In November last year, the regulator announced it was probing R&M and three other asset management firms – Artemis, Hargreave Hale and Newton – for breach of competition law after allegedly sharing details of their bids in one initial public offering and one placing.
R&M said in its interim financial report for the six months to the end of December, published today, that while the outcome of the investigation is still uncertain, the board believes it “prudent” to put aside £1m as a provision.
This will be funded by a £500,000 reduction in directors’ variable remuneration leading to a net impact on profit before tax of £500,000.
R&M said it has “cooperated fully with the matter and [is] pursuing a robust defence”, noting the FCA’s findings are provisional and may not necessarily lead to an infringement decision.
It reiterated the matter does not affect any clients or the net asset value of any fund or segregated mandate.
R&M chief executive Mike Faulkner also used the firm’s half-year results to refute claims that the sudden and shock recent departure of Philip Rodrigs (pictured) over a professional conduct matter represented a cultural issue in the firm.
Rodrigs, who was lead manager on three R&M UK funds, was sacked last month following “an investigation into a professional conduct issue”.
The issue was flagged after the firm implemented more stringent risk systems following the FCA’s investigation.
Faulkner said the reaction from clients over Rodrigs’ departure had been “understanding and measured”, but questions have been raised over whether it had stemmed from a cultural issue within the firm.
He said: “Every business will suffer issues such as these, even great firms. The test of a business is not its avoidance of them – which is impossible – but rather the way it navigates them when they arrive. The strength of a business to deal with such issues is influenced significantly by the quality of its culture and the unity its people can demonstrate in working through issues.
“We take our culture and conduct very seriously. It is critical in a business model where we are focused on helping clients fully understand their needs and then solving them. As a result, when we encounter threats to these areas our approach is to deal with them decisively and openly.
“This is important in a business that is based on openness and transparency with its clients and its people. But a consequence of this approach is that it is very clear to everyone when an issue has arisen. There is little we can do about this – the alternative is far worse for the long-term success of the business.”
