“We absolutely do not want to have that type of business – we want a culture where different investment teams can absolutely stand and fall by their own views and be fully accountable for them even if those views are in complete conflict.”
Buxton also confirmed that if his fund’s performance suffered long-term as a result of his promotion, he would step down as CEO rather than from portfolio management.
Old Mutual UK Alpha Fund has lagged this year in the UK All Companies sector, which Buxton attributes to the poor performance of mega-caps versus mid-caps.
“If the FTSE is up around 4% this year, mid-caps have gone up 13%,” he explained.
“Any manager that has 75-80% in the FTSE 100 as I always do, is going to be off the pace against other funds that are more mid and small-cap oriented.
“Secondly, there are a number of specific one-offs that have hurt the fund and I continue to believe there is fabulous long-term value in stocks like Ladbrokes and Drax.”
He also revealed he has recently started buying into BP – 2.5% of the fund at present, and set to rise – having hitherto owned Royal Dutch Shell.
“The market is clearly suggesting the dividends are unsustainable, and we completely disagree,” he said.
