Henderson to take over Gartmore
Fund management group Henderson has announced that it has reached an agreement for the acquisition of beleaguered asset management firm Gartmore, for an estimated £355 million.
Following the announcement, shares in the group were up more than 11% at 154p, as the company said the acquisition would lead to a "significant enhancement" of its presence, with combined assets under management of £78 billion. This will make Henderson the sixth largest fund management firm in the UK retail space.
The directors of Gartmore said they consider the terms of the acquisition to be fair and reasonable and would unanimously recommend that shareholders vote in favour of the acquisition.
So far 12 Gartmore fund managers have said they will remain with the combined group, including Charlie Awdry and Chris Palmer from the emerging markets team and John Bennett from the European equities team.
Henderson said it was still working to secure the support of further Gartmore fund managers and added that the 12 it had already secured represented 84% of Gartmore's assets under management.
Completion of the acquisition will take place within the next three months, subject to Henderson and Gartmore shareholder and regulatory approval.
Andrew Formica, chief executive of Henderson Group, said: "The acquisition of Gartmore is a great opportunity for Henderson. Gartmore has a highly complementary strategy and stable of products to that of Henderson. Its recent travails should not overshadow the fact that Gartmore is one of the best known managers in UK fund management and its assets are performing well."
At the tail end of last year Gartmore went through a tumultuous time when its star fund manager Roger Guy and its chief investment officer Dominic Rossi announced their departure. Since it floated in 2009 at 220p, shares in Gartmore have more than halved to 100p.
An individual employed by an institution to manage an investment fund (unit trust, investment trust, pension fund or hedge fund) to meet pre-determined objectives (usually to generate capital growth or maximise income) in prescribed geographic areas or investment sectors (such as UK smaller companies, technology or commodities). The manager also carries the responsibility for general fund supervision, as well as monitoring the daily trading activity and also developing investment strategies to manage the risk profile of the fund.
An interchangeable term for shares (UK) or stocks (US). Holders of equity shares in a company are entitled to the earnings and assets of a company after all the prior charges and demands on the company’s capital (chiefly its debts and liabilities) have been settled. To have equity in any asset is to own a piece of it, so holders of shares in a company effectively own a piece proportionate to the number of shares they hold. (See also Shares).
Generic, loosely-defined term for markets in a newly industrialised or Third World country that is in the process of moving from a closed economy to an open market economy while building accountability within the system. The World Bank recognises 28 countries as emerging markets, including Argentina, Brazil, China, Czech Republic, Egypt, India, Israel, Morocco, Russia and Venezuela. Because these countries carry additional political, economic and currency risks, investors in emerging markets should accept volatile returns. There is potential to make large profit at the risk of large losses.