Top fund managers quit Gartmore as sale drags on

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The Independent Online

Gartmore, the UK fund management company which was put up for sale by its US owner Nationwide three months ago, lost three of its key European fund managers yesterday, as the group's protracted takeover saga began to take its toll.

Tim Callaghan, Adrian Darley and Jonathan Fearon - three managers from Gartmore's award-winning European team - announced they were leaving to join Britannic Asset Management, the fund manager arm of the closed life book consolidator Resolution.

Nationwide officially put Gartmore up for sale towards the end of last year, generating significant interest from a number of bidders. However, most have now withdrawn from the race, including the former front-runner, Henderson Group, which dropped out at the end of last month.

A bid from Gartmore's head of European retail and bancassurance, Paul Feeney, backed by the US private equity group Hellman & Friedman, is believed to now be the only remaining bid for the whole group on the table.

If Nationwide is unable to find a bidder for the whole of Gartmore's UK business, it may resort to breaking the business up. New Star Asset Management, headed by the flamboyant City entrepreneur John Duffield, is keen to buy the company's retail assets, while Aberdeen Asset Management, headed by chief executive Martin Gilbert, is believed to have its eye the company's institutional funds. There are also believed to be a number of smaller bidders interested in Gartmore's hedge fund business.

Gartmore is at pains to keep its oldest European fund manager, Roger Guy, happy. Mr Guy's European retail funds have accounted for the largest part of Gartmore's retail inflows over the past few years.

The group also seemed reluctant to concede the loss of its three other European fund managers yesterday, claiming that it was still in negotiations with the trio. Britannic said that the managers had already signed contracts with them.

Jonathan Polin, the sales and marketing director at BAM, said the trio had been keen to find some stability outside of Gartmore. "What they've seen is a business with a very strong partner behind it, and they're attracted by what they've seen."

The three are to take over the management of BAM's existing core European retail and institutional portfolios. However, BAM's European high alpha funds, which have been among the group's top sellers in recent months, will continue to be managed by Barry Norris and Oliver Russ of Argonaut, the boutique fund management group.