Brook's legal action 'sour grapes' says Devon Funds

Paul Glass. Photo / Supplied

Devon Funds Management principle Paul Glass says a decision by Brook Asset Management to take legal action against its departing investment team is "corporate sour grapes".

The accusation is the latest in a spat between the two firms over a decision by three staff to leave Brook to take up roles at Devon.

Glass set up Brook with Simon Botherway and the pair sold 49 per cent of the business to Macquarie Group in 2004 and the remainder of it to the Australian firm at the end of 2008.

This year Glass set up new company Devon after buying the asset management business of Goldman Sachs JBWere.

Last week he announced Brook executive director Mel Firmin and portfolio managers Chris Gaskin and Slade Robertson would join his firm.

But on Friday Brook wrote to investors saying it had instructed its lawyers to issue proceedings in connection with "breaches of fiduciary obligations".

The firm also said it was considering whether to institute proceedings against Devon.

Glass said the letter was an unusual strategy. "I'm not surprised Macquarie has thrown their toys out of the cot because no one likes to lose their top team but I'm very surprised at the strategy they have used.

"To impune the integrity of departing employees is poor form and no more than corporate sour grapes."

Glass said Gaskin and Robertson had not told been told about Macquarie's concerns over their alleged breach of fiduciary obligations.

Glass said he had asked Macquarie to provide any evidence supporting their concerns and Devon had also sought legal advice.

Brook Asset Management did not respond to requests for comment.