ABN-Framlington in court spat

ASSET manager ABN Amro has won a court order barring its two star fund managers from working for rival Framlington. The High Court injunction is a dramatic escalation in the battle between the two investment houses, which was sparked by Framlington‘s coup in poaching Nigel Thomas and George Luckraft in March.

ABN obtained an injunction on Thursday night but Framlington had the order overturned by Friday lunchtime only on the undertaking Thomas and Luckraft remain on 'gardening leave' until the dispute is resolved through the courts.

The star duo, who managed £1.2bn of ABN Asset Management‘s £1.7bn-worth of retail funds, orginally agreed to complete their 12-month contracts. But on Wednesday they stormed out of ABN‘s City offices citing an 'irrevocable breakdown' due to actions taken by the bank. The Dutch firm strongly denies any breach of contract.

'As we are employing these two managers we feel they shouldn‘t be down the road working in a competitor‘s office' said Nick Wells, product and communications director. But he added: 'There‘s no way they would come back here. We would have to be barking.'

Financial advisers expects an exodus of small investors from the ABN funds. City broker Gerrard immediately told its clients to sell Thomas's UK Growth and UK Select Opportunities funds and Luckraft‘s High Income and Equity Income. Raj Basra, fund analyst, recommended selling 'at the earliest opportunity' due to the lack of experienced management available to step in.

ABN Amro has installed James Cotton, Adam Gray and Dan James, none of whom has experience of solely running a major equity fund, as makeshift managers. But the company said it remains committed to finding 'pedigree replacements' for Thomas and Luckraft.

Framlington plans to make Thomas manager of its £77m Capital fund whilst handing Luckraft several of its UK equity income funds.