8 Nov 2010
Roger Guy, one of London’s leading portfolio managers, is to retire from Gartmore Group in 2011 as part of a wide ranging strategic review at the investment firm. Gartmore has appointed Goldman Sachs to help with the analysis by carrying out a full assessment and evaluation of its strategic options.
As part of the process, Gartmore has unveiled a firm wide cost cutting programme which is expected to yield annual saving of about £10 million. In addition, new equity, representing up to 15% of the company's existing issued share capital, is also being made available under existing authorisations to retain and incentivise key employees.
Two other senior money managers at Gartmore are also to stand down. Darrell O’Dea, who only joined Gartmore after Guillaume Rambourg left in the spring following over a decade working with Guy, is to depart as is Dominic Rossi, the chief investment officer, who is to become global CIO for equities at Fidelity International.
Meyer will resume CIO responsibilities, a position he held for three years until Rossi’s appointment in November 2008. In addition, Brian Mitchell, currently head of dealing, has been appointed chief operating officer of the investment division.
Guy owns over 5% of Gartmore stock. He was critical of Gartmore's handling of the suspension of Rambourg, but told investors in April he planned to continue with the firm. Guy’s departure will see the merger of the European Large Cap and All Cap teams into one European equities team. Key portfolio managers for other Gartmore equity funds are to remain in their positions.
Business Highlights
Gartmore also announces today its Interim Management Statement for the third quarter of the current financial year, being the 3 months ended 30 September 2010. AUM grew from £19.9bn at 30 June 2010 to £20.7bn at 30 September 2010, a 4% increase. Positive market movement and investment performance were partially offset by net outflows of £0.7bn. Estimated AUM at 31 October 2010 was £20.9bn, despite outflows of £0.3bn during October. The Group has been notified of a further £0.5bn of withdrawals. Net debt at 30 September was £79.7m comprising gross debt of £247.1m and cash of £167.4m. Seed investments at 30 September were £17.3m.
Cost Reduction
Assets under management
AUM grew from £19.9bn at 30 June 2010 to £20.7bn at 30 September 2010, a 4% increase. Positive market movement and investment performance were partially offset by net outflows of £0.7bn. Alternative fund AUM was £3.2bn at 30 September 2010 down from £3.6bn at 30 June 2010. Net outflows were £421m during this period. Weighted average investment performance in the third quarter was 2.1% net of all fees, but AUM decreased as a result of the depreciation of the US Dollar against Sterling.
Mutual fund AUM increased to £11.7bn at 30 September 2010 from £10.9bn at 30 June 2010. The Group experienced net outflows of £263m, but AUM increased through positive market movements. We continued to see opportunities to build our Absolute Return mutual funds, with net inflows of £94m into the UK, Japan and Multimanager Absolute Return funds, although the European Absolute Return Fund saw outflows of £131m.
Segregated mandate AUM was £5.8bn (including Private Equity JV AUM of £1.2bn) at 30 September 2010 up from £5.4bn (including Private Equity AUM of £1.1bn) at 30 June 2010 due to positive market movements.
Investment Performance
For the one year period ended 30 September 2010, the Group's alternative funds produced an AUM weighted return of 1.6% net of all fees, slightly below the Eurohedge European Equity Long-Short Indices, which recorded returns of 2.0% over the same period.
At 30 September 2010, 42% 60% and 72% of Gartmore's mutual fund AUM were invested in funds that have achieved first or second quartile performance over the last one, three and five years, respectively. At 30 September 2010, 69% and 92% of segregated mandates were above benchmark on an AUM weighted basis over the last three and five years, respectively.
Operating results
At 31 October 2010, the Group's AUM was estimated at £20.9bn. During the month of October, the Group had estimated net outflows of £281m which comprised £77m of alternative fund outflows, £101m of mutual funds outflows and £103m of segregated mandates outflows. The Group has also received approximately £0.5bn of redemption notifications, the majority of which will withdraw by the year end. These notifications include £0.2bn of European Large Cap team AUM.
At 31 October 2010, 48%, 60% and 77% of Gartmore's mutual fund AUM were invested in funds that have achieved first or second quartile performance over the last one, three and five years, respectively. The Group's financial position remains materially unchanged. Net debt at 30 September was £79.7m comprising gross debt of £247.1m and cash of £167.4m. Seed investments at 30 September were £17.3m.
As part of the process, Gartmore has unveiled a firm wide cost cutting programme which is expected to yield annual saving of about £10 million. In addition, new equity, representing up to 15% of the company's existing issued share capital, is also being made available under existing authorisations to retain and incentivise key employees.
Two other senior money managers at Gartmore are also to stand down. Darrell O’Dea, who only joined Gartmore after Guillaume Rambourg left in the spring following over a decade working with Guy, is to depart as is Dominic Rossi, the chief investment officer, who is to become global CIO for equities at Fidelity International.
"Roger Guy's decision to retire follows 17 years managing money at Gartmore,” said Jeffrey Meyer, CEO. “We respect his wish to spend more time pursuing other interests, not least spending more time with his young family. We are pleased to have him available until next May to ensure a smooth transition."
Meyer will resume CIO responsibilities, a position he held for three years until Rossi’s appointment in November 2008. In addition, Brian Mitchell, currently head of dealing, has been appointed chief operating officer of the investment division.
"I have greatly enjoyed my 17 years at Gartmore,” said Guy. “As I step back from day to day fund management in the New Year, the assets I manage will be transitioned to an extremely strong team, led by John Bennett, and which includes Leopold Arminjon and Tomas Pinto whom I have worked closely with over the last three years. I greatly respect and have every confidence in John and his whole team to continue delivering value for clients after I leave the business in May 2011. I intend to remain an investor in the funds after they have transitioned to John's team."
Guy owns over 5% of Gartmore stock. He was critical of Gartmore's handling of the suspension of Rambourg, but told investors in April he planned to continue with the firm. Guy’s departure will see the merger of the European Large Cap and All Cap teams into one European equities team. Key portfolio managers for other Gartmore equity funds are to remain in their positions.
Business Highlights
Gartmore also announces today its Interim Management Statement for the third quarter of the current financial year, being the 3 months ended 30 September 2010. AUM grew from £19.9bn at 30 June 2010 to £20.7bn at 30 September 2010, a 4% increase. Positive market movement and investment performance were partially offset by net outflows of £0.7bn. Estimated AUM at 31 October 2010 was £20.9bn, despite outflows of £0.3bn during October. The Group has been notified of a further £0.5bn of withdrawals. Net debt at 30 September was £79.7m comprising gross debt of £247.1m and cash of £167.4m. Seed investments at 30 September were £17.3m.
Cost Reduction
Assets under management
AUM grew from £19.9bn at 30 June 2010 to £20.7bn at 30 September 2010, a 4% increase. Positive market movement and investment performance were partially offset by net outflows of £0.7bn. Alternative fund AUM was £3.2bn at 30 September 2010 down from £3.6bn at 30 June 2010. Net outflows were £421m during this period. Weighted average investment performance in the third quarter was 2.1% net of all fees, but AUM decreased as a result of the depreciation of the US Dollar against Sterling.
Mutual fund AUM increased to £11.7bn at 30 September 2010 from £10.9bn at 30 June 2010. The Group experienced net outflows of £263m, but AUM increased through positive market movements. We continued to see opportunities to build our Absolute Return mutual funds, with net inflows of £94m into the UK, Japan and Multimanager Absolute Return funds, although the European Absolute Return Fund saw outflows of £131m.
Segregated mandate AUM was £5.8bn (including Private Equity JV AUM of £1.2bn) at 30 September 2010 up from £5.4bn (including Private Equity AUM of £1.1bn) at 30 June 2010 due to positive market movements.
Investment Performance
For the one year period ended 30 September 2010, the Group's alternative funds produced an AUM weighted return of 1.6% net of all fees, slightly below the Eurohedge European Equity Long-Short Indices, which recorded returns of 2.0% over the same period.
At 30 September 2010, 42% 60% and 72% of Gartmore's mutual fund AUM were invested in funds that have achieved first or second quartile performance over the last one, three and five years, respectively. At 30 September 2010, 69% and 92% of segregated mandates were above benchmark on an AUM weighted basis over the last three and five years, respectively.
Operating results
At 31 October 2010, the Group's AUM was estimated at £20.9bn. During the month of October, the Group had estimated net outflows of £281m which comprised £77m of alternative fund outflows, £101m of mutual funds outflows and £103m of segregated mandates outflows. The Group has also received approximately £0.5bn of redemption notifications, the majority of which will withdraw by the year end. These notifications include £0.2bn of European Large Cap team AUM.
At 31 October 2010, 48%, 60% and 77% of Gartmore's mutual fund AUM were invested in funds that have achieved first or second quartile performance over the last one, three and five years, respectively. The Group's financial position remains materially unchanged. Net debt at 30 September was £79.7m comprising gross debt of £247.1m and cash of £167.4m. Seed investments at 30 September were £17.3m.
