The dangers of the City’s “star” culture were highlighted again yesterday after Gartmore was hit with £1.1bn of fund outflows following the suspension of the trader Guillaume Rambourg.
Mr Rambourg was suspended in late March as part of an internal inquiry. He returned to the firm in the lesser position of investment analyst at the end of April. The firm admitted that since the suspension began it had seen about £1.1bn of net outflows, as clients, spooked by the suspension and the wave of publicity it generated, withdrew their money. Of the £1.1bn, some £380m departed on the dealing day for its hedge fund on 4 May.
Mr Rambourg is the longtime cohort of Gartmore’s most high-profile fund manager, Roger Guy. The inquiry found he had breached internal rules for directing trades to brokers.
However, chief executive Jeff Meyer said that Mr Rambourg is likely to regain his position as a fund manager with the company in five to six months, pending an application to the Financial Services Authority.
The company reported assets under management of £22.4bn on 30 April, up by 1 per cent on 31 December last year after the outflows in April. Mr Meyer said: “The business performed reasonably well during the first quarter; however, more recent events have caused a loss of momentum. With the reinstatement of Guillaume and other steps we have taken, we are in a position to regain that momentum.”
Gartmore has suffered a disastrous first few months as a public company. The group came to market last December, in what was the largest flotation of the year, after cutting its offer price by a third. The shares, which debuted at 220p, are still badly underwater, closing down 7p at 144.2p yesterday.Reuse content