A LITTLE-KNOWN Finn with less than five years’ experience of managing money was catapulted into the limelight yesterday when he was named as the successor to Anthony Bolton, Britain’s top stockpicker.
Jorma Korhonen is to manage one of the two successor funds being created out of Mr Bolton’s hugely successful and popular £6 billion Fidelity Special Situations Fund.
The appointment surprised and worried some financial advisers, who had hoped for a more experienced manager and a bigger name in fund management. It is a dramatic elevation for Mr Korhonen, 40, who runs two small Fidelity funds for Japanese and Australian retail investors, with a combined value of just $200 million. Better known names at Fidelity, such as Tim McCarron and Sanjeev Shah, were passed over in favour of Mr Korhonen, who was Mr Bolton’s choice.
Fidelity is breaking up Special Situations into two smaller funds. One will continue to be managed by Mr Bolton until the end of next year, with the same British focus as the existing fund. The other will be run by Mr Korhonen from the beginning of next year and will be free to invest in equities worldwide. Both funds plan to take advantage of new rules allowing them to bet on falling share prices by investing in contracts for difference (CFDs), Fidelity also revealed.
Mr Bolton said: “Jorma was my pick. When you work with somebody for ten years, you know whether someone’s got it.” Mr Korhonen joined Fidelity International ten years ago as an analyst, but started managing money only in 2002. Born in Helsinki and educated in Switzerland and Germany, he worked as a commercial banker in Luxembourg for five years. He has an MBA from IMD business school in Switzerland.
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Mr Korhonen plans to invest the fund in 100 to 200 companies anywhere in the world, usually with a market value in the $1 billion to $10 billion range. Over the past 18 months, he said, he had shifted his focus from Japan to America, where he now sees many companies on attractive valuations.
The 250,000 investors in Special Situations have the chance to vote on the fund split and the CFD approach on July 27. The resolutions require 75 per cent of the votes cast. Fidelity chose to break up the fund because it had become too unwieldy and because of Mr Bolton’s impending retirement.
The appointment raised eyebrows among some financial advisers. Philippa Gee, investments director of Torquil Clark, welcomed the global focus of the new fund, but said that the choice of Mr Korhonen was “a surprise” and questioned whether his methods running $200 million could be scaled up to a £3 billion fund.
Michael Gordon, chief investment officer at Fidelity, said: “Yes, it’s a brave decision. Jorma might be a new name to the public, but he’s not a new name to Fidelity. It doesn’t appear such a risk to us.”
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