ABBEY National said yesterday it was considering “all the options” for its (pounds) 28bn fund management business in Glasgow – a statement which will further fuel fears that it is about to sell orclose the operation.
Talk has been rife that the bank will announce this month or in January that it does not want to retain Abbey National Asset Managers.
The Herald highlighted back in September serious doubts over the future of ANAM, when it emerged the bank was axing the ambitious Talorcan hedge fund arm.
Asked about the future of ANAM yesterday, a spokes- woman at Abbey National in Glasgow replied: “As part of the (general) review (at Abbey), there is a project under way to determine the way forward for our investment activities. That is still under way. It is an extensive project really – covering all the options. The aim is to find the best way for us to meet the needs and expectations of our customers and investors.”
ANAM employs about 50 front-line fund managers, and some 60 back- office staff. Its presence in Glasgow is vital to the critical mass of the city’s financial sector, and many of the posts are highly- paid.
The fund management division was on Wednesday fined (pounds) 320,000 by the Financial Services Authority for systems and control breaches. It has also suffered from poor investment performance recently.
These factors aside, Abbey National has increasingly favoured outsourcing of asset management to use of its own expertise in specific areas. Industry sources have expressed worries that this has undermined further the economics of the funds business. The top executive posts in Abbey’s asset management division are now in London – more than 400 miles from where the funds are actually managed.
Senior investment industry sources believe that Luqman Arnold, chief executive of Abbey, does not consider ANAM a core business in his drive to strip the bank down to a personal financial services strategy.
Sale of the division might well be nearly as devastating for staff at the fund management business as its closure because any buyer would seem likely to attempt to run the funds using its own personnel.
