manager of special situations fund looks to take former employer to industrial tribunal
Patrick Evershed, manager of the AA-rated Rathbone Special Situations fund, has left the company and is seeking an out-of-court settlement with his previous employer.
The £29m fund is to be taken over by Carl Stick, manager of the Smaller Companies, Capital Growth and Income funds. Evershed, who ran Special Situations since 1991, is seeking legal advice and is considering challenging the company for constructive dismissal. He is retaining the services of employment lawyers Fox Williams and said it was likely the case would go to an industrial tribunal.
The fund has increased its liquidity to meet expected redemptions. It now stands at around 10%, from a typical level of 5% under Evershed's stewardship. Investors had sold around £3m by the end of last week.
Stick said: 'I understand that this was a specialist fund and people invested in it to get Patrick's expertise. I can't run it as he did but if people look at my performance on the income fund, while his was the top-performing fund, mine was the 10th.'
Evershed joined Rathbones from Framlington, which he left under similar circumstances. He took the company to an industrial tribunal for unfair dismissal and won £42,000 plus £12,000 costs, with a further, smaller payment, when the company made it clear it would not re-employ him.
Stick stresses that changes are being made to the fund and it is important he stamps his authority on the portfolio. The main change will see the fund focus exclusively on UK investments. Stick said: 'My expertise is in the UK market and that is where I am looking to invest the fund. The portfolio had some quite esoteric holdings overseas and I do not have the resources or knowledge to invest in overseas companies.'
At the end of January, the fund had 12.5% in overseas exposure and Stick said he plans to phase these out altogether. Other holdings included 1% in FTSE 100 stocks, 6% in FTSE 250, 26% in FTSE Small Cap and 47% in FTSE Fledgling and Aim companies.
Stick said the company had not yet considered renaming the fund or changing its sector but the portfolio would now be focused on UK recovery situations.
He added: 'There is a balance between getting the fund into a form that suits my style of running money and making sure it is run efficiently. I don't want to destroy the fabric of the fund but I need to be investing in stocks that I understand.'
The fund is ranked second out of 243 for the three years to 31 December 2001 and fifth out of 205 over five years to the same date. It was the top-performing UK Equity unit trust fund in 2001 and was also the top performer for the year in the UK All Companies Sector, achieving 13.1`%, outperforming the sector index by 27.06%.
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