NRI Shah succeeds UK investor Bolton

Legendary investor Anthony Bolton, who helped turn the fortunes of Fidelity International, has passed the bastion of Britain's largest money manager into the hands of an Indian origin fund manager Sanjeev Shah.

Fidelity has said that Shah, who has been with Fidelity since 1996, would take over the management of UK Special Situations Fund at the start of 2008, after co-managing the fund with Bolton through 2007.

Shah, 36, who currently runs Fidelity's Euro3 billion European Aggressive Fund, would be the next manager of 3.2 billion pounds special situations fund and the 400 million pounds Fidelity Special Values Investment Trust, both of which are currently run by Bolton.

This would mark the passing on of the last fund managed by Bolton to Shah and the former is moving away from the job of investing client money.

The analysts said that while no one could exactly replace Bolton, Shah was the best possible choice for the job. Shah, who was born in London and studied at University of Cambridge and Insead, has managed a return of seven per cent for his European Aggressive Fund so far in 2007, which is nearly double the broader market indices.

According to London-based fund tracking firm Financial Express, the statistical ratios achieved by Shah are remarkably similar to those achieved in the same period by Bolton with the special situations fund.

The only significant difference is in terms of ability of stock-picking, Financial Express analyst Sarah Beasley said. While both have been superior stock-pickers, Bolton's score was significantly higher than that of Shah's, she added.

The special situations and European aggressive funds have been run with very similar investment approaches, suggesting similarity between their investment style, Beasley said.

Both managers follow a value approach seeking out companies that are out of favour looking for future potential that other managers have not yet recognised, Beasley said.

They look for turnaround or recovery situations, unrecognised growth and potential buy-outs, she added.

The similarity in investment style suggests that Shah will run the special situations fund in a manner similar to Bolton, and Shah's ability to pick stocks hints that he might be as successful as Bolton.

Shah joined Fidelity in 1996 as a research analyst covering food retail, media, pharma and telecom sectors. Between 1998 and 2002, he was assistant portfolio manager to the UK Income fund managers and became manager of the Fidelity UK Aggressive Fund in 2002.

The much-awaited replacement for the legendary investor comes follows the uncertainty over the appointment leading
investors pulling out their money from Bolton's fund and also impacting the fresh inflows into the fund.

Fifty seven-year old Bolton, one of the top fund managers in the UK, is Fidelity's longest-serving manager in Europe and has run Special Situations Fund since 1979.

It has been the UK's top performing fund during this period with an average return of 20 per cent a year.

An investment of 1,000 pounds in Bolton's fund in 1979 is estimated to have grown to about 1,63,000 pounds today, shows data compiled by fund-tracking firm Morningstar Inc.

In the early 1990s, more than half of Fidelity's client investments went into funds managed by Bolton.

Bolton is expected to remain with Fidelity as a mentor and advise its young managers and on the company's investment
policies.