Liontrust shares drop on manager departures

The UK fund management boutique sees a share price fall of some 40% following the news that its key managers are leaving

Morningstar.co.uk Editors 13 January, 2009 | 3:45PM
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The share price of Liontrust Asset Management was down 37.96% as of 3pm following the news that key fund managers at the group will leave next year. The share price of the firm was 76.00p as of late this afternoon.

This morning Liontrust announced its income and growth manager Jeremy Lang, who runs some 80% of the group’s retail funds, as well as its UK manager William Pattisson are to leave the firm on 11 January 2010. Both are also directors of the firm as well as shareholders. Within its retail funds range, Lang runs the firm’s flagship £579m First Income portfolio as well as its £340m First Growth fund while Pattisson manages Liontrust Focus 350 and Liontrust First Large Cap.

Lang is particularly well associated with his income fund, having managed First Income since the mid 1990s using what has been termed the ‘Lang approach.’ The group is looking to recruit replacement managers but some UK financial advisers who buy the group’s funds believe that will be difficult to do. Hargreaves Lansdown has pulled the portfolios from its recommendation list while Chelsea Financial Services managing director Darius McDermott said: “I am astounded by the news. Lang and Pattisson are part of Liontrust's DNA; their signature investment process has not only become the sacred writ of the company's approach to asset management but commanded the faith of the IFA community and institutional consultants. What to many in the industry has become "Langtrust" will be no more.”

The company had been said to be in talks concerning a potential buyer, having received an approach last year but it has since been reported these talks have terminated. Meanwhile speculation continues over the eventual ownership of fellow asset management house, New Star. Since the solving of the group’s debt issues at the end of 2008, the troubled investment house run by John Duffield has been reported as having received several offers from potential buyers. So far no announcement has been made.

Expectation of further consolidation in this area of financials was boosted early this month following the £250m all-share deal in which Aberdeen Asset Management will take on Credit Suisse’s asset management arm. In trading today shares in Aberdeen were unchanged as of 3pm, priced at 119.50p.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Liontrust Asset Management PLC454.36 GBX-0.58

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