Henderson: turmoil will last all year

GLOBAL political paralysis will hit markets for the rest of this year, the head of Henderson warned yesterday as he hailed the fund manager’s swift integration of its latest acquisition.

Andrew Formica, chief executive, said investor confidence had been damaged by the UK riots, the Eurozone crisis and squabbles over raising the US debt ceiling.

Yesterday the Anglo-Australian fund reported £86.4m in underlying profits before tax for the first-half, almost double the £48.5m it booked last year. Formica told City A.M. that politicians had shown an “inability” to make any decisions.

“It is not just in the Eurozone – look at the US and the Republicans and Democrats... In the past political activity was separated from markets but after the crisis we are much more inter-linked – it is not a pretty picture.”

Formica said Henderson is not looking to buy other funds before 2013, as it concentrates on the integration of Gartmore, which has been quicker than that of New Star.

One-off charges associated with the integration of Gartmore saw Henderson post a pre-tax loss of £3.1m, compared to a £41.6m profit a year earlier. It will pay an interim dividend of 1.95p per share, up from 1.85p last year.

Assets under management were £74.4bn. It attracted £285m net inflows from retail investors, while institutional investors and insurer Phoenix withdrew about £3.1bn.

TIME LINE | HENDERSON AND GARTMORE

November 2008
Andrew Formica takes over as chief executive of Henderson from long-serving boss Roger Yates

April 2009
Henderson acquires debt-laden rival New Star Asset Management for £94.2m

March 2010
Officially drops the New Star name, saying it remained “tarnished” by its troubles prior to the acquisition.

June 2010
Pulls out of a deal to buy fund management arm of banking group SunTrust for a reported price of up to $400m (£264.5m)

September 2010
Gartmore hires industry veteran Robert Kyprianou as a non-executive director after seeing its share price nearly halve. Star manager Guillaume Rambourg resigns after allegedly breaking internal trading rules, though he was later cleared by the FSA

November 2010
Roger Guy, another Gartmore star manager, resigns and the firm puts itself up for sale

January 2011
Henderson announces it will buy Gartmore in a £335m deal

August 2011
Henderson reports a doubling of first-half fee income but fails to stem outflows from Gartmore.