Fidelity splits funds

24-08-2006

Fidelity International has confirmed that it is planning to divide the UK's most successful investment fund over the last 25 years into two separate funds.

In addition, Anthony Bolton, long regarded as the most talented fund manager in the City, has announced that he will step down from day-to-day duties at the beginning of next year.

The investment firm is writing to shareholders to urge them to approve plans to split its Fidelity special situations fund, which has a total value of £6 billion.

Under the proposals, one fund would remain focused on UK brief while the second would pursue a mandate of global investment.

The newly created Fidelity global special situations fund will invest in under-valued companies around the world.

If the scheme finds favour with shareholders then Fidelity hopes to divide the two funds by September of this year.

When Mr Bolton does step down from daily management of the fund, Jorma Korhonen, a global equities manager who has been investing with Fidelity for ten years, will assume his responsibilities.

Mr Bolton explained that the decision to split the fund was down to its own success, with it in danger of becoming too big for its own good. The fund's self-imposed 20 per cent limit on overseas exposure had also become a constraining factor in recent years.

He said: "The world has changed immensely since I launched special situations in 1979. Investment is now a global business and information on international companies flows freely.

"Indeed, few industries are genuinely domestic nowadays: many companies derive much of their revenues overseas, compete with international rivals and supply customers around the world," Mr Bolton added.

Meanwhile, his successor Mr Korhonen revealed that he was "excited" at the prospect of "scouring the world for the best investment opportunities, looking for companies in recovery mode, companies whose market value is below the replacement cost of their assets and companies with unrecognised growth businesses".


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