Sunday, 24 July 2016
Last updated 1 day ago
Aug 17 2010 | 1:00pm ET
Investors fled the Gartmore Group in the second quarter following the firm’s suspension of one of its top hedge fund managers.
The London-based firm said that investors pulled £1.8 billion pounds between April and June. That, combined with performance losses, left the firm £3.6 billion lighter at the end of the quarter than at the beginning.
The outflows were, at least in part, the result of the suspension of Guillaume Rambourg, one of Gartmore’s star managers, for violating internal firm policy. Rambourg was reinstated after a month, but left the firm last month to battle a Financial Services Authority investigation of him.
Rambourg’s departure has exacerbated Gartmore’s outflows. The firm lost another £305 million through Aug. 2 and has received another £223 million in redemption notices for Sept. 1.
It all added up to a rough first half for Gartmore, which said its net income for the first six months of the year dropped by almost two-thirds to £18.8 million.
“It was without a doubt a challenging six months,” CEO Jeffrey Meyer said. “It was six months that we really didn’t anticipate. We have frankly had to hit the reset button because of the regulatory issues around Guillaume on what we thought was a sound strategy.”