Split bosses: 'We're losers too'

TO the thousands of investors who have seen their life savings vanish, it may sound a bit rich. But the multimillionaire bosses behind the long-running split capital investment trust scandal are now complaining that they, too, are losers

Chris Fishwick, lead fund manager at Aberdeen Asset Management, the biggest operator in the sector, and Tony Reid, owner of Britain's second-biggest provider of splits, BFS Investments, claim to be out of pocket as a result of the crisis.

Split capital trusts are investment trusts that have two different types of shares. One class receives all dividend income on the investment and another benefits solely from rises in the capital value of investments. Split capitals were widely marketed as safe investments but have come under severe pressure in the market slump.

Last week, another split capital trust, Aberdeen High Income, called in the receivers. It had been managed by Fishwick since 1994.

Fishwick can afford to take a financial hit more comfortably than many who put money in his funds. He earned almost £5m last year and is guaranteed a further £1.4m in bonuses - half payable in shares - simply for remaining a director of the firm for another year.

According to Aberdeen, Fishwick had lost more than £2m from his own investment in split trusts. Fishwick has been a large investor in all of the funds he manages,' an Aberdeen spokesman said.

Reid, speaking from his holiday home in Barbados, said he and family members had also lost cash after shares in BFS's Geared Income investment trust were suspended last month. 'I personally had £150,000 in Geared Income,' he said. 'My sister and mother lost money in Geared Income.'

Reid, like Fishwick, has made a fortune from splits. Last year he was paid almost £2.6m in salary and bonuses. He said he expected to earn much less this year and fare 'even worse' in 2003.

The Financial Services Authority is investigating the split capital sector. It believes there may be a 'magic circle' of trusts that invested in each other to prop up the market.

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