Old Mutual Global Investors' Richard Buxton has told IFAonline sister title Investment Week his move from Schroders to his new firm is his last in fund management.
Buxton (pictured) joined Old Mutual in June as head of UK equities, surprising many investors by moving to one of Schroders’ rivals to take an identical role.
He already ran a mirror fund of his Schroder UK Alpha Plus fund for the group, which was renamed the Old Mutual UK Alpha fund upon his arrival and has since grown to nearly £1bn in just six months.
Buxton made the switch after claiming the opportunity to build a large-cap equity business was too good to refuse.
He told Investment Week this will be his final role in a career spanning almost three decades.
“I did 11 years at Barings and 12 at Schroders. I have got one more big job in me,” he said.
“Schroders is a massively diversified business: UK equity, as they kept reminding people when I left, is only 6% of the business. The flipside is, no matter how well we did, we never moved the needle.
“Old Mutual has always had fantastic access to mid- and small-cap companies, but not necessarily large cap,” he said.
“Since I have arrived, we now have that – every FTSE 100 company we have asked to see has come in to see us, and it would be nice in ten or 15 years to look back and say I was a big part of helping build this business, whereas Schroders is already there.”
Since starting at Old Mutual, Buxton has maintained his focus on the embattled UK retail sector, an area of the market he said is one of the few unaffected by growing political interference.
The manager has upped his weighting in “friendless” Debenhams after the retailer suffered a torrid year, with its share price falling 30% following a series of profit warnings.
“We first bought it in 2010. Profits have had a setback, but we have been adding to it on weakness and will continue to do so,” Buxton said.
He said Next, which by contrast finished the year up nearly 50%, should continue to perform strongly in 2014. An update at the start of the year has confirmed this, with the stock jumping around 10% last week after reporting strong Christmas sales.
On the downside this year, Buxton expects banks, utility companies, and housebuilders to come under increasing regulatory and political scrutiny, and the manager has therefore trimmed a position in former top holding Taylor Wimpey.
“Political risk can extend over any sector – if you are making too much money or ‘excess profit’, no-one is immune,” he said.
“We have been used to it with the banks, but now housebuilders which are ‘sitting on land’ will be taxed if they have not delivered, and utilities are under scrutiny.”
Buxton has returned 27.7% in the year to 6 December according to Morningstar, ahead of the IMA UK All Companies sector average of 21.8%.
To promote 'long-term investment'
Switching 'hard and expensive'
Smaller funds still packing a punch
To drive progress