FTSE 100: 7471.01 ▲ 17.53 (0.24%)
The fanfare around Sir Alex Ferguson’s retirement has highlighted the long-term value gifted managers can generate, given time and opportunity to do their work.
Surprising as it may seem, perhaps, it’s the same with the fund managers looking after our pensions and ISAs.
Despite the City’s reputation for short termism there are many fund managers who have been allowed to ply their trade for decades – provided, like Fergie, they keep delivering the goods.
Today we exclusively reveal the 10 longest serving fund managers in the UK and how much money they have made for investors during their long careers. These are not necessarily the fund managers with the longest careers, but those who have run specific funds for the longest. A few of them have outlasted Fergie.
(Update: there's actually 11 as we discovered we'd left someone out and didn't have the heart to drop the bottom manager!)
Their names have been taken from Citywire’s global database of nearly 2,000 fund managers, which lies behind the A, AA and AAA ratings we give to fund managers with the best three-year performance.
If you're on the Citywire website and would like to keep up with news on the funds click on the star icon. To buy them via JP Morgan Wealthbuilder platform, click where you see the shopping trolley icon.
Andrew Green of GAM, the Swiss investment company, is the longest-serving manager running a fund accessible to UK investors.
Green has run the GAM Global Diversified fund for nearly 30 years since its launch in January 1984.
He looks for undervalued companies around the world where he thinks change may be afoot to improve a business’ fortunes.
Like Fergie, Green warns this approach can lead to spells of indifferent performance. Over the long term, however, the results are impressive. Anyone who invested with Green 29 years ago received an amazing total return of 2,869% up to the end of 2012. (A total return is what you get if you buy a fund’s accumulation unit, in which income from the fund’s investments is automatically reinvested.)
That’s nearly treble the total return of the MSCI World index.
In terms of actual money, Green would have turned £1,000 invested in the fund at launch into £36,198 today. Recent returns have been boosted by Japan’s soaring stock market, in which Green has invested heavily.
In case you think all this is a fluke, Green’s other fund, GAM UK Diversified , which he has run since 1990, has a similarly good track record, currently ranking 17 out of 180 funds in its sector with a 10-year total return of 201%.
Fergie would no doubt appreciate GAM’s philosophy of finding good fund managers and sticking with them. It is a testament to the company’s approach that it also has the second longest serving fund manager in the UK.
Like Green, Gordon Grender keeps a low profile and runs a concentrated portfolio of stocks he really believes in. His conviction-led approach and his desire to avoid losing investors’ money means he tends to run the fund with a high level of un-invested cash.
Not that this has hurt investors’ long-term returns. Since launching the GAM North American Growth fund in January 1985 Grender had delivered a 2,287% total return by the end of 2012, way ahead of the 1,029% from the S&P 500, the main US stock market index.
Updating the performance figures, we’ve calculated £1,000 invested with Grender in 1985 would be worth over £28,000 today.
Andy Brough, 52, has managed money at Schroders for as long as Fergie was in charge at Manchester United. Brough has a high profile for a fund manager, partly as a result of his 26-year career at the fund manager and for his former editorial contributions at the Sunday Times.
The institutional fund is aimed at pension funds and has a minimum investment of £100,000. A more consumer friendly retail version of the fund – Schroder UK Smaller Companies , with a lower minimum investment – was launched by Brough in 1994.
Brough specialises in investing in smaller companies outside the FTSE 100. This has traditionally been a good area for active fund managers to prove their worth. However, Brough is an example of a fund manager who at another firm could have got the chop. A long stretch of unimpressive returns put him under pressure earlier this decade. Recently, Brough has spoken of going back to basics to rediscover his old form. This has fed through to performance which has improved, gaining him a Citywire A-rating.
From launch until the end of last year, Brough’s institutional fund achieved a 939% total return, well above inflation but below the 1,055% from the Numis Smaller Companies index. £1,000 invested at launch would be worth £11,754 today.
Marlborough Fund Managers is bit like a mini GAM. Its name is misleading as its headquarters are in Bolton, Lancashire rather than Wiltshire! However, it too appoints independent fund managers to run money for its clients on a long-term basis.
Marlborough is best known for employing Giles Hargreave, the feted smaller company investor who has run the Marlborough Special Situations fund since 1998. But Hargreave has some way to go to match the 26-year tenure of Geoff Hitchin on the Marlborough Global Bond fund and his 25 years on Marlborough Global Income .
Bonds (tradable loans issued by governments and companies) are generally seen as a more defensive asset class than shares, or equities. As a result Hitchin’s long-term returns are less than you would expect to get from fund managers investing in shares.
Nevertheless, the performance of Hitchin, a former tax consultant, is impressive. Since launch in August 1987 the global bond fund has generated a total return of 590%, ahead of the 488% by its benchmark index. Over 10 years it leads 19 global bond funds with a 121% return.
£1,000 invested in the fund at the start would be worth £7,218 today.
Hitchin boasts a Citywire A-rating and at 70 has no plans to retire and still enjoys the challenge of investing.
At 68, Paul Mumford displays a Fergie-like dedication to his job. Those who know him say the Citywire A-rated fund manager starts work at 6am and doesn’t switch off when on holiday.
Mumford co-founded Cavendish Asset Management in the 1980s. He launched the Cavendish Opportunities fund in February 1988 to focus on smaller companies whose share prices were recovering from the Black Monday crash the previous October. Although the fund suffered badly in the 2008 crash, it bounced back and since launch investors have enjoyed an 832% total return, more than the 694% from the Numis Smaller Companies index.
A £1,000 investment in the fund would be worth £12,093 today.
With the FTSE 100 back at all-time highs, Mumford anticipates markets will fall back at some point but says he will snap up shares if they do.
Proof that ‘ethical’ investing and money-making are not diametrically opposed comes from Susan Round, the only woman fund manager in our top 10.
Round works for Ecclesiastical Investment Management, the fund management arm of Ecclesiastical, which is the insurer the Church of England founded in 1887.
With this religious background it is no surprise Ecclesiastical offers a range of ‘Amity’ funds that avoid investing in companies engaged in the arms trade, brewing, tobacco and mining. They prefer healthcare, pharmaceutical and other 'socially responsible' stocks.
Round started running the Ecclesiastical Amity UK fund in March 1988. Since then investors have received a total return of 426%. This is much less than the 697% generated by the FTSE All Share index. However, given that the fund excludes 40% of the companies on the UK stock market, this underperformance is probably inevitable.
Most investors who know what the £985 million fund is about are probably content with the situation as the latest stats show it has turned £1,000 into £6,611 today.
Round is coy about revealing her precise age but retirement is not looming given she joined Ecclesiastical in 1984 early in her career.
Neil Woodford, 53, is the closest fund management has got to a household name.
Woodford has come to epitomise all that is good about active fund management. His survival at the top of his industry reflects his record in protecting his investors from stock market excesses: most notably, his decision to shun dot com stocks in the 1999 technology bubble, which crashed the following year; and his rejection of banking stocks in the run up to the credit crunch in 2008.
He also takes a long-term approach to the companies he invests in, refusing to sell unless prospects seriously deteriorate, as they did when he dumped Tesco after its profits warning last year.
Some would say that makes him as ‘ethical’ an investor as Susan Round, although alongside the fondness they share for drugs companies, Woodford alone likes the dividend generating powers of tobacco and defence companies.
Woodford started his first fund, Invesco Perpetual High Income, in October 1988. Its total return of 1,666% since then trounces the 697% from the FTSE All Share.
A £1,000 investment in the fund at launch would be £22,826 today.
We inadvertently left out Asia maestro Hugh Young due to a technical issue with our database. With that cleared up we're glad to put Young in his rightful place among the investment veterans.
Singapore-based Young has run the Aberdeen Asia Pacific fund since 1988 and the Aberdeen New Dawn investment trust, also focused on Asia Pacific, since its launch in 1989. They remain his main funds although he runs many other open-ended funds, which you can see on his factsheet.
Young, who has a Citywire A-performance rating, says the rationale for investing in the one of the fastest growing region's in the world remains the same as when he began, although the opportunities to invest have expanded hugely alongside big improvements in corporate governance and shareholder accountability.
Under Young the £2.6 billion Asia Pacific fund has, according to Aberdeen, delivered a 12.9% annual return to investors since its launch 25 years ago, compared to a 9.9% average return from other funds in its sector. Over 10 years the fund is fourth out of 43 funds with a total return of 423%. This compares well to the 340% return from the FTSE World Asia Pacific ex Japan index.
The £250 million New Dawn is the top performing investment trust over 10 years having delivered a 538% total return to shareholders.
Fund manager Edouard Carmignac is not a name to ring bells with many British investors. However, as founder of Carmignac Gestion, one of the fastest growing investment firms in Europe with over €50 billion (£42 billion) of assets under management, he is a force to be reckoned with, particularly as the group has targeted the UK for expansion.
Since 1989 Carmignac, 65, has been responsible for two of his firm’s largest funds: the €30 billion Carmignac Patrimoine , which invests in shares and bonds across the world and which he co-manages with Rose Ouahba and Frederic Leroux; and the €8 billion Carmignac Investissement , a global equity fund. Sterling-based versions of the fund have recently been made available in the UK but to get a sense of Carmignac’s achievement you have to look at the original euro-denominated funds. The Investissement fund, for example, has generated a total return of 936% since launch, compared to 290% from the MSCI World index. Carmignac attributes the success to getting some big calls right on the tech bubble and emerging markets as well thorough company research. ‘We have a direct line to God,’ he has joked.
Carmignac, who was born in Paris but brought up in Peru, likes to make an impact. When Citywire first visited him in his ornate offices in central Paris, our reporter was surprised to see large portraits of chairman Mao and Vladimir Lenin opposite a picture of Queen Elizabeth awarding him a polo trophy. Carmignac has been an outspoken critic of President Hollande’s tax and economic policies but has himself been criticised for ostentatiousness during a period of austerity, hiring Rod Stewart and the Rolling Stones for private concerts in the past two years.
We approach the end with probably our oldest fund manager and arguably the only other manager to challenge Woodford in the familiarity stakes to UK investors.
Over the years Mark Mobius, 74, has made a name for himself by tirelessly travelling the world promoting the emerging markets funds which he helped pioneer – as well as researching the companies and countries in which he invests.
Mobius’s most significant fund for British investors is the £2.3 billion Templeton Emerging Markets investment trust. Launched under Mobius in June 1989 the trust has grown £1,000 of its original shareholders’ capital into £23,987.
Over 10 years it is second out of three trusts in the global emerging markets sector with a 543% total return.
Singapore-based Mobius has shown no desire to let up but when he does stow away his suitcase for the last time, there is a team of 53 portfolio managers and analysts from which a successor will probably be drawn.
We finish with the most obscure fund manager on our list!
It is fair to say Simon Knott has gone under the radar of most investors despite proving his investment credentials time and again.
Knott has run the Discretionary unit trust almost single handed since 1991 and has relied on his performance for marketing the fund.
In an industry dominated by advertising, branding and promotions, this maverick approach means the fund has been overlooked. It holds just £30 million of investors’ money, even though Knott has turned £1,000 into £17,800 in his 22 years in charge.
Citywire A-rated Knott also runs the Rights and Issues investment trust, in which the Discretionary fund invests. Both funds hold a tight portfolio of 30 stocks. A deep value investor, Knott says, ‘if you’re picking good companies, why not invest large amounts of money in them?’