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05 Mar, 2008

By Dylan Lobo | 7:00:00 AM | Wednesday, March 05, 2008

AXA Framlington has said its star fund managers remain locked into the firm after last week's shock defection of Roger Whiteoak.

The stable includes the respected duo of George Luckcraft and Nigel Thomas, who signed deals in 2002 tying them to the firm for five years. These lock-in periods were extended when AXA acquired Framlington in 2005.

At the time of the deal, AXA said it would not interfere with the investment process at Framlington. However, it is understood that should AXA wish to override the investment process employed by a certain manager they will be given a 30-day notice period and be able to take their incentivisation scheme with them.

But AXA Framlington confirmed Luckcraft and Thomas, along with the likes of Richard Peirson and Deane Donnigan, remain locked in. A spokesperson for the group said: 'The lock-in mechanism remains in place and is working well. It continues to provide a full incentive to the fund management team.'

This reassurance comes after Whiteoak left the firm last week following a tricky spell. While his long-term track record on his £154 million AXA Framlington UK Smaller Companies fund is strong - it has been top quartile since its 2001 launch - he has struggled in the short term.

In the two years to the end of January his UK Smaller Companies fund has lost 10.1% versus a peer group average gain of 0.5%.

Chris St John, who joined the firm in 2005 from F&C, has been appointed lead manager on the fund and has also taken on Whiteoak's Throgmorton investment trust.

The departure of Whiteoak has also forced Skandia to make a change on its UK Best Ideas fund. The 10-stock portfolio Whiteoak ran on the fund has been handed on to St John for the immediate term, although there is a chance Axa Framlington could lose the mandate

A spokesperson for Skandia said: 'We are confident that St John and the rest of the AXA Framlington small cap team have got good knowledge of the stocks Whiteoak ran for us. Over the longer term our investment research team will be assessing their performance, along with the strength of the team on our reserve list, before making a decision on what to do with the portfolio.'

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