Two senior Pioneer executives resign after legal dispute

The largest asset manager in Dublin, Pioneer Investments, has said that two star bond managers in its Dublin operation have resigned after the company took legal action last month amid claims they were planning to set up a rival firm.

Tanguy Le Saout, head of European fixed income, and Ali Chabaane, head of portfolio construction, have resigned with immediate effect, the asset management group said on Saturday.

The High Court heard on Friday that Mr Le Saout and Mr Chabaane had lost entitlement to deferred payments of €6 million and €2 million, respectively. However, the financial terms of their departure is not known.

The Irish Times first reported on Wednesday that both men had been suspended.

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In court documents, Pioneer claimed the alleged activities of the defendants had potential to cause "very serious harm" to the company, particularly as its parent, Italian bank UniCredit, is seeking sell the unit.

Earlier in the week, UniCredit said it had entered exclusive talks to sell Pioneer, which has €225 billion of assets under management and has housed its European investment base in Dublin since 1998, to French asset manager Amundi, in a deal said to be worth about €3.5 billion.

Pioneer said in court documents its information suggested the defendants’ planned rival firm had a business plan to have €5 billion in assets under management by year five.

The fund manager said the two bond managers will consent next week to High Court orders that redress any advantage they might have obtained due to their conduct in seeking to set up a competing business.

Pioneer said that two Pioneer human resource officials named as co-defendants in the case, Ciara McCarville and Mary Fitzpatrick, have also resigned with immediate effect.

“Any actions that violate our corporate values and trust, loyalty and teamwork must be responded to, irrespective of the circumstances,” said Giordano Lombardo, chief executive and chief investment officer at Pioneer. “We have taken decisive action in this instance in order to protect our commercial best interests and have ensured that no client assets were adversely affected and no compliance breaches took place.”

Following the resignations of Mr Le Saout and Mr Chabaane, Cosimo Marasciulo, currently head of European government bonds, will become head of European fixed income, and Declan Murray, currently global chief of staff for investments at Pioneer, will “provide guidance and leadership to the portfolio construction team,” the company said.

Some of the defendants, in affidavits, accepted during legal proceedings that they were planning to operate in competition to Pioneer but they denied any breach of fiduciary duty or contractual obligation to their employer.

Addressing concerns by the defendants that some 80 per cent of Pioneer's 473 staff in Dublin may be at risk of losing their jobs as a result of its sale, Ms Justice Leonie Reynolds said on Friday the court could not be asked to speculate on what happened in relation to the outcome of the sale.