Anthony Bolton, who manages the Fidelity China Special Situations Plc (FCSS) fund, told the Financial Times he underestimated the difficulty of carrying out due diligence on small- and medium-sized companies in the country.
Bolton was forced to sell his holding in one such company after it falsely reported sales growth of 30 to 40 percent, he told the newspaper in an article published today. Bolton hired five external research groups to find Chinese companies that are overstating their sales growth, according to the article.
Bolton’s China fund has fallen 38 percent on a total-return basis since it started in April 2010 with 460 million pounds ($715.1 million), the FT said.
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