Key UK fund manager quits

Legal & General's influential and outspoken fund manager David Rough has decided to retire early.

Rough is widely seen as one of the City of London's key investors, managing funds invested in some of the UK's largest companies.

His public criticism of companies failing to communicate with shareholders - particularly in the case of British Telecom - has helped mark a new era of corporate accountability to shareholders.

Mr Rough - largely credited with building L&G's fund management business - is set to leave the company in early December, to take up non-executive directorships.

Funding growth

He leaves L&G with £114bn of funds under management, more than twice the size five years ago.

L&G now ranks as the second largest index tracking fund - managing an estimated £65bn - in the UK behind Barclays Global Investors.

L&G is credited with the aggressive marketing of these funds, a business it now hopes to take into Europe.

"Rough was a highly regarded guy, so there is a loss there," says Craig Burke, insurance analyst at BNP Paribas.

However, Mr Rough is still charting L&G's future: "The next phase of development, which will include boosting our active management team and taking our index capabilities into Europe, requires management, committed for, I believe at least the next five years."

He is set to be replaced by Tim Breedon, currently managing director of index funds.

Emperor's clothes

Last week, Mr Rough estimated that $400bn had been spent in the telecoms boom that reached a peak a year or so ago.

"The market shot up in technologies, because of the fear of what they were missing, because they were going up, and the greed that it was going to go on up for ever. Some institutions, like Legal and General, actually stood outside and said: 'The Emperor has no clothes. These valuations are mad'," he told the BBC's World Business Report.

L&G, which owns 2.5% of Railtrack, has also made clear its displeasure with the UK government over its decision to wind up Railtrack, a move which could leave shareholders empty-handed.