Q: Is the prospect of stepping into Anthony Bolton's shoes exciting or intimidating?

A: I’m certainly excited at this opportunity, though a small part of me is quite intimidated.

Q: In what ways does your investment style resemble Mr Bolton's and in what ways does it differ?

A: We resemble each other in that we are both contrarians. We are prepared to go against the grain and buy unloved stocks. We both have a strong focus on undervalued stocks and are prepared to look for them at the large or small cap end of the market. We differ in that Anthony is far more experienced than me and we also use our in-house team of analysts in a different way. I am more systematic in my dealings with them while Anthony is more informal.

Q:Your track record so far suggests you do better with small rather than large funds. What are the extra challenges involved in managing a giant fund such as Special Situations and how do you plan to tackle them?

A: You have to see things coming much earlier with a large fund. I use a series of tools to screen stocks so that I can buy into them and sell out of them ahead of the market as a whole.

It also helps to be a contrarian, so that you are buying stocks that others don’t want and selling ones that others do want. However it can take time for the market to cotton on to the worth of your unloved stocks and I think this is why the performance of my current large cap fund - European Aggressive - has suffered in recent months

Q: There are many strong competitors in your field. Why do you think investors should stick with Special Situations?

A: I have access to a very large team of 71 analysts who spend each day every day uncovering and monitoring attractive stocks. The fund also has expanded powers under new regulations which will enable it to sell stocks short and thus profit from falls, as well as rises, in share prices. On top of that Anthony Bolton will still be around to offer advice and guidance when required.

Q: Looking at the UK stock market over the next 12 months, what do you think the key influences will be?

A: I am more cautious than I have been. Interest rates are rising and we could be moving into a credit crunch. I also think large caps are looking increasingly attractive compared with small caps.

Q: Do these conditions point you towards certain sectors which you think are more interesting than others?

A: I am underweight in the financial sector but overweight in the pharmaceutical and media sectors.

Q: How do you decide which stocks to buy for your portfolio?

A: I am interested in a company’s position in its particular market and the quality of its management. I also want to know about fundamentals such as revenue, cashflow and profits. I am looking for undervalued stocks.

Q: How do you decide when to sell a stock?

A: I will have an indicative selling price for each stock which will be a moving target. When the share price gets close to that target I will start selling but I will not sell all in one go.

Q: What would you regard as your best stock purchase?

A: Ocean Wilsons, the Brazilian port operator. I came across it back in 2002, when it was trading on a very low valuation, and bought it for the UK Aggressive fund. Since then it has gone up in price about four times.

Q: What was your most disappointing stock purchase?

A: A small German software company. It looked very promising but while it was notching up impressive sales figures it was not collecting the cash to go with those sales. The shares fell by about 40 per cent and I sold out.

Q: What made you become a fund manager?

A: I like the individual autonomy - it’s not about consensus. Performance is also transparent - the figures are there for everyone to see. In addition I like the detective aspect of hunting down attractive new investment opportunities.

Q: What was the most valuable piece of advice you were given when you first started in fund management?

A: Early on in my career I was told that a fund manager is defined not just by his analytical abilities but by his emotional abilities. You have to learn to be fairly detached and not get rattled if some of the stocks you have picked perform poorly.

Q: What do you do to relax when you are not managing money?

A: I do a lot of outdoor activities such as hiking. I also do yoga and pilates and enjoy spending time with my friends and family.

Q: Do you think that great fund managers are born or made?

A: I think experience can certainly help make you a better manager but there are some emotional qualities you need which you are probably born with.

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