Fidelity has appointed Alex Wright manager of its flagship Special Situations Fund, taking over from Shah who has run the fund since 2008.
In January Shah will pass the fund to Wright and then take around six months off, he said. The plan is to then return to Fidelity on a part-time basis in order to mentor and teach fund managers and senior analysts in the company’s academy.
“I recognise this is a role which requires 110% effort, focus and intensity,” Shah said. “I made a personal decision that I am not prepared to give that level of focus going forward,” he added.
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Following in the footsteps of fund management great Anthony Bolton, Wright has a proven ability to consistently outperform his peer group and is a named alpha manager by FE Analytics.
Meanwhile, Shah is said to have overall performed better than his peer group composite, with stockpicking making a contribution to his results.
The graph below shows Wright and Shah’s performance against their relevant peer group composites and against each other over the past five years.
Wright has been with Fidelity for 12 years and began to manage client assets in 2008, with the launch of the Fidelity UK Smaller Companies Fund. In 2010 he started to work more closely with Shah on special situations mandates and in 2012 took over from Shah on the Fidelity Special Valuesinvestment trust.
Impressive results
So far, his record has been admirable, with his smaller companies fund ranked first over one, three and five years, according to FE Analytics.
Since taking over Fidelity Special Values he has delivered a return of 46.3% versus 21.6% from the FTSE All Share (Nav return to 31 July).
Shah has been with Fidelity for 17 years and took over the UK portion of Fidelity Special Situations when it was split in two following Anthony Bolton’s decision to step down from active fund management. (A decision which was subsequently reversed with the launch of the Fidelity China Special Situations investment trust.)
During his tenure, Shah has delivered first quartile performance over five years, second quartile over three and first quartile over one year.
Shah’s conviction rewarded
Hargreaves Lansdown’s Mark Dampier, said: “Sanjeev Shah remains at the helm of the fund for the time being and the transition to Alex Wright looks to be well organised. Wright follows the same contrarian/value approach the fund is known for, which ensures a good degree of consistency.
“We will meet with Wright again to discuss and evaluate his ability to perform the new role. In the meantime, we believe investors willing to take a long-term view and ride of periods of stock market volatility should stick with the Fidelity Special Situations Fund,” he added.
Dampier also praised Shah for sticking by his guns during periods of criticism when he used share price falls to top up his favoured holdings in unloved areas of the market.
“This approach was vindicated and the fund recovered and has performed strongly since,” he concluded.
