After 12 months of battling against the odds, the six fund managers competing in the Rehab race managed to increase the initial €600,000 fund by 22 per cent, writes Jane O'Sullivan

First out of the starting gates, Hibernian grabbed an early lead in the Rehab Great Investment Race and never once faltered.

Clearing hurdles like September's collapse in equity markets, it romped home a clear winner, well ahead of the rest of the field.

The fund management group delivered a return of 88 per cent on its €100,000 investment, contributing more than two-thirds of Rehab's €130,279 gain from the race.

That the race made money at all for Rehab, given the battering taken by equity markets over the course of the year, is testimony to the hard work of the fund managers involved.

When they agreed to take on the stock market in aid of the charity last March, the six fund managers could not, in their wildest dreams, have imagined what was coming down the track.

Twelve months on, they all agree it was a tough task, requiring more time and attention than they had initially expected.

"It was the worst year for investments in equities of my entire career and that goes back to 1984," said Ms Anne Barker, fund manager with Pioneer, the investment arm of Italian group Unicredito Italiano.

Some investment strategies undoubtedly proved more successful than others over the course of the race.

Hibernian's winning approach was to tactically switch between a number of key funds, particularly cash and technology.

The fund manager had hoped to double its money and came "agonisingly close", according to Hibernian's Mr Dara Fitzgerald. But the market went against it at the last, leaving it short of its own target.

Bank of Ireland Asset Management, which took second place in the race, went for a very different investment approach.

But fund manager Mr Chris Reilly's strategy of investing directly in a handful of lowly-rated, low-risk Irish equities also paid off with a gain of 39 per cent, another excellent performance in a period that saw the ISEQ fall by 6 per cent.

Irish Life, which provided some of the most dramatic race moments, also delivered the main surprise in the last leg, coming from behind to finish third.

Fund manager Mr Seamus Magner's high-risk strategy of trading international equities proved the most volatile over the course of the race. It left him very exposed to the plunge in equity markets after September 11th, a month in which he lost 28 per cent only to bounce back with a 38 per cent gain the next month.

But despite the rollercoaster rise, Mr Magner finished well, managing a remarkable gain of 35 per cent in March to turn a negative position positive.

At the end of February, he had been firmly stuck at the back of the field, nursing losses of 18 per cent on his fund. But his luck turned in March and a month of actively trading the likes of KPN, Vodafone, ICI and Scottish Power delivered results and he produced an 11 per cent gain overall.

Given that Irish Life was at one stage sitting on a fund worth just €61,632, Mr Magner deserves credit for travelling the long road back to profitability.

Friends First, which adopted a mixed approach of investing in both unit funds and directly in equities, steered a steadier course during the year.

Mainly ranked mid-table, it finished in fourth place with a gain of 7 per cent.

"We are a little disappointed we didn't do better but it was a very difficult year," said Mr Gerry Mangan.

The exceptional circumstances forced Friends First to adjust tactics slightly during the race as it switched money out of funds and into particular shares that it felt would perform well.

Despite their best efforts, Setanta and Pioneer failed to make it back out of the negative territory they entered in the early months of the race. Pioneer, which opted for a relatively conservative strategy of investing across a broad range of its own funds, never fully recovered from a brief, ill-advised foray into high-technology stocks last August.

"We are immensely disappointed we couldn't do better," said Pioneer's Ms Barker of the fund's 7 per cent loss.

"We tried to keep a steady hand on the tiller but it was not good enough for these markets. The background was ghastly."

Setanta, the fund management arm of Canada Life, which put all its money into its flagship Focus 15 fund, also ended the year some 7 per cent lower.

Fund manager Mr Gary Connolly admitted that the strategy might not have been best suited to the race, given that the fund is usually sold with a five-year time frame for investment in mind rather than a single year.

But Rehab wasn't complaining, happy with a 22 per cent gain overall in a year when most investors were nursing serious losses. "We really appreciate that so many were prepared to give of their time and expertise to help the cause of Rehab," said chief executive Mr Frank Flannery.

"We are indebted to the six companies who participated in the Race and also to all of the individuals within those companies who worked so hard on our behalf.

"This was a real act of philanthropy, which is what the Race was all about."