Embattled fund manager Gartmore suffered a fresh setback yesterday when it lost the mandate to run a £50m investment trust following the resignation of a star manager.
The Gartmore Growth Opportunities fund (GGO), said it has reached agreement in principle with Artemis Alpha Trust for a merger of the two companies’ assets. The proposal will be put to a shareholder vote in December.
GGO said earlier this month it was considering its management arrangements after the resignation of smaller companies manager Gervais Williams from Gartmore.
Shareholders in GGO can opt for a cash exit at 95 per cent of asset value but that will be limited to 30 per cent of the trust’s issued share capital. If they stay invested they will receive shares in the Artemis fund at 98.5 per cent of asset value.
After GGO started its review of management, 14 investment managers including Gartmore submitted proposals. Artemis Alpha Trust said the enlarged fund will be managed by John Dodd and Adrian Paterson.
Williams’s departure from Gartmore marked the latest in a succession of setbacks this year for the fund manager.
Star manager Guillaume Rambourg quit in July to focus on a regulatory probe, having been suspended as part of an internal investigation which sparked heavy outflows of assets as clients took their money elsewhere.
The company’s shares have lost nearly half their value since listing last December.
WILL Rogers is advising Gartmore on the Artemis deal.
The former head of investment companies corporate finance at UBS has launched over 50 investment companies with a total value of over £35bn. He has advised on a wide range of reconstructions, equity and debt issuance, buy back programmes, remuneration structures and other corporate finance matters.
He has recently worked with the UKLA and AIC on the proposed changes to the listing rules for investment companies.
Rogers qualified as a corporate lawyer at Allen & Overy in 1989 and joined SG Warburg in 1994, becoming head of investment companies corporate finance in May 2000.