Fund manager Gartmore has announced a £10million cost reduction programme and a strategic review of its business by Goldman Sachs which could lead to its sale.
In a statement on 8 November, the company said it regularly reviewed its business but had decided to formalise current deliberations in light of the performance of the company’s share price.
Since the beginning of the year Gartmore’s share price has fallen substantially with further falls following the announcement on 8 November. As trading opened on 9 November, shares were up 2.06 per cent.
Gartmore said it had brought in Goldman Sachs to analyse the ‘strategic options’ for the company. Chief executive Jeffrey Meyer said these could include ‘the possibility of a sale or merger.’
In parallel to this analysis the group said it was aiming to strengthen its business and is putting in place transitional arrangements following the announcement that Roger Guy, head of the European Large Cap fund team, is to retire from day-to-day fund management.
Jeffrey Meyer said: “Roger Guy’s decision to retire follows 17 years managing money at Gartmore. We respect his wish to spend more time pursuing other interests, not least spending some more time with his young family. We are pleased to have him available until next May to ensure a smooth transition.”
Gartmore’s chief investment officer, Dominic Rossi, also announced he is to resign from the company.
Results for the third quarter of 2010 showed Gartmore had increased its assets under management by four per cent, but the impact of positive market movement and fund performance had been offset by net outflows of £0.7billion.
Having already announced £2million of cost savings, the company said it would save £10million over the next two years. These savings will come from its head office relocation, ‘reviewing a small number of sub-scale investment capabilities’ and reducing headcount.
The company also said it would provide equity incentives for key portfolio managers, putting in place equity grants by issuing up to 15 per cent of the company’s existing share capital, to ‘ensure the retention and incentivisation of its investment management talent’.
© Fair Investment Company Ltd