Edinburgh Fund Managers makes 22 redundancies

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Edinburgh Fund Managers has laid off four fund managers and 18 other employees, totalling 10% of its workforce, as the final measure in its bid to cut costs in the wake of falling assets under management.

Iain Watt, chief executive of Scotland-based Edinburgh Fund Managers, said the job cuts would be effected through redundancies and natural wastage. In addition to the four fund managers, four other people in the 64-strong fund management division, with secretarial or client liaison responsibilities, have lost their jobs.

The remaining 14 staff were involved in administration and business development. Carol Haddow, who has been responsible for institutional marketing, will now take on additional responsibility for the management of distribution partnerships, which until now has been run without an overall head.

Watt said the job cuts were the final step in his efforts to give the firm a leaner cost structure. Other measures have been to reduce marketing with other efficiencies, such as reduced travel, thrown in. The total effect will be to cut 5m (€8m) from the annual cost base. This year's total costs will be around 30m. The staff cuts account for 1.4m of the savings.

Fund management companies have been looking at costs following the decline in world markets this year. Edinburgh Fund Managers has also lost institutional mandates and retail funds because of its performance, which has been significantly below that of its peers in the last 18 months. The firm was slow to unwind its holdings of technology stocks after March 2000, the height of the technology boom.

Watt said performance had improved since the terror attacks on the US on September 11: &quotWe put quite a lot of cash back into the market after the market had fallen and benefited from the subsequent recovery. We are now looking for markets to improve over the next two years, hoping that consumer confidence will rebuild.&quot

A key area for the firm will be funds of funds, Watt said. Earlier this year it acquired Portfolio, a firm specialising in funds of funds, and has just hired Mark Harris from HSBC Asset Management to run the operation. Of the total 5m annual cost savings Watt has made, 2m relate to Portfolio.

Open-ended mutual funds, private clients and venture capital will constitute the firm's other main areas of focus, Watt said. The UK will continue as its main focus, although he is prepared to make &quotfill-in&quot acquisitions where the opportunities arise and the strategic fit is clear.