Gartmore Rocked As Guy Leaves; Firm Mulls Sale, Merger

Nov 8 2010 | 12:36pm ET

Things have gone from bad to worse at Gartmore Group with the exit of its top hedge fund manager.

Roger Guy, who earlier this year blasted his employers of 17 years following the suspension of his co-manager, Guillaume Rambourg—who then left the firm to battle a regulatory probe—will leave Gartmore next year. In addition, Dominic Rossi, the firm's chief investment officer, and Darrell O'Dea, who joined the firm in April to replace Rambourg, will also leave Gartmore.

Guy will spend the rest of the year handing over management of his £3.5 billion in funds to Gartmore's new European equities team, headed by John Bennett, who joined Gartmore from GAM last year.

Guy will retire from "day-to-day" management at the firm in May. He currently manages some 17% of Gartmore's total assets.

In the wake of the firm-shaking news, Gartmore wasted no time in putting itself up for sale. The firm has hired Goldman Sachs to consider strategic alternatives, including a sale or merger as its share price plummeted nearly 20%. No "material" discussions have occurred yet, according to CEO Jeffrey Meyer, who also announced plans to slash £10 billion in costs and introduce a share-based incentive plan.

"When is the end? Is the end ever bottomless?" Meyer asked rhetorically during a conference call when asked if the share plan will keep more top managers from leaving. "I think this is a fair amount…. This is it and if it doesn't do it, it doesn’t do it."

Meyer acknowledged that "2010 has been a difficult year for the company."

Meanwhile, experts are warning that Guy's exit is only the beginning of the bad news for Gartmore, which could face a huge amount of redemption requests in the coming weeks and months. Already, one investor, Skandia Investment Group, has fired Gartmore. Guy ran a 10-stock, €38 million mandate for Skandia's European Best Ideas Fund.


In Depth

GSAM’s Papagiannis on Liquid Alternatives

May 25 2016 | 5:07pm ET

The popularity of liquid alternatives strategies has blossomed in recent years,...

Lifestyle

From Modern Trader: Stephen Curry is a Black Swan

May 18 2016 | 7:43pm ET

What do the rise of the Internet, the sinking of the Titanic, 9/11, and Stephen...

Guest Contributor

LendingClub and the Question of Internal Hedge Funds

May 19 2016 | 8:42pm ET

Peer-to-peer lending platform LendingClub Corp. has been in the news since the firm...