Gartmore hit by £1.2 billion outflows after Rambourg suspension

Outflows at fund management group Gartmore rose to £1.2 billion in the six weeks since the suspension of star manager Guillaume Rambourg, it has been revealed.

Gartmore today announced its first quarter results to March 31, which showed assets under management increased by £1.3 billion or 6% to £23.5 billion by that date.

Loss of momentum

However, Rambourg was suspended on 30 March and Jeff Meyer, the chief executive of Gartmore, said the fund management house took the decision to reveal up to date losses in a bid to soothe investors and offer 'further transparency.'

He said: 'The business performed reasonably well during the first quarter, however more recent events have caused a loss of momentum.'

Meyer said it would take around six months before Rambourg is re-instated to fund manager status at the company. He is currently working as an investment analyst. 

Meyer explained: 'It's going to be several months before Guillaume returns [as a fund manager]. We won't apply for fund manager status for a couple of months...and some people says the FSA process of approval also takes two to three months. It's unclear how long it takes in this environment.'

Around £834 million worth of redemptions in Gartmore occurred in April, with £568 million flowing out of mutual funds and £337 million withdrawn from segregated mandates. A further £380 million was redeemed by hedge funds on 4 May, the monthly dealing date at Gartmore. 

However, Meyer said Gartmore's funds under management were now roughly where they started at the beginning of the year and there was a sharp slowdown in redemptions since Rambourg was re-instated as an analyst.

In fact, Meyer added that a 'significant portion' of the redemptions requests were 'rescinded' upon the news of Rambourg's return to the company.