Lord Rockley, chairman of Kleinwort Benson, has given up his chairmanship of the merchant bank's investment management division in a boardroom shake-up. In his place, Sir Nicholas Redmayne, joint chief executive of the investment bank, will take charge.
The changes will also see the departure of Colin Maltby, who built up the fund management business and was its chief executive.
"Mr Maltby has done a splendid job putting a structure in place but there is now a need for change," Lord Rockley said.
The move fuelled speculation of a row between investment management and banking divisions over details of a potential bid for the pounds 944m bank. This was denied by Lord Rockley.
Kleinwort's investment management group has pounds 14.3bn under direct management with a further pounds 13.6bn managed by associates and joint ventures.
Insiders suggested last night, however, that Mr Maltby's departure was the result of board concern over poor performance of the fund management arm.
A number of top managers voiced concern that under Mr Maltby, the business had not proved as strong as those of some competitors.
Others claim the row centred on Lord Rockley's declared intention to integrate operations of Kleinwort Benson businesses to cut group costs.
This strategy, which is now being pursued by Sir Nicholas, the joint chief executive, is described as ensuring "the closest possible links between the group." It was detailed in an announcement to 2,000 employees yesterday.
Sir Nicholas's intention was resisted by Mr Maltby, who argued that it would result in conflicts of interest.
"I have worked for Kleinwort Benson Investment Management for seven years and have enjoyed building up the group," said Mr Maltby, who will leave his desk at the end of the month.
Mr Maltby, 53, joined Kleinwort from NM Rothschild in 1980. The company has launched five investment trusts since 1991. Kleinwort European Privatisation Investment trusts was launched in January 1994 and attracted 60 per cent more than its target capital of pounds 500m.
The business has also scored successes with its quantitative equity portfolio range and its emerging markets trusts.
However, the pension fund management is considered disappointing and insiders felt the group had not made the most of opportunities for growth.
o Elsewhere in the City, Robert Benton, the 38-year-old managing director of James Capel, is moving to Hoare Govett, the stockbrokers owned by ABN Amro, as global head of equities. He will answer to Nick Bannister, chief executive, and Nick Whitney, chairman.
The move follows the purchase by Hoare Govett of several foreign securities firms, including Cimo in Italy, Masson and Fontenay in Paris, Alfred Berg in Norway and the remaining share in Hoare Govett Asia.
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