UK 'star' fund manager sees 10-15 years of stock market growth

A man walks past the London Stock Exchange in the City of London

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A man walks past the London Stock Exchange in the City of London October 11, 2013. REUTERS/Stefan We …

By Simon Jessop and Chris Vellacott

LONDON (Reuters) - Britain's stock market is set to enjoy 10-15 years of growth as an economic recovery builds, according to one of London's most closely-watched money managers who built a reputation for outperformance over a decade of market crashes and volatility.

Old Mutual Global Investors' Richard Buxton said progress this year was likely to be choppy, however, due in part to instability in emerging markets, where many major British firms derive a large proportion of their revenues.

"I'm not anticipating this is a year where it's a slam-dunk and you're going to make 15-20 percent," he told Reuters in an interview, several months after defecting from rival Schroders.

Buxton is one of a handful of money men dubbed "stars" for their ability to consistently outshine peers and who become brands in their own right, attracting billions to their funds.

Buxton left Schroders in June after more than a decade managing the 3.5 billion pounds ($5.7 billion) UK Alpha Plus fund.

Much of the money he ran there has since followed him to Old Mutual where his fund has grown from 160 million pounds just before he arrived, to around 1.1 billion pounds.

"I've been really humbled and pleased by how many clients have followed and we'll do our utmost to justify their faith," he said, pointing to a track record of beating the stock market index by an average of 4.4 percent every year.

Investors who followed him will find little changed in his investment style, characterised by focusing on a relatively small number of individual companies with, in his view, strong management and good prospects.

Buxton said he had made several changes to his portfolio in recent months.

He has bought HSBC shares, warming to the lender because it was "pulling flags up where there's no prospect of making a decent return" and looking to lend more in key markets such as Hong Kong.

He has also taken a position in insurer Aviva , currently undergoing a group-wide revamp under a new management team.

So far, his bets appear to be paying off. The Old Mutual UK Alpha fund was up nearly a third in 2013, comfortably outpacing Britain's FTSE 100 blue chip index <.FTSE> which rose 14 percent.

($1 = 0.6125 British pounds)

(Editing by Mark Potter)

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