ABBEY National is axing its ambitious Talorcan hedge fund business – raising serious doubts about the future of its wider (pounds) 28.9bn asset management operation in Glasgow.
It shied clear last night of declaring a long-term commitment to retaining a heavyweight Glasgow-based fund management business when pressed on this issue by The Herald.
Abbey National Asset Managers (ANAM) is crucial to the health of the financial sector in Glasgow, and it is a big player in a wider Scottish context.
Staff have been told in recent days of Abbey’s plans to axe Talorcan, which manages (pounds) 120m of external funds and, according to insiders, had looked after significantly more again of internal Abbey funds.
However, the bank made no public statement and The Herald learned of the move from an insider.
An Abbey spokeswoman last night admitted 13 people were “at risk of redundancy”.
She refused to comment on individuals but sources say the highly- rated Scott Jamieson, who masterminded the formation of Talorcan in 2001 with long-term ambitions to build a business with (pounds) 1.5bn to (pounds) 2.5bn of funds, will likely leave.
Asked about the bank’s commitment to asset management, the Abbey spokeswoman said: “We are at the beginning of a fundamental transformation where all the businesses within Abbey National are subject to review, and measured against the value created for all our stakeholders and how they fit within the UK (personal financial services) strategy. ANAM will be part of that review, which is still at an early stage and is likely to take three years to complete.”
ANAM employs 60 front-line fund managers and analysts and 40 back- office staff in Glasgow. Abbey National’s overall life, pensions, and fund management operations employ about 3500 people between Glasgow and Edinburgh.
A director of another big Scottish fund manager said: “It definitely doesn’t look great from the outside – what is going on there. Certainly, in terms of being a mainstream independent fund manager (it) is looking pretty doubtful.”
Another senior Scottish fund manager questioned whether Abbey needed to have its own asset management operation, claiming it could and might make big cost savings by outsourcing this function.
He said: “They (ANAM) are starved of cash. They are starved of the right people. You just wonder why they (Abbey) are in the business. I know, internally, there is a lot of disillusionment (among) staff.”
Abbey National has in recent times being selling through its branches funds run by external fund managers such as Pimco and Alliance Bernstein, rather than its people in Glasgow.
The insider said: “As assets under management contract, so the whole cost base makes less commercial sense, placing the future of ANAM in serious doubt.”
Control of ANAM has been transferred in the last year from Glasgow to London-based executives of Abbey. Colin Mackie, who formerly headed the Glasgow operation and had been with the business for 27 years, was unseated in a restructuring last year.
Responsibility for asset management was taken on by two of Abbey National’s London-based executives, Graham Long and James Bevan.
Carolan Dobson, who was at that stage appointed head of the investment floor in Glasgow but is said to have failed to win over staff, is no longer in this post.
Vanessa James, another London-based executive, has stepped in. This means the top three posts are now all held by people in London.
Sources say Dobson was off sick and has now returned to work part- time.
She remains head of UK and pan-European equities. Abbey said “demands on her time” had meant it was not possible for her to fill this role and run the investment floor.
Dobson manages the Abbey National UK Growth Unit Trust – named in Bestinvest’s “Spot the Dog” guide to poorly-perfoming funds.
The insider said: “In the space of 12 months, the work of Colin Mackie and his team has been wiped out.”
An Abbey spokesman justified Talorcan’s closure by claiming the business did not fit with the strategy of focusing on UK personal financial services because it had international funds and was aimed at wealthy individuals. Money in the (pounds) 41m Global Macro fund, (pounds) 61m Equity Pairs Plus fund, and (pounds) 17m Forex fund will be returned to investors.
