The biggest multi-manager investor in Gartmore’s European Absolute Return fund has sold its entire holding following the fund manager’s suspension of Guillaume Rambourg, one of its top traders.
Insight Investment’s Steve Waddington and Mike Pinggera have sold their position in the Ucits III vehicle due to uncertainty about Gartmore’s investigation into “directed dealing” on the fund.
About 3 per cent of their range was held in the fund, with about 16.4m units held – the equivalent of approximately £18.2m. This included roughly 4 per cent of their £244m Diversified Target Return fund – the biggest institutional investor in the Gartmore fund, according to Bloomberg data from February 26.
Mr Waddington said: “What we are waiting for is the outcome of the review – we have taken the money out. We have been very upfront with Gartmore, and they have been very open with us.”
He said a decision would not be made on whether the Insight funds would buy in again until after the investigation.
The Insight blow comes after Hargreaves Lansdown cut the European Absolute Return fund from its Wealth 150 buy list.
Ben Yearsley, investment manager at Hargreaves Lansdown, said: “While we have no reason to disbelieve Gartmore, or to believe the situation is worse than presented to us, the reality is the facts are still to emerge.”
Robert Burdett, co-head of Thames River Multi-Capital, said he would avoid the fund as long as Mr Rambourg was suspended.
“There is still a suspension in place, so until that is resolved, there is more of a story to develop,” he said.
Skandia Investment Group – which has £150m invested in Gartmore funds across its range of multi-manager products – said: “We will continue to monitor the situation at Gartmore and will not hesitate to take appropriate action if it is necessary.”
However, fellow multi-manager investor in the fund, Margetts Greystone Cautious Managed fund, was also holding fire. It has 5 per cent of its £35m portfolio in the fund.
Toby Ricketts, investment director at Margetts, said: “This has caused some concern but it is not an FSA suspension. Therefore at this stage we feel it would be a bit knee-jerk if we sold out now.
“We did have a chat about this internally – we have spoken to Gartmore and are happy to wait and see. It doesn’t appear to be insider dealing or front-running, which are the two activities we would be most concerned with.”
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