In front of Paul Taylor Japanese food sits almost untouched. The Fidelity fund manager is far, far away. He is describing lessons imparted by Peter Lynch in Boston and Anthony Bolton in London.
“The time they have to spend with you…I’m amazed,” says Taylor, almost at a loss for words as he contemplated the wisdom imparted by two legendary Fidelity asset managers.
The Brisbane Anglican Church Grammar School product has done his mentors proud. Taylor’s fund is up 12.4 per cent per annum since inception on June 30, 2003. The S&P/ASX 200 Accumulation Index has gained 8.6 per cent a year during the same period.
Taylor now manages $6 billion. He has a team of eight analysts, two other portfolio managers and two investment co-ordinators. Another analyst may be hired this year.
That is in stark contrast to when he arrived back in Australia in 2003 with no funds under management and all alone in Fidelity’s Pitt Street office.
“People would ask me: where’s your team?” recalls Taylor. “Who are you?”
Consultants were even more cutting. “What do you know about Australia they would ask,” he says.
But Taylor was a true-blue Aussie. He had grown up in Brisbane’s northern suburbs, studied accounting at the University of Queensland and worked as a management consultant.
In 1996 he left Brisbane for London Business School. He started work for Fidelity in London in August 1997 and began as an analyst following European industrial companies.
Taylor was quickly assimilated into the Fidelity culture. He tries to find out everything one can about a company. Taylor remembers spending a day in Glasgow caught up in the enthusiasm of a man who helped manufacture scurry pumps, a unit of the Weir Group Plc.
“That sort of enthusiasm is contagious,” says Taylor. “Investing is 50 per cent finance and 50 per cent the softer side: leadership, culture and enthusiasm in an organisation.”
After about three years at Fidelity Taylor became a banking analyst. He experienced the effects of the Russian sovereign bond default, the collapse of Long Term Capital Management and the pricking of the Internet stock bubble.
He was first given a portfolio of money to manage in 2000. In 2001 he was managing Fidelity’s global financial sector team of analysts. But by 2002 he wanted to come home.
Back in Australia what the consultants didn’t know about Taylor was that his foreign experiences were valuable in assessing the validity of corporate strategies of many Australian companies.
He remembers a U.K. takeover by an Australian company that was praised by investment bankers, analysts and the press. It later proved disastrous, just as Taylor and his fellow Fidelity colleagues predicted it would.
Taylor’s fund is commonly described as “growth at a reasonable price.” His team, however, were mainly educated as value-based investors at their previous firms.