Liontrust rocked by Lang and Pattisson resignations

Liontrust has been rocked by the resignations of Jeremy Lang and William Pattisson.

Lang, manager of Liontrust’s First Income and First Growth funds, and Citywire A-rated Pattisson, manager of its First Large Cap and Focus 350 funds, are authors of the company's distinctive investment process.

Liontrust said the two directors would remain with the firm until January 2010 ‘in order to ensure an orderly handover of their functions and responsibilities'.

The news hit Liontrust shares which fell 43p, or 35%, to 79p.

Broker Cazenove said the move was ‘a remarkable development by any standards’.

‘Quite why these key managers should have announced their resignation while the company is still in talks with potential acquirers is not clear but can hardly be conducive to a successful outcome, in our view,’ said Rae Mailie.

Cazenove said it was not changing estimates but that ‘in due course it seems likely we will have to’.

Lang and Pattisson were the two founding managers at Liontrust and developed the firm's investment process, based on 'The Lang Approach' -  that if a company surprises on the upside, it is likely to do so again, and the 'Large Cap Process', that companies with rising expectations should not be sold too soon.

Liontrust will retain the right to the investment processes, but Cazenove said it was unclear whether it would carry the same weight if carried out by other managers.

'Whether a new manager could be found with sufficient standuing and credibility to appeal to consultants, but insufficient self belief in their own ability to be willing to run money according to someone else's startegy is unclear,' said a Cazenove broker note.