Stephen Whittaker profile

“That story has stuck in my mind since childhood,” he says. “It teaches you to believe in what you’re seeing – and not to worry what the crowd are saying. There are so many ways to get fleeced in this business that you have got to keep your eyes open.”

It’s a philosophy that has served him well in the cut-throat world of fund management. Back in the late 1990s, for example, he came under enormous pressure for shunning the ill-fated technology boom until his stance was vindicated.

He also found himself in a similar situation after taking the reins of New Star’s UK Growth Fund in 2002, and positioning it for a bounce in the stock market which took longer than expected to happen. “The performance in the first six months was pretty poor, but I felt the economy would turn – and it did,” he recalls.

The aim of his £364m fund, which was launched in July 2001and is AA-rated by both Standard & Poor’s and Forsyth OBSR, is to seek long-term capital growth by principally investing in UK companies.

The portfolio will usually have around 80 holdings and is currently equally split between large caps and small/mid cap names. Whittaker particularly favours companies on low price/earnings ratios or those with the potential to be re-rated.

“The original concept was to own cheap shares that would benefit from growth and that hasn’t changed,” he says. “I like some of the house builders as they are on low P/Es and have better prospects than those numbers suggest. Barratt Developments has done very well for me. Elsewhere, Barclays Bank has also recently produced some very good numbers.”

The turnover rate of the fund is quite low because Whittaker doesn’t like to chop and change. When a stock reaches its valuation point, he will examine whether the reasons for holding it still apply. If they don’t, it will be sold.

As far as 2006 is concerned, he is generally optimistic about the prospects. “The stock market is no more expensive than it was three years ago,” he says. “This could be the fourth consecutive year of double digit returns and that would be pretty impressive.”

Whittaker, a keen Manchester United supporter, believes there are plenty of parallels between football and fund management.

“They both have their glory moments and their low points, but respond to hard work, concentration and intelligence,” he says. “Sir Alex Ferguson would make a great fund manager as you need to have a winning mentality in this business.”

Over the past three years Whittaker’s fund is comfortably in the top quartile with a bid-to-bid return of 128.1% - compared to the 89.9% average for the UK All Companies sector, according to S&P data to February 20^th, 2006.

It’s a trend he wants to see continue.