Jonathan Davis pens an interesting profile of superstar fund manager Anthony Bolton in the new Spectator. Bolton has managed the UK Special Situations fund for 27 years and will be retiring next year:
Over those 27 years since starting his Special Situations fund for Fidelity, Bolton has become the Harry Potter of the investment world, conjuring up and sustaining a miraculous compound return of 20 per cent per annum for his fund. Thanks to the magic of compounding (once described by Einstein as the eighth wonder of the world), this is enough to have turned every £1,000 invested at launch into £130,000 today.
No other British professional fund manager has sustained such an exceptional rate of return for so long; indeed, nobody else in his chosen sphere of operations comes close. The margin by which Bolton has outperformed the FTSE All-Share index of London stocks is barely 1 per cent less than that by which Warren Buffett, the so-called Sage of Omaha who is usually held to be the planet’s smartest stock-market investor, has beaten the equivalent US market index over his 50-year career.
I'll resist the temptation to call Bolton the "Warren Buffett of Britain" -- unlike business reporters forever in search of a journalistic hook who dubbed Prem Watsa the "Warren Buffett of Canada" some years ago.
Anyway, back to the piece. I'm not overly familiar with Bolton. But value-oriented investors will recognize this trait:
Bolton’s success has come instead the old-fashioned way, by picking stocks on a contrarian basis with the help of reams of detailed financial analysis, a nose for hidden value and an acute sense of timing. Bolton’s best results have come from picking shares that nobody else wants to buy, buying them on the cheap and flogging them back to other investors when they come round to his way of thinking. He is particularly good at anticipating what the investment herd will want to own 12 to 18 months ahead.
This is a neat article and I encourage you to read it in full. It's noteworthy that Bolton is quoted as saying that if he started out today, he'd want to run a global fund and not one focusing on special situations in the UK.
Remember than Buffett did it for 50 years, Bolton only for 27 years. Big difference.
"Nobody else in his chosen sphere of operations comes close". Wait a minute, there are some guys that have done significantly better then the 20% of Bolton. Joel Greenblatt for example has done close to 40% since the end of the 80's.
Posted by: Steve | July 31, 2006 at 12:20 PM
Steve,
Well, 27 years may not be 50, but still a good stretch of time.
And I guess you're right some have a better record than Bolton, though his track record is more than worthy of respect. Not to mention one I wish I had! ;-)
Posted by: John | July 31, 2006 at 11:40 PM