Fund buyers support Fidelity turnaround plans

The experts said the hires, which all follow the appointment of Dominic Rossi as global equity chief investment officer earlier this year, represent a welcome departure from Fidelity’s usual strategy of promoting from within.

“Various funds which were taken over by new managers in recent years have not done quite so well, and Fidelity have recognised that,” said Gary Potter, co-head of multi-manager at Thames River Capital.

“I would be even more critical of them if I didn’t think a group like Fidelity - with its stature in the industry - wasn’t trying to deal with it.”

Mr Potter added the signs were “encouraging” but the “proof of the pudding will come down the line”.

Fidelity last week said it was hiring Threadneedle’s Jeremy Podger to take over its bottom-quartile £1.48bn Global Special Situations fund from Jorma Korhonen, which has underperformed over a number of years.

The group also recently hired Paras Anand, outgoing head of European equities at F&C Investments, to run Fidelity’s UK and continental European equity teams. Anand starts in early 2012.

In addition, Dan Roberts, an outperforming former manager at Gartmore and Aviva, joined the group in November from Eden Financial to manage a forthcoming global equity income fund. Former New Star co-head of institutional investment Richard Lewis joined to manage the global emerging market and global equity portfolio management teams.

Meera Patel, senior analyst at Hargreaves Lansdown, said: “Bringing in the new managers is a step in the right direction and it is good that they are trying to turn it around.”

Mark Waters, investment manager at Skerritts Wealth Management, said: “It is an interesting development as usually the company promotes people from within.

“They normally develop analysts into fund managers but that has not [always] worked recently.”

Scott Spencer, multi-manager at Aberdeen Asset Management, added: “It is always interesting to see companies hiring and I think there will be more to come at Fidelity.”

Ryan Hughes, a multi-manager at Skandia Investment Group, said Mr Rossi was “making his mark”.

“He has taken time to look at what the group has in terms of the range and managers and has seen opportunities to bring in some well-regarded managers from elsewhere,” he said. “Where it goes from here will be interesting.”

Mr Rossi is a former Gartmore chief investment officer who previously worked at Threadneedle.

Speaking to Investment Adviser last week following the appointment of Mr Podger, he said he worries “about performance every single day”.

“I think it’s understood that we were not satisfied with the performance of the Global Special Situations fund. It was important to bring in an individual with a 20 year track record who knows understands what global investing is about,” he said.