Vontobel Shares Fall 11% After Star Manager Rajiv Jain Quits

  • Firm says Jain's deputy Matthew Benkendorf to succeed him
  • Jain was `bedrock of the firm's success' for past 22 years

Vontobel Holding AG plunged the most in 14 months after the resignation of Rajiv Jain, the chief investment officer and star money manager at the company’s asset-management unit in New York.

Jain will leave the unit, which oversees $48.1 billion, at the end of May “to realize his own entrepreneurial plans,” Zurich-based Vontobel said in a statement Monday. He will be replaced by his deputy, Matthew Benkendorf, who will take charge of Vontobel’s Quality Growth investment strategies.

Rajiv Jain

Source: Vontobel Holding AG

Vontobel’s shares fell as much as 11 percent, the most since January 2015, and were trading at 41.25 Swiss francs at 10:38 a.m. in Zurich trading. A 10 percent outflow of funds from the unit would reduce the asset manager’s profit by 5 percent to 8 percent, according to Peter Casanova, an analyst at Kepler Cheuvreux.

“We believe related outflows will be manageable and would see any harsh share-price reaction as a potential opportunity,” Casanova wrote in a note to clients. “The division generates below-average profitability.”

Jain is the manager of the $9.4 billion Virtus Emerging Markets Opportunities Fund, which outperformed 99 percent of peers over the past five years, according to data compiled by Bloomberg. Jain was the “bedrock for the firm’s success over the past 22 years,” said Axel Schwarzer, head of Vontobel’s asset-management business.

Rebeca Garcia, a spokeswoman for the Vontobel Holding, declined to comment further on the impact of Jain’s departure, or on his future plans.

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