Surprise double resignation forces shake-up at Scottish Widows

Scottish Widows Investment Partnership, the fund management arm of Lloyds TSB, lost its chief investment officer and the head of its retail funds division yesterday, when they both suddenly resigned without an explanation.

Sandy Nairn had been chief investment officer at SWIP for two years, having joined the company from its rival fund manager Templeton. Graham Campbell was brought in to improve the group's retail offerings, and both have been credited with turning around the performance of the company's £70bn funds.

"This has come as a big surprise and is a major blow to SWIP," Mark Dampier, the head of research at Hargreaves Lansdown, said.

The fund management company has been struggling to retain staff after it merged with Lloyds TBS' fund manager, Hill Samuel. When the bank bought Scottish Widows in 2000, the group's Edinburgh office was made the head quarters for the enlarged house, but only a handful of Hill Samuel staff stayed with the group. Fund performance since then has been lacklustre. "Graham Campbell had turned its main UK growth fund into a top quartile performer. Both Sandy and Graham were reinventing SWIP into a proper fund management company," Mr Dampier said.

"Sandy has made a strong early contribution to the business and we are grateful to him for overseeing our successful repositioning," the chief executive Bill Main said, without giving a reason for Mr Nairn's departure. It is thought Mr Nairn and Mr Campbell may be considering setting up an independent fund management venture.

The role of chief investment officer will now be split between Andrew November, currently head of institutional business and Graham Wood.