Farewell to the Harry Potter of stock-picking

Twenty-seven years ago, a shy 29-year-old engineering graduate from Cambridge University left his job as a trainee fund manager at an obscure South African investment company in London. In a move that some of his colleagues regarded as foolhardy, he had accepted an offer to join a little-known private American firm that had never sold an investment fund over here before, but thought that Britain under Margaret Thatcher — who had been elected just a few months earlier — might be a good place to try to break into the European investment market.

At the time few people had any idea that this seemingly intemperate career move would help change the face of the funds business in Britain and launch Anthony Bolton, the unassuming individual in question, into arguably the most successful professional stock-market investment career that this country has yet produced. 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.

Allied to the formidable marketing clout of Fidelity, a privately owned Boston firm that ranks as the largest retail fund business in the United States, the innocuous-sounding UK Special Situations fund that Bolton runs has helped propel his employers from nowhere in 1979 to the number one position in the retail funds market today.