Jorma Korhonen: The 'unknown' Finn with the Special Situation of replacing Anthony Bolton

A day in the life of the Fund manager, Fidelity Global Special Situations
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It's an early start for Jorma Korhonen, the Finnish fund manager catapulted from obscurity earlier this summer when Fidelity Investments announced he was to replace their star investment guru, Anthony Bolton.

In January, Mr Bolton will step down from running half of Fidelity's Special Situations fund, the vehicle he has managed with stellar results since 1979. Special Situations, now worth £6.5bn, will be carved up - Mr Bolton will continue to run a UK Special Situations fund, while Mr Korhonen, with £3.25bn to play with, will manage a new vehicle, Fidelity Global Special Situations, which is to be launched on Monday. The investments of each of the 250,000 Special Situations investors are being split equally between the two funds this weekend.

Mr Korhonen, who currently runs Fidelity's Global Equity Fund, a much smaller vehicle for Japanese and Australian investors, likes to be up in time to check the progress of stock markets in the Far East, and to brief the investment company's traders in Hong Kong and Tokyo on whether his portfolio needs adjusting.

One advantage to the early start is that Mr Korhonen, 40 this year, knows calls from journalists are unlikely at this hour. Since his announcement was made public, he has been at the centre of a media blitz. "It's been a bit strange," he says. "I was forewarned about the attention, but I've certainly never experienced anything like it."

Not all the coverage has been positive. After Mr Bolton announced his intention to split Special Situations last year, a series of better-known Fidelity fund managers was tipped for the job. Mr Korhonen's name did not feature.

He, however, says journalists' scepticism about his ability to take on one of the highest-profile roles in UK fund management is not a concern. "It's not as if I have never run retail funds before," he remarks archly.


Nor does Mr Korhonen feel obliged to play the part of the glamorous City fund manager. Arriving at his desk with gym bag rather than a Mulberry briefcase, he doesn't bother with braces or even the ubiquitous double-cuffed shirt, though his breast pocket is monogrammed with his initials.

Before the morning's meetings begin, he has time for a more detailed study of what's happened in the Far East overnight Mr Korhonen says fund management has changed out of all recognition in the 10 years he has been working at Fidelity.

"In the mid-nineties, I was covering Italian banks that no one else analysed, which published reports only in Italian and which never visited London," he says. "But information per se is no advantage today, because everyone has access to it."

Fidelity has some experience of replacing star investment managers, having gone through a similar experience in the US in the Eighties, when Peter Lynch, renowned the world over for his stock-picking skills, stepped down from the giant Magellan fund. Times change, Mr Korhonen says.

"Peter Lynch described fund management as turning stones - the more stones you turned over, the more ideas you got," he says. "Now, it's all about how you analyse the information you have - my job is to have a big picture, a map of industries and economies, and then to focus on the right details."

Mr Korhonen has recently completed a series of nationwide roadshows designed to win the support of around 400 key intermediaries, chiefly independent financial advisers. Most have been surprisingly supportive, he says.

"I knew that no one in the UK had heard of me, but, once we got past that initial shock, we got very positive feedback," he says. So much so, that Mr Korhonen says he would be hugely surprised if investors move their money out of his fund once it is up and running, even though they will be able to switch the 50 per cent of their money transferred to him back to Mr Bolton.

"My problem is more likely to be an influx," he say. "At one roadshow, an adviser even asked if money would flow out of the UK fund to my fund- it was the first time I had seen Anthony speechless."


By mid-morning, Mr Korhonen is ready for a physical challenge. When he's in London - last year, he spent 140 working days travelling around Fidelity's global network of offices meeting analysts and companies - he takes an hour or so out to go to the gym. "Apart from the fact that my doctor recommended running, it gives me a chance to clear my head."


Back in the office, Mr Korhonen has a series of meetings lined up with UK-based analysts and companies, which will take up much of the rest of the day. As well as preparing for the new job, he has his existing fund to worry about, and he says he made it very clear to Fidelity that he would only move on from it on his own terms.

"When I was first proposed for Global Special Situations, my first reaction was to ask whether it was a practical joke," he admits. "When I realised they were serious, I was flattered, but I also had some questions - the biggest was whether the mandate would be such that I could still come into work and get fired up about what I do."

Those assurances mean Fidelity Global Special Situations under Mr Korhonen will be free to invest anywhere in the world, with no reference to asset allocation benchmarks, or indices, though the fund will predominantly invest in developed markets.

"My job, and this is how I define special situations, is to look for unrecognised value, to identify mis-valuations," he says. "If Anthony wanted to leave any sort of legacy, it would be that I should manage a portfolio without looking at benchmarks."

He concedes this means there will be times when the fund underperforms some, or all, of its rivals, as there have been under Mr Bolton. "We're in the business of taking risk in a controlled manner," he says. "The one thing I'd hope is that investors recognise that a special situations fund is at the higher end of the risk spectrum - they've always been volatile and they always will be."

Inevitably, however, the knives will be out for Mr Korhonen the second his fund slips from the top of the rankings. "The best thing that could happen is that there is another Black Monday just before I get to go shopping for stocks," he says. "Realistically, that's not going to happen, but I don't feel under pressure to perform - when returns are not so strong, I hope and expect to have the support of management here."


After a working lunch with more Fidelity staffers, Mr Korhonen is back on the meetings trail. Ahead of the fund being split, he needed to understand why every holding in the existing Special Situations fund is held - and to take his own view on the stocks. He must also consider whether holdings he backs in his current fund would make suitable acquisitions for Global Special Situations. The preliminary estimate is that 60 per cent will make the grade.

From September to December, Mr Korhonen will work alongside Mr Bolton on the new portfolio, before taking sole control in January. He has five investment themes in mind: companies in a restructuring process, industries undergoing structural change, cyclical industrial trends, companies that are valued at less than the value of their assets and companies with unrecognised growth potential.

An example of the latter, he says, is the German pharmaceutical stock Merck, which has benefited hugely from developing the technology that has become crucial in liquid crystal display televisions. The introduction of fixed-odds betting terminals in bookmakers' shops is a good instance of a structural change in industry, he adds.


Once European markets have closed, Mr Korhonen has further appointments scheduled, including a chat with Mr Bolton. He is not concerned about interference from the man dubbed the "silent assassin" by those in the City who have watched him take very public stances against companies that have dared to cross their shareholders.

"We'll have a structured mentoring process," he says. "One of the reasons why Anthony is so high-profile is that he has been doing this job well for so long - there's certainly plenty I can learn from him."


When he's in London, Mr Korhonen does his best to be home in time to help put his two children, aged five and one, to bed. Story time could be in any one of three languages. In addition to his native Finnish, Mr Korhonen has become a fluent Spanish speaker since marrying his central American wife; the kids are growing up speaking their parents' mother tongues as well as English.

Multilingual story-time out of the way, it's back to work for Mr Korhonen, who wants to monitor any late developments in the US stock markets. It's tough work stepping into the shoes of Fidelity's silent assassin.