Gartmore on the block as star resigns

GARTMORE yesterday said its star manager Roger Guy had resigned and the firm put itself up for sale, firing the starting gun for rivals to cut a deal before heavy outflows damage the group irrevocably.

Goldman Sachs has been appointed to examine the options for the firm, which chief executive Jeffrey Meyer said would include “the possibility of a sale or merger”.

But the departure of Guy could potentially prove catastrophic, since his team manages 17 per cent of the firm’s £20.1bn assets under management and has generated almost half of performance fees in recent years.

Initial soundings signalled a lacklustre attitude to a deal among the most obvious potential acquirers. Henderson may run the rule over Gartmore, though chief executive Andrew Formica has indicated he is keener on making an overseas purchase after buying New Star. A Schroders deal is unlikely given Gartmore’s damaged brand name, while Aberdeen boss Martin Gilbert is known to be averse to the idea of making an acquisition.

Ex-private equity owner Hellman & Friedman, which still holds a sizeable stake, was also mentioned as a possible contender, as were overseas buyers such as Bank of New York Mellon.

Gartmore said it will now implement a strict cost-cutting drive and issue new equity representing 15 per cent of its existing share capital, in order to retain and incentivise staff.

Guy’s responsibilities will pass to John?Bennett, combining the firm’s European large cap and all-cap teams into a single European equities team.

The firm’s woes were compounded by the further resignations of chief investment officer Dominic Rossi, poached by rival Fidelity, and senior portfolio manager Darrell O’Dea.

The news comes after Gartmore was rocked earlier this year by the exit of star manager Guillaume Rambourg amid investigations into his conduct.

Gartmore’s shares lost 15 per cent yesterday to close at 107p, having already lost over half their value since the company floated late last year.
GARTMORE yesterday said its star manager Roger Guy had resigned and the firm put itself up for sale, firing the starting gun for rivals to cut a deal before heavy outflows damage the group irrevocably.

Goldman Sachs has been appointed to examine the options for the firm, which chief executive Jeffrey Meyer said would include “the possibility of a sale or merger”.

But the departure of Guy could potentially prove catastrophic, since his team manages 17 per cent of the firm’s £20.1bn assets under management and has generated almost half of performance fees in recent years.

Initial soundings signalled a lacklustre attitude to a deal among the most obvious potential acquirers. Henderson may run the rule over Gartmore, though chief executive Andrew Formica has indicated he is keener on making an overseas purchase after buying New Star. A Schroders deal is unlikely given Gartmore’s damaged brand name, while Aberdeen boss Martin Gilbert is known to be averse to the idea of making an acquisition.

Ex-private equity owner Hellman & Friedman, which still holds a sizeable stake, was also mentioned as a possible contender, as were overseas buyers such as Bank of New York Mellon.

Gartmore said it will now implement a strict cost-cutting drive and issue new equity representing 15 per cent of its existing share capital, in order to retain and incentivise staff.

Guy’s responsibilities will pass to John?Bennett, combining the firm’s European large cap and all-cap teams into a single European equities team.

The firm’s woes were compounded by the further resignations of chief investment officer Dominic Rossi, poached by rival Fidelity, and senior portfolio manager Darrell O’Dea.

The news comes after Gartmore was rocked earlier this year by the exit of star manager Guillaume Rambourg amid investigations into his conduct.

Gartmore’s shares lost 15 per cent yesterday to close at 107p, having already lost over half their value since the company floated late last year.

TODD LELAND, GOLDMAN SACHS

CO-HEAD OF FINANCIAL
INSTITUTIONS GROUP IN EUROPE

WHEN times are tough, it’s best to call in the big guns – a mantra Gartmore’s chief executive Jeffrey Meyer has certainly taken to heart when it comes to putting the group on the block.

Goldman Sachs is the bank which has been drafted in to look at Gartmore’s options, with its team led by veteran banker Todd Leland.

Leland previously worked for Goldman in the US for many years, advising on hefty deals such as Wachovia’s $6.9bn acquisition of AG Edwards, before moving to the UK a few years ago.

His initiation into the corporate finance world in the UK came almost immediately, when he was one of the team of Goldman heavy-hitters appointed by the Treasury to sort out the headache of Northern Rock in late 2007 and early 2008. He also worked on HSBC’s mammoth £12.5bn rights issue last year.

Joining him on the Gartmore team is Goldman executive director John Brennan, who worked for Investec on its acquisition of the outstanding shares in Rensburg Sheppards earlier this year.

Brennan was also on the Goldman team which advised Irish Nationwide during its merger talks with fellow Irish building society EBS at the turn of this year.