund in the midst of a bear market recovery, where small and mid-caps outperformed, advisers should have expected nothing less than top-quartile performance.

“It is an example of advisers not being critical enough. The chances of Fidelity appointing a good external manager are minimal, with Shah effectively Hobson’s choice.”

Dennehy is also concerned about Shah’s desire to run the fund, saying that in an interview in 2005, Shah said that his ideal job was running a small, unconstrained pure UK stockpicking fund. Dennehy says: “This fund is definitely not what he ideally wants. It is not a pure UK fund and he has limited experience in managing money of this size so you wonder how much freedom he will have.”

Fidelity director of corporate communications Richard Miles says: “The vast majority of feedback that we have had on Sanjeev’s appointment has been great. He has good experience of running a big fund in the shape of the European aggressive portfolio and is an ideal replacement.”

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