'Everyone to blame' for split woes

THE man at the centre of the split capital investment trust disaster said everyone was to blame, including the investors who lost money. Martin Gilbert, chief executive of Aberdeen Asset Management, the biggest player in the split cap market, said it was 'everyone's fault to a certain extent' and that with hindsight it was 'blindingly obvious' the trusts were overgeared.

'People who invested, people who launched the funds, the banks who lent the money - we were all at fault,' he said. However, there was no mis-selling, said Gilbert, whose company manages about £2.3bn in 19 splits, including seven which are in trouble.

Aberdeen has waived fees on eight trusts, including seven splits, in a move which will cost an annual £4.5m in lost income.

It held the interim dividend at 3.85p a share as it reported a rise in pre-tax profits before one-offs and goodwill write-offs of £22.2m in the six months to March, up from £20.2m last time. Earnings per share slipped 6%.

The figures came as investors were preparing to meet solicitors Class Law today to discuss suing Aberdeen and others involved in the split industry.

Thousands of investors in splits, highly-geared investment vehicles which separate income and capital returns, are nursing heavy losses because of falling share prices and worries over the cosy network of cross-shareholdings between trusts.

Gilbert played down the Financial Services Authority inquiry into the industry, which he described as a fact-finding exercise. 'They have been to talk to us once. We're waiting for them to come back,' he said.