‘We’re on the cusp of a British stock market boom’

Veteran fund manager Richard Buxton tells Sam Benstead why now is the best opportunity in 30 years to buy domestic companies

From Black Wednesday in 1992, when Britain left the Exchange Rate Mechanism, to the early 2000s dotcom crash, 2007 financial crisis and Brexit vote: not many fund managers have lived through so many historic market events – and kept their job.

One who has is Richard Buxton. He started his investment career in the 1980s and has been managing his current fund – Jupiter UK Alpha – since 2003. It has gone through a number of ownership changes, most recently from Merian Global Investors to Jupiter Asset Management, but the team behind it has remained the same.

Returning 250pc since launch and with one of the City’s most experienced fund managers at its helm, the fund kept its place in the Telegraph 25 list of our favourite funds after a spring update this year.

Mr Buxton tells Telegraph Money how he invests and why he thinks it has never been such a good time to own British shares.

WHAT DO YOU INVEST IN? This is a concentrated portfolio of around 35 British companies, mainly large ones that most people have heard of, but there are also some mid-sized firms as well. I don’t buy small companies. This is a fund for people who want to own the best British companies trading at reasonable prices.

HOW DO YOU PICK STOCKS? I look for companies that are leaders in their fields and have excellent management teams that can steer them through difficult times, such as political or technological upheaval.

I would never invest in a company where I have not met the management. Even a really good team can make mistakes, so I make sure I see management regularly to keep tabs on them.

I do not mind paying high prices for excellent firms, such as those that have a technology edge and are growing fast, but I avoid defensive consumer groups such as Diageo and Unilever. Valuations are too high relative to how fast they are growing.

IS NOW A GOOD TIME TO BUY BRITISH SHARES? Shares are clearly cheap at the moment and so is the pound – just look at how many companies are being taken over by international firms.

We could be on the brink of a boom for British companies. There is going to be a huge rebound starting this summer and into next year as the economy reopens and people start spending.

Corporate investment will pick up and Brexit uncertainty will finally fade. This is more than a bounce back and is actually the start of something bigger and more long term. The economy will do better than people expect and the stock market will boom.

In the past decade everyone has been selling British shares and buying American ones. But in 10 years’ time we will look back and ask why that happened. Apple was worth more than the entire FTSE 100 at one point. This was nonsense.

WHAT ARE THE BIGGEST OPPORTUNITIES RIGHT NOW? There are lots of good old- fashioned “value” stocks, such as Barclays. I bought shares in April last year at 88p. The book value, the value of a company’s assets if you sold them individually, is £2.70. The shares have rallied to £1.80 but still trade at a discount.

Another firm I own is Whitbread, the owner of Premier Inn. It has taken advantage of the downturn to raise money and capture market share from weaker rivals. In Germany, where it is expanding, it bought 22 hotels at rock bottom prices from a struggling competitor. A great thing about a downturn is that the weak get weaker and the strong get stronger.

WHAT HAS BEEN YOUR BEST INVESTMENT? I made 10 times my money, which is very rare when you invest in large companies, buying Reuters shares in the early 1990s recession. It recovered and ultimately was bought by Thomson.

AND YOUR WORST? My disaster was investing in an investment fund run by one of the Rothschilds. It bought Indonesian coal companies and I lost 90pc of my money. This is an example of a Spac, a shell company that buys other firms and floats their shares. They emerge when the going is good but often end up overpaying.

DO YOU HAVE YOUR OWN MONEY IN THE FUND? I only invest in my own fund. I have a large sum invested, so I am very aligned with other investors’ interests.

WHAT WOULD YOU BE IF NOT A FUND MANAGER? An English teacher – but probably not a great one! I am still a voracious reader.