Tue, Sep 16, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Gartmore’s troubles continue, may lose mandate

Tuesday, September 07, 2010
Opalesque Industry Update – Problems at London-based asset manager Gartmore continue to pile up. Its lead portfolio manager has left and the firm risks losing a mandate to run one of its own investment trusts, reported Financial News yesterday.

In a regulatory filing before the London Stock Exchange (LSE), the board of directors of the listed fund Gartmore Growth Opportunities said it served a “protective” notice of termination (of 12 months) of its investment management deal with Gartmore.

Gartmore now has 12 months to find a replacement for the 17-year veteran Gervais Williams, who resigned last week. Williams, who has been managing hedge funds, smaller companies funds and Irish funds at Gartmore, is the second high-profile manager to leave since the firm listed on the LSE late last year. The first one was Guillaume Rambourg.

The notice added that Gartmore’s board of directors must be satisfied with Williams’ replacement or they would allocate the $84.5m (£55m) Gartmore Growth mandate to another asset manager.

Financial News said a spokesman for Gartmore declined to comment on the issue.

The notice also means the board will reduce its potential costs should it choose to not stay with Gartmore, according to Fund Strategy, which added that Adam McConkey had replaced Gervais Williams as head of UK smaller companies.

However, the board said it is still considering the trust management arrangements and may withdraw the protective notice, said Investment Week.

Williams is set to formally leave Gartmore at the end of this month where he has been heading the UK smaller companies and running the $129.13m (£84m) Fledging and $72.25m (£47m) Irish trusts, the $230.63m (£150m) UK & Irish Smaller Companies Oeic, as well as the Growth Opportunities trust.

He is being credited for the rise in Growth Opportunities assets after the trust outperformed the AIC UK Smaller Companies sector and the FTSE Small Cap ex IT index over five years.

The Gartmore Irish Growth and Fledgling investment trusts have not yet issued any statement on how they plan to move forward with their relationship with Gartmore, said Fund Strategy.

Gartmore’s woes
Gartmore’s problems began early this year when its star portfolio manager Guillaume Rambourg was suspended and then reinstated. Indeed, an internal probe found that he had violated internal trading rules when he directed trades to specific brokers. The UK Financial Services Authority (FSA) announced in June that it was formally investigating Rambourg in connection with the firm’s internal investigation.

Rambourg was then forced to resign in July. He said he was leaving the firm after 14 years to face the financial watchdog’s probe on his internal conduct as portfolio manager.

News of Rambourg’s resignation saw Gartmore’s shares plunge by 8% to 101p on July 15.

A day after his resignation, Rambourg took an $11.54m (£7.5m) paper loss from Gartmore but remained a shareholder of the company. He has a 3.9% stake in the firm.

In August, Gartmore reported a 65% decline in its profits after net outflows in the three months through June. Net income dropped to $29m (£18.8m) in the first six months of 2010 from $82.9mm (£53.9m) a year earlier. The company attributes the drop to the suspension and eventual resignation of Rambourg.

During the same period, Gartmore disclosed that its AuM fell by 15% as investors pulled cash and poor performance. The firm’s current AuM stands at $488.96m (£382m).
- Precy Dumlao
PD

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Investing - Big hedge funds show interest in Alibaba, Maglan joins other hedge funds in rush to Argentinian assets[more]

    Big hedge funds show interest in Alibaba From Hereisthecity.com: …Three other major hedge fund investors who have shown interest in the IPO are Dan Loeb of Third Point, David Tepper of Appaloosa Management and Dan Benton of Andor Capital Management. All three were among the roughly 800 p

  2. Investors looking at other sources for hedge fund-like returns[more]

    Komfie Manalo, Opalesque Asia: Investors who are always on the lookout for higher gains are looking at alternative sources of income, particularly exchange-traded fund industry that generates hedge fund-like returns, according to

  3. Investors move capital out of Scotland ahead of referendum[more]

    Benedicte Gravrand, Opalesque Geneva: Ahead of Scotland’s independence referendum on September 18, asset managers, investors and pension savers are moving billions of pounds out of the country,

  4. Indices - Greenwich Global Hedge Fund Index up 1.57% in August (+4.22% YTD), Eurekahedge Hedge Fund Index rebounds in August gaining 1.36% (4.22%), Lyxor Hedge Fund Index was up 0.9% in August (YTD +1.7%)[more]

    Greenwich Global Hedge Fund Index up 1.57% in August (+4.22% YTD) The Greenwich Global Hedge Fund Index ended the month of August up +1.57%. Equity markets were up in August with the MSCI World Index up +2.00%. This was primarily driven by the performance of the S&P 500 which was up +4.

  5. Alpha Strategic buys stake in Premium Point Investments[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Alpha Strategic plc, a affiliate of