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Fidelity special sits succession

Chris Salih focuses on some of the main funds competing in the special sits sector and examines how their managers are rated by investment advisers.

Artemis UK special situations

Fund manager: Derek Stuart
Fund size: £1.04bn
Three-year performance: 72.4 per cent
Three-year rank: 71/253

Stuart has run the fund from launch in March 2000 and it has grown into one of the bigger funds in the UK all companies universe. It has outperformed its peer group over one, three and five years. Although it has broken through the £1bn barrier, Stuart believes his multi-cap approach means it still has plenty of scope for growth. Bestinvest head of communications Justin Modray rates Stuart as an “excellent stockpicker”.

Rensburg UK select growth

Fund manager: Mark Hall
Fund size: £632m
Three-year performance: 91.9 per cent
Three-year rank: 21/253

Hall has run the fund since its launch in September 2001. Over five years, the fund has returned more than double its peer group and the FTSE All Share index. Like most of the list, it is run using a multi-cap approach and is Leeds-based Rensburg’s biggest retail fund.

Hargreaves Lansdown head of research Mark Dampier says Hall is the man he backs as the best alternative to Bolton.

He says: “Hall’s performance record in the past few years is second to no one. Like Anthony Bolton, he has added annualised growth in the region of 20 per cent for the past few years, making him a very able candidate.”

F&C special situations

Fund manager: Luke Newman
Fund size: £63m
Three-year performance:
N/A
Three-year rank: N/A

This fund has a track record of just 18 months, having been launched in December 2005. It has got off to a cracking start, returning 18.2 per cent over 12 months compared with the sector average of 13.5 per cent.

Newman runs it as a high-conviction portfolio with 42 holdings. He says: “In my view, special situations encompasses a much wider breadth of opportunity. I have targeted young companies in immature industries with the ability to exploit their niches and identified opportunities in more established companies with exceptional track records of value creation on the proviso that they pass my strict valuation criteria.”

Jupiter undervalued assets

Fund manager: Edward Bonham Carter
Fund size: £291m
Three-year performance: 68.3 per cent
Three-year rank: 88/253

Dennehy Weller & Co managing director Brian Dennehy says Jupiter joint chief executive Bonham Carter’s bottom-up contrarian approach delivers consistent returns. Bonham Carter has reaffirmed his commitment to running the fund following the management buyout in March.

Dennehy says: “He is a good manager in a stable position at a stable fund firm, something that is not as easy to come by as people think.”

Axa Framlington UK select opportunities

Fund manager: Nigel Thomas
Fund size: £1.48bn
Three-year performance: 77.8 per cent
Three-year rank: 46/253

One of the more experienced managers in the list, Thomas is approaching a five-year track record on the fund, having joined from ABN Amro in 2002. Investing across market caps, his track record is consistently above average and, like Bolton, he often runs with small overseas weightings, currently holding 0.5 per cent in Asia-Pacific and 0.8 per cent in North America.

Modray says Thomas is another “superlative stockpicker” and the fund size has not hit performance.

Investec special situations

Fund manager: Alistair Mundy
Fund size: £165m
Three-year performance: 64.1 per cent
Three-year rank: 127/253

Mundy falls under the contrarian banner by focusing on companies that are out of favour and trading on fairly low multiples. He adopts a multi-cap approach and has a large weighting in mega-caps.

According to Bestinvest, this style tends to lead to less volatile returns.

The fund recently changed its name from Investec value to position itself better in the market.

M&G recovery

Fund manager:
Tom Dobell
Fund size: £2.5bn
Three-year performance: 83 per cent
Three-year rank: 32/253

M&G recovery is the biggest fund in the list with a track record dating back to 1969. It is top quartile over almost all measurable periods. Dobell currently favours resources (23.3 per cent) and non-cyclical consumer goods (16.7).

Merrill Lynch UK special situations

Fund manager: Richard Plackett
Fund size: £666m
Three-year track record: 93.8 per cent
Three-year rank: 19/253

Since taking the reins three years ago, Plackett has been on the short lists of a number of advisers. Running a concentrated portfolio, Plackett has a smaller companies’ background which is reflec-ted in his portfolio.

Chelsea Financial Services managing director Darius McDermott says: “He is one of those good managers who has slipped under the radar somewhat. He runs a strong, consistent UK special situations portfolio that typically beats the benchmark.”

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