Equity Lures Richards to EFM
Equity incentives played a significant part in tempting Anne Richards to become chief investment officer at Edinburgh Fund Managers.
She has decided to quit as senior investment manager at Merrill Lynch Investment Managers in a move mirrored by many other managers.
One investment banker says: "Partly thanks to recent tax changes, the cult of personal equity is here to stay. Big firms will have to rethink their position."
Iain Watt, EFM chief executive, says: "We've been able to improve our gene pool by offering equity incentives to both Anne and Robert Waugh, who recently joined from Phillips & Drew."
Watt says that his team currently has access to shares equivalent to 13% of EFM's equity. "I'd been happy to see the total lifted to 25%."
Elsewhere, EFM has recruited Mark Harris from HSBC Asset Management as head of its fund of funds business. It has hired several marketers keen to find new processes to promote.
Watt says that some equity options involve the issue of new shares. But most will be secured from an employee share-ownership pool which EFM has built up through purchases in the market.
Roberts is set to replace Mike Balfour, who was sacked as EFM chief investment officer after presiding over a string of poor performance numbers.
Elsewhere, star managers Dino Fuschillo and David Urch have quit SG Asset Management and MLIM respectively to join Edinburgh-based Martin Currie.
Fuschillo says that his decision to move related to the fact that he only had an economic interest in 1% of the action at SG. Currie made a much better direct equity offer.
Adrian Frost recently quit Deutsche Asset Management to get shares in Artemis. A stream of individuals have decided to part-own hedge funds.
Nigel Thomas and George Luckraft recently left ABN Amro Asset Management to join London-based Framlington.
Framlington co-leader Craig Walton says an offer of equity was important in persuading the managers to come on board. "Our old scheme, which gave managers 18% of the action, was recently cashed out.
"We now have a new scheme and the ability to use it to hire expertise."
The investment banker says that the offer of long-term direct equity incentives had become more popular in the UK as a result of capital gains tax reforms. These have reduced the tax payable on employee options to as low as 10% over time. Direct equity incentives are also popular with managers because they enhance their influence over company, or divisional, decision-making. …