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BlackRock to run Eastern European Trust

The board of the Eastern European Trust (TEET) has handed the £86.4m mandate to BlackRock, after removing Pictet as the manager last year following a period of underperformance.

Agne Zitkute, a fund manager at Pictet, ran the investment trust between March 2004 and May 2008. The mandate was then handed to Peter Jarvis, a TEET board member,

Plamen Monovski and Sam Vecht of BlackRock will take over the fund on May 1.

The Eastern European Trust’s chairman, Hugh Aldous, said in a statement to the stockmarket that a challenging economic backdrop in the region, coupled with the manager’s unsuccessful stock selection, cost the trust a 14% fall against the benchmark.

Net asset value (Nav) per ordinary share fell from 366p to 118p over the year to January 31, 2009. This is a fall of 67.7% in sterling terms compared with a benchmark decline of 53.9%.

Pictet has issued a statement saying: “Naturally we are disappointed with this decision after a long and fruitful relationship dating back to 1994 when Pictet conceived, sponsored and launched the trust.

“Eastern European markets have suffered worse than any other markets in the past year and this has much reduced the returns Pictet’s managers had achieved for shareholders over the previous fourteen years.

“Given the long-term economic outlook for the region, we believe shareholders will enjoy strong returns once the current turmoil subsides.”

Meanwhile, Aldous has announced he will step down as chairman of the TEET board after its annual general meeting on June 24. He will be succeeded by Neil England, a board member.

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