LONDON, Nov 17 (Reuters) - Crisis-hit British funds firm Gartmore GRTR.L is preparing to lose a large chunk of the 3.5 billion pounds of assets ($5.6 billion) managed by fund manager Roger Guy, a senior company source said on Wednesday.
“We expect a significant portion of these assets to be redeemed. Most of these assets are hedge fund assets and are therefore quite personal to the fund manager,” the source said.
“But even if we lose the whole chunk, we still have 17.5 billion pounds in total assets, which is quite a good sized asset management company,” the source said.
Star fund manager Guy stunned markets last week by announcing his resignation from Gartmore, triggering a sharp fall in its shares. Gartmore shares are now trading at 114.5 pence, nearly half their value since floating at 220 pence in December last year. [ID:nLDE6A70K3] [ID:nLDE6A70TM]
Some analysts have suggested a large outflow of assets managed by Guy and his former colleague Guillaume Rambourg could make the company less attractive to possible bidders.
However, the source said that Gartmore had already started to hold conversations with a number of interested parties, although “nothing formal” was in progress at this stage.
Gartmore appointed Goldman Sachs (GS.N) to conduct a strategic review at the fund firm to evaluate its options.
“If a sale is the outcome [of the review], we are most likely to see a sale of Gartmore a complete unit,” the source said.
Some analysts have said interested buyers were likely to cherry-pick the company’s best assets, making a sale of the whole business more difficult.
Gartmore shareholders have also demanded that it resolves the issue quickly to remove uncertainity at the firm, the source said.
A Gartmore spokeswoman declined to comment on the scale of outflows and added that it was too early to “prejudge the outcome” of the strategic review. (Editing by Sinead Cruise and Jane Merriman) ($1 = 0.6294 pound)