Fund management group Gartmore has been dealt another blow after news that its star European manager, Roger Guy, is to step down from fund management after 17 years with the company. His departure follows that of two other managers and the group's shares have plunged.
Mr Guy, head of the European large- cap fund management team, will remain with the firm until the end of the year to hand over his funds. Gartmore European Large Cap and All-Cap teams will be combined into a single team, under the management of John Bennett.
Separately, Dominic Rossi, Gartmore's chief investment officer (CIO), has also resigned to take up the role of global chief investment officer with Fidelity, and senior portfolio manager Darrell O'Dea is also leaving.
The latest announcements seal an annus horribilis for Gartmore. It floated on the stock market at 220p last December. Soon after, Guillaume Rambourg was suspended, and eventually left in July following a much-publicised Financial Services Authority investigation. Gartmore's star small-cap manager Gervais Wiliams also left at the end of September, "to pursue other interests".
As a result of Mr Guy's resignation, Skandia Investment Group terminated its €38m (£33m) mandate within its €325m Skandia European Best Ideas Fund, and overall Gartmore says it has recently received notice of £500m-worth of redemptions. Its current assets under management total £20bn.
Darius McDermott of independent financial adviser (IFA) Chelsea Financial Services says Mr Guy's resignation is "another body blow" for Gartmore following the Rambourg debacle. "Not only has [Gartmore] lost its star manager but also CIO Dominic Rossi. This will not only fundamentally affect the way European money is run at the investment house, but also the direction of the company."
However, he added that most of the retail money Mr Guy was running via the Gartmore European Selected Opportunities had already been handed over to John Bennett, whom he described as "a seasoned European investment manager".
What to do if you own Gartmore funds:
The loss of so many managers is unprecedented, and if you own units in the funds affected you should consider your position. In the European space, our favourites this year include and . For a European focus within an absolute return structure, benefiting from a long/short investment strategy similar to the Gartmore European Absolute Return Fund, you may want to look at the Liontrust European Absolute Return, which boasts a strong management team.
What do to if you own Gartmore shares:
If you own the shares, which now trade at less than half the level they floated at last December, don't hold out for a takeover bid. Analysts are suggesting that any potential buyers for what is now effectively a distressed business will look to drive the price even lower before considering a deal. Sell up now.
