 |
Beazley: IPO not on our
immediate radar |
Gartmore's global head of institutional and alternative investments, Charles Beazley, has denied rumours of a pending IPO for the UK-based fund manager. Speculation has been rife since CEO Paul Hondros mentioned in a press interview that the company might be floated. Beazley has stressed that while flotation will be among possible strategies considered by management, if it happened it would not be for some time.
US insurer Nationwide Mutual bought Gartmore in 2000 from Royal Bank of Scotland for $1 billion and still owns 80% of the company. The remaining 20% is owned by Gartmore employees. Although it seems likely that Nationwide will ultimately expect some return for its money, Beazley says that the parent and its subsidiary are "enjoying a strong relationship at the moment". He adds: "We are both watching what is happening in the marketplace, but right now the message from the executive committee is that an IPO is not on our immediate radar. Nationwide is making that clear as well."
One ex-Gartmore employee suggests that an IPO would not be on the cards for at least another year. Another claims that a trade sale was seriously being considered by management 18 months ago, and shouldn't be ruled out.
Beazley says that the management is working on building the alternatives business further for the time being. "Demand has been increasing from financial institutions as well as pension funds, and the business is growing in Japan and New York in addition to Europe," he says. Gartmore now has 20 hedge funds running about $6 billion in assets under management, in addition to a separate fund of hedge funds business and a private-equity unit.
"Investors want their exposure to equities through a traditional equity manager and then access to a specialist provider for fixed income, currencies, absolute-return products and the new type of long-only business where you can add alpha. We will be coming forward shortly on those issues," Beazley says. He believes that Gartmore is two-thirds of the way to becoming the alpha specialist that it aspires to be. The importance of a strong quantitative team will be crucial, he adds. In September, Gartmore added two more to its 15-strong quant strategies team in the UK, which manages about $3 billion in three funds.
Rumours of management problems at Gartmore have persisted after a thoroughgoing reshuffle at the senior management level and the departure of two of its managers, Jonathan Sharpe and Tamsin Quayle, to run their own hedge fund in August. The result was that Gartmore had to return to investors $178 million that was held in the European small-cap fund. But as the company points out, "these are the only two to leave to set up on their own since 1999".