Why small is favored

Chalk one up for the little guy.

Chalk one up for the little guy. Last month Sandy Nairn’s two-year-old Edinburgh Partners almost doubled its funds under management by taking over the management of Anglo & Overseas, a £90 million ($161 million) London-listed investment trust. The account had been held by Deutsche Asset Management, which with more than $700 billion in assets is 200 times the size of Edinburgh Partners.

The smaller firm’s success is a sign of the times, according to Nairn, 44: “Economies of scale start at a fairly lowly level, and being big creates many problems. We want to grow, but not to the point that it impedes our ability to buy the stocks we want without moving the market.”

Nairn’s unconstrained global stock-picking style -- he has no interest in tracking indexes -- and his bottom-up philosophy are finding favor with consultants. “We have always had the same view on investing, but it seems our views are now fashionable,” he says. He plans to reduce the number of stocks held by Anglo & Overseas to 70 or 80 from more than 200 under Deutsche’s management.

The former head of research at Franklin Templeton Investments, Nairn is now writing a biography of his mentor, the legendary Sir John Templeton. He hopes to finish this year, despite the constraints of his ever-busier day job.

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