Fund managers go in MGAM clear-out

MORGAN GRENFELL Asset Management, the City fund management group, has sacked 18 senior staff following a management shake-up.

The departures include Julian Johnson, a highly respected City figure who was responsible for managing overseas clients' funds, and Graham Bamping, who ran the London end of the Asian business.

The redundancies come just days after Morgan Grenfell was again in the spotlight as a result of the decision by its former star fund manager, Peter Young, to appear in court on fraud charges in a dress.

Yesterday the former MGAM executive Glyn Owen, who received a lifetime ban from working in the City, allegedly because of his failure to supervise Mr Young properly, said he was appealing to the Court of Human Rights in Strasbourg.

Robert Smith, chief executive of MGAM, said yesterday that the redundancies, which took place late on Thursday, were a consequence of a reorganisation within the firm and had nothing to do with any underlying problems at the business. He said that in many areas the firm was still recruiting.

"It was a very grim day. This is nothing to do with losing funds. In the UK we have added pounds 5bn of net new business this year," said Mr Smith.

"The amount of funds we have under management is just under pounds 100bn globally. Until yesterday we had taken on 143 people net in the UK."

MGAM said the redundancies were the result of an internal reorganisation which followed the appointments of Greg Fisher, 31, and James Goulding, 34, to head a combined UK and European asset management business. The operations were previously managed entirely separately and bringing together the two businesses had resulted in a number of positions becoming redundant.

Mr Bamping was also a casualty of the decision taken to run all the Asian business from Singapore.

The departures are particularly significant since fund management is one of the few areas of the City where redundancy is virtually unheard of.

Although the firm has made considerable headway in recovering lost ground with UK institutions since the Peter Young affair , confidence among retail clients has yet to recover, particularly in Germany, where Morgan Grenfell is still seeing net redemptions by private investors.