Challenge: Michael Spencer with his wife Sarah
A new bout of rivalry is breaking out between two of the City’s most formidable moneymen – Michael Spencer, 68, and Terry Smith, 70 – who have been goading one another for decades.
Billionaire businessman and philanthropist Lord Spencer has thrown down the gauntlet with a £10,000 wager that a fund manager he backs can beat Smith.
Spencer is offering to bet Smith that the fledgling Nutshell Growth Fund will outperform Fundsmith’s Equity fund next year. His challenge has more than a whiff of David and Goliath.
Nutshell Asset Management was founded in 2019. Its growth fund, run by Mark Ellis, was launched the following year and had just under £21 million of investors’ funds under its stewardship in September.
Spencer is a minority investor in Nutshell’s operating company and a significant investor in the fund.
Ellis uses a mix of human brainpower and AI to calibrate his portfolio. His fund recently gained a new big institutional client which will take assets under management to around £33 million.
Fundsmith, founded by Smith (pictured below) in 2010, had assets of £23 billion in its equity fund in November after becoming hugely popular with investors.
For many years Spencer ran broker ICAP while boxing enthusiast Smith was at the helm of Tullett Prebon.
If he proves victorious this time, Spencer has promised to donate his winnings to a charity supported by The Mail on Sunday for Christmas 2024.
In the blue corner, Smith’s long-term performance has been superb. But in 2022 – a bad year for markets – it was down by 13.8 per cent.
In the red corner, Nutshell did not escape the widespread woe last year. It was down by just over 19 per cent in 2022, lagging Fundsmith.
This year, however, Nutshell is up by nearly 19 per cent, ahead of Fundsmith’s 8.5 per cent rise.
Spencer said: ‘We have clashed a bit on occasion, but Terry has done a very good job at Fundsmith over the years and deserves credit.’
Smith declined to comment.