views

Top manager in Gartmore investigation

GUILLAUME Rambourg, the high-flying European equities fund manager suspended by Gartmore for breaching the firm’s internal trading procedures, is no stranger to controversy.

Rambourg and a former Gartmore analyst, Vanni Vecchini, were fined €300,000 (£267,280) by the Italian financial regulator in 2006 for buying stock in Banca Italease with his hedge fund ahead of a positive analyst note.

A separate Financial Services Authority investigation is understood to have found Rambourg and Vecchini in the clear. Gartmore is currently appealing Rome’s decision.

Yesterday’s internal probe into Rambourg’s trading does not relate to the 2006 case. Gartmore said it did not relate to the FSA’s large insider trading operation involving employees of Deutsche Bank and Moore Capital, nor did it relate to the husband-and-wife case involving banker Christian Littlewood.

Last night, an individual close to Rambourg described the timing of his suspension over irregular trades as a “horrendous coincidence”.

Gartmore’s internal rules restrict fund managers from executing trades themselves. Orders to buy or sell a stock have to be sent to a main “pool” to be carried out by a separate team of specialists. It is understood Rambourg’s alleged breach involved trades made outside the usual system.
Gartmore is said to have identified the situation in the past few days. It alerted the FSA, although the regulator is not involved in the internal investigation.

Few people have been hurt as much as Rambourg by the slide in Gartmore’s share price as rumours swirled of an insider trading swoop. The 38-year-old Canadian, one of the firm’s key managers alongside Roger Guy, is locked into holding 11.8m shares in Gartmore for another three years. Worth £26m when the company floated in December, they were valued at £13.7m last night.

AT A GLANCE | GARTMORE’S ANNOUNCEMENT EXPLAINED

Q.WHAT IS GUILLAUME RAMBOURG’S ROLE AT GARTMORE?

A.Guillaume Rambourg joined Gartmore in 1995. Brought up in Ottowa and educated at France’s elite ESSEC business school, he enjoyed a meteoric rise and now works alongside European equities boss Roger Guy. The pair run the company’s two largest hedge funds – Alphagen Capella, which has assets of $2.3bn, and Alphagen Tucana, with $828m under management – as well as a range of retail funds.

Rambourg and Guy are essential figures at the top of the Fenchurch Street-based fund manager, accounting for 40 per cent of its revenue. Gartmore’s flotation prospectus said Rambourg’s departure “could impact more heavily on [our] business than the loss of others”.

Q.WHAT IS HE ALLEGED TO HAVE DONE?

A.The nature of Rambourg’s unusual trades was not clear last night, but sources said the investigation was looking at a breach of Gartmore’s systems rather than a case of insider trading. The City watchdog is aware of the situation but is not looking into it.

Q.WHY HAS GARTMORE’S SHARE PRICE FALLEN SO STEEPLY IN THE PAST WEEK?

A.Market rumours linked the asset management house to recent FSA insider trading operations. Gartmore insists this is not the case and Rambourg’s case is unrelated to the large-scale insider trading ring involving Deutsche Bank and Moore Capital staff.