EXCLUSIVE

EDINBURGH investment house Ivory & Sime, stung by a rash of key departures earlier this year, has suffered another body blow with the poaching of its European investment ''guru'', Peter Hadden, by life office Scottish Equitable.

Mr Hadden managed Ivory & Sime's European Assets Trust, a Dutch-registered investment trust with total assets totalling about #117m.

Along with Mike Woodward, manager of Ivory & Sime's #82m Continental Assets in-vestment trust, he formed the backbone of the fund management house's European equities desk.

Scottish Equitable's recruitment of Mr Hadden was confirmed by a senior insider at the life office yesterday, who said the European investment specialist had not had the opportunity to hand in his resignation to Ivory by yesterday afternoon. Ivory's executive chairman, Sir David Kinloch, last night declined to comment on Mr Hadden's impending departure or on the issue of who would replace him.

Mr Hadden's defection represents another major setback for Ivory.

Its former managing director, Colin Hook, was forced to fall on his sword in February after a rash of senior resignations.

Ivory lost its business development director, Gordon Neilly, as well as John Dodd, the highly-rated former head of its smaller companies investment desk, and Mark Tyndall, its erstwhile head of UK equities.

Smaller companies fund manager Derek Stuart and development capital specialist Lindsay Whitelaw went with Mr Dodd and Mr Tyndall to set up their own investment house.

Ivory has now filled most of these gaps, only to be hit by Mr Hadden's decision to defect.

Mr Hadden has been poached by Scottish Equitable as part of the Edinburgh-based life office's well-flagged campaign to boost the funds it manages for third parties such as corporate pension schemes, as opposed to the #13.5bn of funds under management generated by sales of its own pension, investment and life products.

It plans to increase third-party funds under management from less than #1000m to between #2500m and #3000m within four years.

As head of European equities for Scottish Equitable, Mr Hadden will be in charge of more than #1000m of funds.

Scottish Equitable, which has seen its European Tactical Unit Trust out-perform the average European unit trust by 6.7% over three years, now plans to launch a number of more specialist European funds.

These will be used as the bait with which to entice pension fund money away from other fund management houses.

Scottish Equitable has experienced considerable success in poaching senior personnel from Edinburgh's independent investment houses in recent months.

It has recruited Neil Smeaton, former manager of Edinburgh Fund Managers' #356m American Trust (now renamed Edinburgh US Tracker), as well as his former number two, Elaine Heaton- Armstrong.

It has also taken Ivory's chief dealer, Adrian Fitzpatrick, in its efforts to build up its own in-house dealing capability.

The net asset value of European Assets Trust out-performed its benchmark FT/S&P Actuaries Medium-Small Cap Index for Europe (ex UK) by 4.3% during the three years to April.

Mr Hadden did particularly well during the trust's 1996 financial year - pushing the fund's sterling-adjusted net asset value up 10.4% during a period in which the benchmark index gained just 3.1% in sterling terms.

One City investment trust analyst said: ''It (European Assets) has actually been quite a successful performer.''

He added that Mr Hadden's impending departure could not be good news for Ivory & Sime.

Mr Hadden has worked on Ivory's European investment desk for about seven years. Before that, he was investment director of a joint venture between Ivory and Japan's Sumitomo Trust and Banking.

Ivory last week announced that its funds under management had fallen by #1100m to #3200m during the 12 months to end-April. Though annual profits increased by 5.5% to #6.89m and investment performance continued to improve, it warned profits were likely to fall in its current financial year.

Scottish Equitable is maintaining an overweight position in Continental European equities.

It has not been scared off by market uncertainty created by the victory of Lionel Jospin's socialist coalition in the French elections, and the high-profile row in Germany over plans to revalue gold reserves to meet entry criteria for European monetary union.