Money: For good returns, add some zeros

My favourite investment: top tips each month from a City expert

Nigel Sidebottom is a director at BFS Investments in Surrey, an independent group specialising in running investment trusts.

Nigel Sidebottom was born into a stockbroking family. His father was a partner in a small firm looking after private clients. "I made a conscious decision not to join him, being happy in town planning, until he told me about the difficulty his firm was having in recruiting a junior assistant," he says.

"When I found how much was being offered - more than I was getting after nine years in my own profession - I decided to change career and moved into stockbroking."

When it comes to looking after his own investments Mr Sidebottom is cautious: "I've stayed mainly with the investment trust sector. I've now spent too many years in the business to fall for any whispered stories about individual stocks. With my own money I tend to invest in a mix of very low and very high-risk investment trust shares. I buy zero-dividend preference shares, where my money is very safe, and also warrants and other highly geared funds."

One of his best decisions was buying shares in what was then known as TR Technology: "The fund was very highly geared, meaning it had a large amount of borrowings, and I felt it was undervalued. It was on a discount of around 20 per cent to net asset value. Investing in hi-tech stocks was obviously a high-risk strategy, but I felt the investment trust was very attractively priced."

Its price went on to rise 14-fold. Last year, at the end of the fund's life, investors had the chance to roll up into its successor fund, now renamed Henderson Technology, or take out their money at net asset value. "I felt my hand had played out, and sold up," says Mr Sidebottom. "But I should have moved into the new fund as it has more than doubled in price since I took my money out."

He recently bought warrants in Herald Investment Trust, a fund that invests in smaller UK technology firms. "I'm not really a technology fan. The reason I bought the warrants is that the fund is managed by Katie Potts, a former stockbroking analyst I respected. And I was right to do so as I have more than doubled the value of my investment."

As their name suggests, zero dividend preference shares pay no dividend. But they do prom-ise a fixed payout at the end of their limited shelf life. "These may not be exciting," says Mr Sidebottom, "but you get a good return net of tax. I'm a huge fan of the sector, where it's presently easy to earn over 8 per cent net a year. I'd advise anyone with surplus cash to buy them. It can be far more tax efficient than sticking the money in a bank."

Not all his investments are in trusts. "I'm married to a Croatian and I've spent a lot of money on my family's holiday home on the Istrian peninsular near Italy," he says. "It could turn into a very valuable asset. At present, foreigners aren't allowed to own property in Croatia. But in time the ownership rules could be relaxed, especially if Croatia wants to join the EU. There will probably be great demand for holiday homes then, especially from Italians. So it could be worth a lot more than it is now."

WHO'S WHO: NIGEL SIDEBOTTOM

Aged 47.

Studied business and economics at Sheffield University before going on to a master's degree in town planning.

Seven years in local authority sector as a town planner.

Joined a small firm of private-client stockbrokers (where his father worked) as a junior assistant.

After two years, he moved to Gerrard Vivian Gray, which was eventually taken over by Greig Middleton, the UK's largest private-client stockbroker.

There he began to specialise in the trust sector, setting up the firm's investment trust service, and became head of the group's asset management service.

In March this year he became a Surrey-based director of BFS Investments, with pounds 700m under management.The group specialises in split-capital investment trusts.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive / Foreign Exchange Dealer - OTE £40,000+

£16000 - £40000 per annum: Recruitment Genius: A Foreign Exchange Dealer is re...

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

Day In a Page

The long walk west: they fled war in Syria, only to get held up in Hungary – now hundreds of refugees have set off on foot for Austria

They fled war in Syria...

...only to get stuck and sidetracked in Hungary
From The Prisoner to Mad Men, elaborate title sequences are one of the keys to a great TV series

Title sequences: From The Prisoner to Mad Men

Elaborate title sequences are one of the keys to a great TV series. But why does the art form have such a chequered history?
Giorgio Armani Beauty's fabric-inspired foundations: Get back to basics this autumn

Giorgio Armani Beauty's foundations

Sumptuous fabrics meet luscious cosmetics for this elegant look
From stowaways to Operation Stack: Life in a transcontinental lorry cab

Life from the inside of a trucker's cab

From stowaways to Operation Stack, it's a challenging time to be a trucker heading to and from the Continent
Kelis interview: The songwriter and sauce-maker on cooking for Pharrell and crying over potatoes

Kelis interview

The singer and sauce-maker on cooking for Pharrell
Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea