Trust drops two fund managers

JAMES CAPEL and Morgan Grenfell have been dropped by the Wellcome Trust as managers of its pounds 2.75bn investment portfolio.

The Trust announced yesterday that it had selected 10 managers for its funds, which have risen from about pounds 300m to pounds 2.75bn following the sale of part of its holding in Wellcome, the drug company, earlier this year.

Fleming Investment Management and Henderson Pension Fund Management, which have managed funds for the Trust since Wellcome was floated in 1986, were re-appointed. But James Capel and Morgan Grenfell, also appointed in 1986, have not been retained.

Roger Gibbs, chairman of the Trust, said the calibre of the 20 firms short-listed was 'extremely impressive' and the exclusion of James Capel and Morgan Grenfell 'in no way suggested we were disgruntled'. He added that the average performance over the last six years 'has been very reasonable, although not spectacular'.

The other firms selected are: Baillie Gifford, Gartmore, Hambros Bank, Newton Investment Management, Phillips & Drew and Schroder Investment Management. Barclays de Zoete Wedd is already running a pounds 500m indexed fund while Morgan Stanley is running a fixed-interest portfolio.

About pounds 1.5bn has already been invested in equities with pounds 600m in gilts and a further pounds 600m in cash and certificates of deposit.

Mr Gibbs said the Trust had intended to invest mainly in fixed- interest securities in the short term, but the fall in the market after the share offer closed in August meant shares looked quite cheap. The Trust has stopped buying since the market surge following Britain's withdrawal from the exchange rate mechanism.