The ability to stay calm and not rush for the exits at the first sign of volatility, as some retail investors have done in emerging markets in recent weeks, is critical for success.– Richard Buxton, is a star fund manager – a big name; someone who can attract clients by virtue of his own brand. Neil Woodford at Invesco Perpetual, Anthony Bolton at Fidelity are other big names. They are rare, particularly in the long-only world. Mr Buxton left Schroders, 2nd biggest independent investment group with with just over £250bn in assets under management (AUM), and joined Old Mutual Global Investors, with AUM of £16bn, the UK asset management arm of Old Mutual, the international investment and banking conglomerate, last June.
Here is the achievement of Mr Buxton:
Over the past year, he has delivered 10.5 percentage points above his benchmark index, the FTSE All Share, propelling his fund into the top quartile among UK retail equity managers. But it is not just about one year’s results. He has been one of the top-performing asset managers since he first launched the alpha fund at Schroders, in July 2002, returning 12 per cent a year on average and outperforming his benchmark by an annual average of 4.4 percentage points.
Since announcing his appointment in March 2013, the Old Mutual UK Alpha Plus retail fund has grown from £160m to £1.1bn, taking about £500m from his old fund at Schroders, which was worth £3.8bn at the time.
His success may attribute to the long-term strategy such as the followings:
The ability to stay calm and not rush for the exits at the first sign of volatility, as some retail investors have done in emerging markets in recent weeks,
Buy with a certain theme in mind and stick with for the long term. He only buy about four stocks a year and then hold them for a three to five-year time horizon.
Meeting and understanding the managers of the companies he plan to buy. He spends time with management, assesses their strategy, look at their incentive arrangements and then build up a relationship with them. To him, being a good fund manager is about backing companies on a multiyear time frame and then sticking with them.
To Mr Buxton, “ The stock market is a mechanism for humility. If you think you are a star, then you fail. You are only as good as your last game and only the paranoid survive. The only thing nice, in inverted commas, about being a so-called star is that it opens doors, not just to the management of companies but to, for example, the Treasury or the Bank of England.”
Financial Times, David Oakely, 2014-02-09, “Richard Buxton: ‘I don’t see myself as star fund manager’”