Stock analysts are putting the thumb screws on Gartmore for more details on the suspension of star manager Guillaume Rambourg, as they caution shareholders of damage to the firm's franchise and assets.
Gartmore said yesterday Rambourg was suspended "pending the outcome of an internal investigation in relation to breaches of internal procedures regarding directing trades".
The asset manager's share price plummeted 31% on the news but started to rally by 8.2% today to 125.5p.
Philip Middleton, research analyst at Bank of America Merrill Lynch, suspended his recommendation on Gartmore overnight, and says he cannot form a view on the firm without further information on Rambourg's suspension.
Middleton writes: "We would first need to know what Rambourg is being investigated for precisely, and what the results of the investigation are."
He warns 10% to 20% of Gartmore assets could be affected if there is a "highly adverse outcome" to Gartmore's own investigation.
"Any damage beyond assets Rambourg and Roger Guy run would arguably be irrational, but it is in our view a scenario worth at least considering," he says.
Middleton adds Guy would still be able to retain assets without Rambourg beside him but could not quantify how much he might retain.
However, he says if Rambourg can start work again quickly, it would be "business as usual" for the group.
Canaccord analyst Katrina Hart says the downside risk on Gartmore's shares is unquantifiable, and changed the group's recommendation from 'hold' to 'sell'.
She says: "This event highlights the dangers of fund management models that rely heavily on key individuals, but Gartmore is currently the most obvious offender in the listed space. The risk of redemptions from Gartmore's funds is likely to extend beyond those managed by Rambourg."
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