Equity stakes for fund managers

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As fund managers struggle to prevent defections to hedge funds, top staff are increasingly being offered equity stakes in the companies they work for.

Liontrust is setting up a new European fund management joint venture in an attempt to retain four of its star fund managers, Reuters reports. Gary West and James Inglis-Jones are apparently each being offered a 15% stake in the new venture, while two others are being offered 9.5% each.

Liontrust chief operating officer Vinay Abrol, told Reuters the move was down to the lure of the alternative investments sector: "It's a question of how you attract someone when they could just as easily set up a hedge fund somewhere else."

The tactic seems to have worked over at Gartmore, where fund manager Tim Callaghan, who was set to leave the firm to join rival Resolution Asset Management, decided to stay with Gartmore after being made an offer he couldn't refuse. Reuters says that Callaghan was made a partner in the firm, and granted equity in the business.

And in a similar move, Reuters reports that Scottish-based fund firm Martin Currie has set up a new company, which will be half owned by two of its China fund managers, Chris Ruffle and Shifeng Ke.