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Faith falters in Fidelity By Jeff Salway
When Fidelity picked Jorma Korhonen to take on half of Anthony Bolton's Special Situations fund last year, advisers and investors were stunned. The little-known Finn was not the name they expected to be taking on the legendary So when the group prepared to announce Bolton's successor for the flagship £3.2 billion UK Special Situations fund, investors and advisers got twitchy. But the appointment of Sanjeev Shah, recommended by Bolton himself, was greeted with relief and the consensus is that he's the best man for the job. Shah's management of Fidelity's UK Aggressive fund, where 89% growth in three years was well above the average aggressive fund, shows he's got some good form. However, in August 2005 Shah took over the European Aggressive fund and has lagged the average performance of his rivals, placing a question mark against his overall record. While no one can be expected to live up to Bolton, is Shah the best man to take the fund forward? Dan Kemp, head of research at Williams de Broe, isn't convinced. "His overall record is patchy as he underperformed with the European fund. When he ran the UK Aggressive he did very well, but he can't play the small and mid caps theme in a large fund." Shah was a wise choice from the Fidelity perspective, as his UK Aggressive record is sufficient to stop investors selling out of the fund. "But running a large fund is very different to running a small one," warns Kemp. "We're staying on the sidelines until he proves himself." Kemp adds that special situations is a particularly competitive sector, and recommends the Artemis and Investec vehicles as strong alternatives to Fidelity's post-Bolton model.
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