Investors really freaked out when hedge Gartmore suspended Guillaume Rambourg.We knew there had been an uproar when the fund suspended its star PM, but the magnitude of the freak-out is really unbelievable.
The fund didn’t even lose this guy and investors withdrew £1.1 billion, according to the Financial Times (who say the fund has £23.5bn AUM).
Here’s the backstory: Rambourg is a portfolio manager, Gartmore’s star portfolio manager, he owns 4% of the firm (according to the Times), and he was accused of trying to influence his traders into using specific brokers to execute trades.
Gartmore instituted a fund rule last year that managers should not be involved in selecting brokers. Then Gartmore found out that Rambourg had used Bloomberg’s instant messaging system to IM traders and “direct” trades for nearly a year after their rules on had changed. So they suspended him.
There is no evidence that he received kickbacks from brokers. The only concrete evidence we’ve seen of him “benefiting” from using specific brokers comes from Reuters, who say that some brokers have donated money to Rambourg’s charities. Yet the fund suspended him, which looks really bad for both parties. Rambourg’s reputation went instantly from star trader to trader basically accused of taking kickbacks.
“A number of people said this sounds like this is a little bit too far, too much of a rap on the knuckles,” Jeffrey Meyer, chief executive officer of London-based Gartmore, told Bloomberg.
Yeah, clearly, and it’s also obvious that by “a number of people,” Meyer meant a number of investors, who would likely invest in Rambourg’s own fund if he were to launch one.
Makes you wonder what would have happened if Gartmore lost him. AND why he wouldn’t just leave.