Rensburg: We didn't break rules in BoS appointments

Published on Sunday 25 October 2009 20:17

RENSBURG Sheppards chief executive Stephen Elliot has denied the company breached confidentiality agreements when it poached a team of private client bankers from Bank of Scotland.

Lloyds Banking Group is understood to have threatened the Leeds-based group with legal action over the defection of eight managers, claiming breaches of contracts signed when Rensburg was looking at buying portfolios managed by the bankers.

However, Elliot said yesterday that the company had not acted illegally and was confident of its position.

"We don't feel there's been a breach of any contracts."

Elliot said Rensburg held preliminary discussions with HBOS about buying private client portfolios back in 2008, although the talks came to nothing. The sale was shelved by HBOS ahead of its takeover by Lloyds TSB.

Earlier this, year Elliot said the company was approached by a headhunter representing the investment managers, which led to the switch, with Rensburg never engaging with Lloyds about a sale.

"A headhunter approached us, we didn't engage anyone," Elliot said.

Lloyds sold 1.27 billion in assets under management to Rathbone last week, a deal which included 775 million in BoS private client funds.

Elliot declined to predict how many of the approximately 4,000 BoS clients covered by the sale would follow their former managers to Rensburg, but said the deal could be of huge significance to its Scottish business. "This could be quite transformational for us to move the business forward," he said.

Rensburg has had an office in Glasgow for around 20 years. It opened an Edinburgh base in 2008 headed by Fenella MacLean, with the board targeting the city as part of an expansion plan.

It now manages just under 200m in assets in Scotland, with around 2,000 clients.

Lloyds agreed to offload portfolios of private client funds to Rathbone, despite the blow caused by the defection of wealth managers to Rensburg.

Lloyds expects to raise about 35.4m from the sale of private client funds.

It is hoped 6,000 customers with a total of 1.27bn of funds under management will transfer to Rathbone from Lloyds TSB private banking and Bank of Scotland portfolio management service (PMS).

However, Rathbone will only pay for the BoS assets – 775m of funds under management for 4,000 clients – if, and when, they are all transferred.

Rathbone is concerned that clients will follow the eight former BoS portfolio managers who have defected to rival firm Rensburg in Edinburgh, as revealed in The Scotsman last Thursday.

Numis Securities, a broker, said it would not expect anywhere near 775m, because of the senior team members who have left BoS and "natural attrition" in such deals.

Rathbone will pay 2.4 per cent of the total BoS assets which are transferred when clients sign up.

A spokesman for Lloyds declined to comment.