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Chris Salih looks at the events leading up to Guillaume Rambourg’s decision to quit Gartmore
Advisers believe it was inevitable that Gartmore European fund manager Guillaume Rambourg would leave the firm.
Rambourg, who resigned last week, is under FSA investigation. The regulator launched the inquiry in June following Gartmore’s decision to suspend Rambourg in April, pending the outcome of an internal probe into possible breaches in directing trades.
Gartmore says its internal investigation found “no suggestion of dishonesty or a lack of integrity”. Rambourg returned to the company in April as a senior investment analyst on the European large-cap team. The firm had applied to the FSA to have his approved status restored so it could reappoint him as a fund manager.
Rambourg was previously co-manager of Gartmore’s European absolute return fund.
Following his suspension in April, Gartmore’s share price slid around 30 per cent. The share price recovered slightly in May but fell to a new low following the news that Rambourg was to quit.
In a conference call to investors after Rambourg’s suspension, co-manager Roger Guy criticised Gartmore’s internal compliance rules, which he said had led to the suspension .
Rambourg’s suspension saw some investors withdraw their stakes in the European absolute return fund, including Insight’s multi-manager team, which sold its entire £18.2m stake.
In a statement explaining his decision to quit, Rambourg says: “I have been faced with a challenging set of circumstances that has resulted in me not being able to optimally fulfil my duties in the best interests of shareholders and investors.
“In the short term, it is in nobody’s interests to continue in my current reduced capacity. It has been a great privilege to deliver performance for clients over the years.”
Gartmore chief executive Jeff Meyer says Rambourg felt unable to fully contribute to the performance of the business due to the ongoing investigation. “He has, therefore, decided to resign to devote his attention to concluding the FSA investigation and to allow Gartmore to put these matters behind it,” says Meyer.
Gartmore’s European large-cap team will continue to be led by Guy and supported by Darrell O’Dea, Leopold Arminjon and Tomas Pinto.
Hargreaves Lansdown senior analyst Meera Patel says: “The pressure obviously got to him. The bigger surprise was that he actually came back, given that it was in a minor role.”
Skerritt Consultants head of investments Andrew Merricks says: “The fact he came back as an analyst rather than a fund manager meant the writing was on the wall. His return may have been a way of finishing off his business with the firm.”
Patel says Rambourg’s resignation will not have any impact on their recommendations of Gartmore funds.
She says: “We decided Roger Guy was always the person calling the shots in terms of stock positions for the portfolios that affect our clients.”
Chelsea Financial Services managing director Darius McDermott says: “Rambourg has taken a fairly sensible decision to clear his name. He found himself in a position that was untenable but I would not rule out him returning to Gartmore.
“Gartmore has already taken precautions by introducing new managers. One thing that would surprise me is if Roger Guy left the firm. He is the largest individual shareholder and is intrinsically linked to Gartmore.”
Aberdeen co-head of multi-manager Graham Duce says: “Gartmore has a number of strong senior managers on the European team with whom we would have no problem investing.
“I think Rambourg can return to the industry once this as all sorted but I would be surprised if it was with Gartmore.”
Rambourg holds around 3.9 per cent of Gartmore’s shares and Patel says he is likely to hold on to them.
A Gartmore spokesman says Rambourg does not have share options and that lock-up terms on his equity remain in place.
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