F&C loses 98-year-old trust

FUND management giant F&C was dealt a blow today after it lost control of one of its oldest and largest investment trusts.

The independent board of the £190m F&C Pacific Investment Trust, set up in 1907, has not only drafted in new managers to replace F&C's stock-pickers - but the company also faces the embarrassment of seeing the trust rebranded under the name of one of its main rivals.

Witan Investment Services, which already runs the £1.15bn Witan investment trust, will take over the administration of the new Witan Pacific Investment Trust. The main Witan fund is one of the closest rivals to the £1.8bn F&C Investment Trust, which dates back to 1869.

The shake-up comes in the wake of the split capital investment trust scandal of recent years. Managers invested the schemes in a way that eventually caused many to collapse. Independent boards, charged with monitoring performance of each trust, have since played a more active role.

F&C, which last year merged with fund manager Isis, said it was unfortunate that the board had decided to move the fund's management. 'Admittedly, past performance had been poor up to the time of the merger,' said Jason Hollands, head of communications at Isis.

'But we changed the management in October, bringing in Mike Hanbury-Williams, an Isis manager, and performance has picked up. It's always disappointing to lose a client ? but it's a very competitive industry.'

After a 'beauty parade' of fund managers vied for the contract to run the fund, the board picked two firms - Aberdeen, lead by the well-respected Far East fund manager Hugh Young, and the Singapore office of Nomura.

Witan used a similar 'multi-manager' approach to shake up the performance of its own funds last year. The changes are still subject to approval by investors.