Star quits the City to run his £10bn fund from an island paradise: Terry Smith relocates to Mauritius to target Asian markets
Sun seeker: Star fund boss Terry Smith is relocating to Mauritius
With 300km of white sandy beaches, spectacular coral reefs, stunning volcanic hills and an average daily temperature of 25 degrees, Mauritius has earned a reputation as an island paradise.
It is an unlikely place to find the head office of a leading finance company, let alone one that looks after almost £10billion of British savers’ cash.
But this Indian Ocean retreat is precisely where star fund manager Terry Smith has decided he will run his Fundsmith funds.
Smith has revealed he is to quit a career in the City for Mauritius in order to find peace and quiet to help him make investment decisions.
It is understood the 63-year-old finds the noise of London too distracting, and thinks he can make better decisions about where to invest savers’ cash by working in the favourite honeymoon destination.
It’s an unorthodox approach – but then Smith has always been a maverick.
While he has carved a career as one of the most successful fund managers in the City, he is also one of the most controversial – being sued by one employer, and falling out with another.
In recent years he has become increasingly reclusive. He stopped his colourful blog in 2013 and now never gives interviews.
In a one-line statement Smith said: ‘Mauritius is much more convenient in terms of its time zone than London for dealing in Asian markets and I find being away from the ‘noise’ of London helpful.’
Perhaps significantly, the move also sees Smith follow in the footsteps of other star investors.
American Warren Buffett runs his Berkshire Hathaway business in Omaha, Nebraska – far from the eyes of Wall Street; and Sir John Templeton favoured the Bahamas to run his investment funds.
Peace: Smith is understood to find the noise of London too distracting, and thinks he can make better decisions about where to invest savers’ cash by working in Mauritius (pictured)
Smith is viewed by many as a natural successor to these greats. Since 2010, he has delighted investors since launching his flagship Fundsmith Equity fund, with returns of 160 per cent.
His has been the top performing global fund over that period and would have turned £10,000 into £26,000. The average rival fund would have turned the same amount into £17,390.
His impressive performance has seen his fund climb to the top-sellers list, and he now manages £9.8bn of savers’ cash.
Smith’s strategy is simple – ‘Buy good companies, don’t overpay, do nothing.’
In search of the best stocks, he and his researchers are reported to devour thousands of research notes, annual reports and industry publications a week, from Tissue World magazine to Elevator World or Petfood Forum, in order to discover every last detail about a company.
Terry Smith in 1992 when he was he was sacked from City firm UBS Phillips & Drew
So perhaps this strategy suits a move to a quieter climate.
Associates say Smith finds the City distracting with analysts and brokers constantly bombarding fund managers with their views.
In 2014, Smith’s fund management firm Fundsmith launched an investment trust which focuses on companies in emerging markets. The month after it launched he opened an office in Mauritius, moving five staff there.
Located in the Indian Ocean and four hours of ahead of UK time, the English-speaking country is closer to the regions in which the trust invests.
Some 30 per cent of the investment trust is in Indian companies, with other holdings in South Africa, the Philippines and Sri Lanka.
The team in Mauritius works on stock selection, investing, product control, marketing and research.
He sums up the perfect investment as a company that is generating lots of cash and is still able to find profitable avenues to invest it.
‘We’re only really interested in companies that don’t really need our money,’ he once said.
Details of Smith’s move emerged in a Companies House filing where his country of residence was changed to Mauritius from the start of the year.
Sources say that Smith’s decision to relocate has not come as a surprise to those that know him, as he owns a house on the island.
He has been spending an increasing amount of time in the country and has long held a Mauritius email address.
It is unclear whether Smith, who has two daughters from his marriage to Barbara, will be taking his family with him.
But we haven’t seen the last of him. Smith will make the 12-hour journey back to England on a regular basis to meet institutional investors and will also continue to spend time in the company’s US office in Connecticut.