Tough task to match Rough

By PATRICK HOSKING
Updated:

 

TIM BREEDON, who was named as successor to one of the bestknown faces in the City, said: 'DAVID Rough will be a tough act to follow.'As investment director of Legal & General, Rough has been ubiquitous, whether predicting the likely course of the Footsie or - most recently - standing up to the Government over its treatment of Railtrack shareholders.

He joined L&G from Royal Insurance in 1989 and stepped up to his current position in 1991. Over the next 10 years he helped build funds under management from £18.5bn to £113bn. Asset management profits rocketed from £2m to £62m.

As chairman of the Association of British Insurers' investment committee, Rough has often been outspoken as he defended the interests of the big institutional shareholders. His success has been helped by his ability to communicate complex financial ideas simply and a willingness to call a spade a spade. 'I'm knackered,' was his blunt explanation for his decision to quit.

Rough - in sharp contrast to most publicity-shy fund managers - has been prepared to put his head above the parapet, speaking publicly about Marks & Spencer and other underperforming companies. L&G usually appears as a top 10 shareholder in most British blue-chips.

Last year he slammed British Telecom for its failure to communicate with the City. The tactic worked: BT responded with a new chairman and a new strategy. He sees his public pronouncements as necessary when companies refuse to heed behind-closed-doors warnings. 'There is a greater readiness to go higher profile on a when needed basis,' he said.

Breedon, by contrast, is an unknown quantity, famed more for his brainpower than his communication skills. 'He's an intellectual giant,' according to one of his colleagues. As well as a degree from Oxford, he went on to collect an MSc from the London Business School after a spell at Standard Chartered. Now 43, he joined L&G in 1987 to develop the then-fledgling tracker fund business just as indexed funds started to take off.

Index funds under management mushroomed from £50m then to more than £65bn today. L& G manages tracker investments for more than 2,000 UK company pension funds. 'Tim has been responsible for bringing in around a billion pounds of new business a month. He's been the driving force behind the index business,' says L&G.

A colleague who knows both men says they are very different personalities. 'While David is ebullient and jokey, Tim's more cerebral - you get the feeling he's thinking a lot.'

Breedon's elevation may explain the abrupt departure of Peter Knapton, Rough's number two, three months ago. Knapton, head of the active fund management business, suddenly quit after seven years, saying his and L&G's objectives were 'divergent'.

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