Management Buy Gartmore

Stephen Harris

26 May 2006

London-based asset-manager, Gartmore Investment Management, is being sold to management by its parent, US insurer Nationwide Mutual Insurance, bringing to a close a seven-month auction process. Gartmore’s management is backed by private-equity firm Hellman & Friedman, and although the price was not disclosed, it is thought to be less than £500 million ($936.5 million). Senior Gartmore fund managers and executives will own a "significant portion of the equity" and control day-to-day operations of the firm, according to Gartmore. Nationwide bought Gartmore for £1 billion in 2000 but wrote its book value down to £600 million in 2002 to take account of reduced asset valuations following the world-wide bear market. Under the terms of the deal Ohio-based Nationwide will retain the US portion of the group, which operates as Gartmore Global Investments. Roger Guy, Gartmore's investment director, will join the Gartmore board, as will chief executive officer Jeff Meyer and Paul Feeney, head of distribution. When Nationwide put Gartmore up for sale, there was concern that Mr Guy and other top hedge-fund managers might leave if they weren't offered attractive roles in the future of the firm. Gartmore will have £24 billion in assets under management following the transaction, including a £4 billion hedge-fund business.