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Investec fund managers to get profit-share scheme

Investec Asset Management is believed to be planning a direct profit-share arrangement to offer incentives to and retain senior staff and fund managers.

The arrangement is expected to be announced by the end of the year and will be a direct profit-share in the asset management business, ringfenced from the profits of South African owner Investec Bank.

Contrarian investment guru Alistair Mundy is among the high-profile managers who would benefit from the scheme. It is not known if the firm’s salesforce is included in the plan.

Unlike offering equity stakes in a business, which may fall as well as rise, a direct profit-share arrangement allows fund managers and senior staff to share instantly in the firm’s success. New Star fund managers, by contrast, must hold some of their equity stakes until 2009.

The news is likely to please IFAs frustrated by continued fund manager moves dogging the industry.

Recent departures from Credit Suisse, Gartmore, Jupiter and SVM have led to industry commentators calling for more to be done to stem the tide.

Ark financial planning director Phil Perry says: “Fund managers moving all over the place can be frustrating for IFAs and it clouds consumer judgement. Provided it is done in the right way, a profit-share could be a good way of keeping the best people on board.”

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