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Profile Paul Taylor

This fund manager knows that irrational markets present great opportunities.

This fund manager knows that irrational markets present great opportunities.

The sharemarket roller-coaster last week kept fund manager Paul Taylor flat out - but he was buying not selling. His professional investor clients gave him several hundred million dollars extra to take advantage of the plunges early in the week.

"We've been very busy in a very good way," says Taylor, 44, the portfolio manager of Fidelity's Australian Equities Fund. "It's an opportunity to buy great companies at great prices."

Despite the hysteria, Taylor says his view of the world has not changed. "What's playing out is a well-worn path - it's not unusual from a cyclical perspective," he says.

Taylor explains that after every banking crisis, such as the financial crisis of 2007-08, comes a sovereign debt crisis because the banks effectively hand on their problems to governments, through government bank bailouts or cash handouts to stimulate the economy.

"The sovereign debt issues in the US and Europe will be with us for a long time as they try and buy themselves time to fix their problems," Taylor says, adding that he believes sharemarket investors should always take at least a three-year view. "If you look at three- or six-month or one-year results, you're dealing with fads and fashions and euphoria and panic and emotion."

For Taylor, the recent market ructions have tarred everything with the same low-growth brush. "That's what creates opportunities, when markets are not rational," he says. "For a fundamentals investor, these are ideal conditions."

Brisbane-born Taylor started as an investment analyst with Fidelity International in London, after moving there to study at the London Business School. Fidelity is a privately owned global asset manager with more than $250 billion in funds under management.

It was a career turning point for him; before that he'd worked for two big accounting firms in Brisbane but realised his interest lay less in accounting and more in working out how companies made money.

In London, Taylor's class had 35 students from 33 countries and the one-year full-time course gave him thinking space. "Sometimes you get caught up in day-to-day work and lose [sight of] the big picture," he says. "What do I really want to do? What am I interested in?"

When he applied for a job at Fidelity, he was given a "prospectus test" - preparing a presentation about whether a real company, British package travel group Airtours, was a buy or a sell.

His sell recommendation was based on an intensive week of research, including talking to the Airtours chief financial officer and Britain's Monopolies and Mergers Commission about a prospective takeover.

Taylor spent six years with Fidelity in London and the US, rising to be the portfolio manager for its global financial services fund, before moving to Sydney to open Fidelity's first Australian office.

Now, Taylor and his team of 10 investment professionals manage a little more than $2 billion in the Australian Equities Fund, plus another $5 billion in mandates from superannuation funds.

In July, it was the only large-cap Australian equities growth fund to get a five-star rating from Standard & Poor's (see also cover story, Page 4).

Taylor says his best stock selection has been Oil Search, which he bought at 60? in 2003 (it's now about $6.20). One of his worst was hedge fund manager HFA, which had liquidity issues and highly volatile returns during the global financial crisis.

THE BIG QUESTIONS

Biggest break

Getting my first job at Fidelity in London [in 1997]. There is no better investment apprenticeship than working with great investors.

Biggest achievement

Setting up Fidelity's Australian equities investment operation [in 2003]. When I first arrived back in Sydney there were only nine of us in the Fidelity office and now we are more than 120.

Biggest regret

I certainly have made plenty of mistakes but feel like I would not be in the position I am today without making those mistakes and learning from them. I do have smaller regrets and they typically revolve around relationships with people and mishandling everyday situations.

Best investment

Going to London Business School to complete my master's in finance. It got me into the job and industry I love.

Worst investment

The last set of golf clubs I purchased just before my daughter was born five years ago. I have probably only played five or six rounds of golf since.

Attitude to money

Spend less than you earn - that ensures a happy life. I have a very conservative attitude towards money and I think that brings a lot of freedom. I hate debt and always want to have enough cash to live off for a few years should any sort of disaster strike.

Personal philosophy

Whatever you do, do it with passion and enthusiasm and everything else will look after itself.


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