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Gartmore to lose fund after manager exit

By Reuters
Updated: 10:43 EDT, 27 September 2010

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UK fund Gartmore is set to lose the mandate to run a £50m ($79.1 million) investment trust after its manager Gervais Williams resigned.

Agreement: Gartmore-managed trust is to merge with Artemis fund

Gartmore Growth Opportunities Plc (GGO) has reached agreement in principle with Artemis Alpha Trust Plc to merge the two companies' assets, the fund said today. The proposal will be put to a shareholder vote in December.

GGO said on September 1 it was considering its management arrangements after the resignation of smaller companies manager Gervais Williams from Gartmore.

Shareholders in GGO can opt for a cash exit at 95% of asset value but that will be limited to 30% of the trust's issued share capital. If they stay invested they will receive shares in the Artemis fund at 98.5% of asset value.

After GGO started its review of management, 14 investment managers including Gartmore submitted proposals, the fund said.

John Dodd and Adrian Paterson will manage the enlarged Artemis fund, Artemis Alpha Trust said in a separate statement.

Williams's departure from Gartmore marked the latest in a succession of setbacks this year for the fund manager.

Star manager Guillaume Rambourg quit in July to focus on a regulatory probe having previously been suspended as part of an internal investigation, sparking heavy outflows of assets as clients took their money elsewhere.

The company's shares have lost nearly half their value since listing last December.

Gartmore currently trades at around 114p, having first listed at 220p, leading to speculation the company could become a takeover target.

Another investment trust, the € 92.3m Gartmore Irish Growth fund may also end its contract with Gartmore following Williams's departure.

Gartmore Fledgling trust, which Williams also managed, has said it will continue to be run by co-manager Harmesh Suniara at Gartmore.

Gartmore has appointed Adam McConkey as head of UK smaller companies to replace Williams, who is set to leave at the end of the month.

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