UK - Hermes has put restructuring plans involving its Focus Funds business on hold, following the performance slump of one of its funds and the departure of two fund managers.
The result is that the Focus Funds business will remain as 100% owned subsidiaries of Hermes, but the firm said it would look at ways of simplifying the operating structures.
The losses incurred by the Hermes European Focus Fund (HEFF) in 2008 amounted to 27%.
The plunge in performance was attributed to the fact "the activist style of investment has been disproportionately hit during recent market conditions and a number of stocks have been marked down substantially, especially in light of the deteriorating macroeconomic expectations".
In addition, the letter said small and mid cap stocks had been affected more severely than larger cap stocks during the credit crunch.
It also said share price declines had been further exaggerated as distressed hedge funds have de-leveraged and received calls for redemptions, becoming forced sellers.
Meanwhile, John Havranek has been appointed as the new head of the HEFF, following the departure of Stephan Howaldt, CEO, and Wouter Rosingh, managing director.
Havranek will be identifying what changes need to be made to HEFF during the first quarter of 2009. Together with Paul Harrison of Hermes Specialist UK Focus Fund, he will head up Focus Funds going forward reporting to Rupert Clarke.
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