Gartmore is closing its AlphaGen Cepheus Fund and returning money to investors following the departure of Jonathan Sharpe and Tamsin Quayle.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

Sharpe and Quayle, who manage the Cepheus fund, are leaving to set up their own hedge fund business and Gartmore has taken the prudent decision to close the long/short fund, which focuses on European small companies, as it will prove difficult to maintain under Gartmore's strict institutional standard investment criteria.

The fund was launched in November 2001 and has performed well, returning 9 per cent so far this year, with current AUM standing at USD 168 million.

A spokesman said Gartmore is likely to return to the European small companies space in due course and is focusing on developing its AUM USD 6.2 billion single strategy hedge funds business, headed by Charles Beazley, Global Head of Institutional & Alternative Investments.