Bolton puts off retirement to run new China fund

Veteran Fidelity guru says Western economic recovery is faltering

An economic recovery in the US and Europe that has "run out of steam" has prompted Fidelity International's Anthony Bolton, a doyen of the fund management industry for the last 25 years, to move to Hong Kong and set up a new fund that will invest in China.

Speaking from the former British colony yesterday, Mr Bolton said that "the centre of gravity is shifting to this part of the world. I want to play a bit of a part in it while I still get the chance to do it."

Fidelity conceded that many of the details of the new fund are still to be worked out, especially with regard to its size, and what sort of investments it will seek. Mr Bolton has been in Hong Kong for a number of months, but is expected to move there permanently in February next year. The fund is likely to start investing in the second quarter after Mr Bolton is approved to work in Hong Kong.

Mr Bolton stepped down from managing Fidelity's Special Situations fund in 2007, and has spent the last two years helping with the firm's marketing effort. "There were very few things that would persuade me to come back to money management, but China is the only thing," he said.

"That's why I've decided to give up sitting on the beach. This is why I've decided to delay my retirement. The economies of the Western world, particularly America, the UK, and Europe, are going to see lower growth than they saw before the financial crisis because of the cost of solving the financial crisis.

"They have, to a certain extent, mortgaged the future, so there'll be a cost that they will have to over time increase taxes or reduce spending to put their own balance sheets back in order."

Several analysts have forecast that China will eventually surpass the US as the world's biggest economy. Goldman Sachs, for example, reckons China's gross domestic product will surpass that of the US by 2027.

Mr Bolton began investing in China in 2005, but has no experience of working directly the region.

Mark Dampier, head of research at the financial adviser Hargreaves Lansdown and a friend of Mr Bolton, said the fledgling nature of the Chinese equity markets will have been a major draw.

"As a fund manager, he will be attracted by the fact that China is full of new ideas. It is back to what London was perhaps like 30 or 40 years ago," he said. "Anthony has been interested in the emerging markets for about 10 years, so he's familiar with the market already."

Mr Bolton took control of the Special Situations fund in 1979, achieving a annualised return of 19.5 per cent, according to Fidelity. The firm has had an office in Hong Kong since 1981 and a representative office in China for the last five years. Mr Bolton has given an undertaking to lead the new fund for at least two years.