Fri, 20/11/2009 - 08:47
Gartmore, a traditional equity and alternative asset management firm, intends to proceed with an initial public offering and application for listing of its ordinary shares to the Official List of the UK Listing Authority and to trading on the main market of the London Stock Exchange.
The company believes that the offer will enhance the its profile and status with existing and potential clients and strengthen its ability to attract and retain investment talent.
Gartmore intends to use the proceeds it receives from the offer to reduce its net debt to approximately GBP150m. In addition, the offer provides the opportunity for current shareholders to realise part of their investment in the company.
As at 30 September 2009, Gartmore and its subsidiaries had GBP21.8bn of assets under management invested across three core product areas: a range of mutual funds focused on the UK and European retail investment market making up GBP11.9bn or 55 per cent of AUM; a range of alternative funds including equity long-short funds making up GBP3.8bn (USD6.1bn) or 17 per cent of AUM; and a number of segregated accounts managed on behalf of large institutional clients making up GBP6.1bn or 28 per cent of AUM.
Gartmore believes it is ideally positioned to benefit from the convergence of traditional and alternative investment management products.
Gartmore’s directors and employees are expected to sell, in aggregate, approximately 20 per cent of the ordinary shares beneficially owned by them in the offer. The remainder of the directors’ and employees’ shares will be subject to staggered lock-in arrangements that expire in 2013 in respect of ordinary shares held by them at admission. Ordinary shares granted to directors and employees under the group’s deferred compensation plans will be subject to further lock-in arrangements.
The company had AUM of GBP21.8bn at 30 September 2009, up 17 per cent since year-end 2008 and 34 per cent since February 2009. It also reported strong AUM inflow momentum, with GBP924m of net inflows in the third quarter of 2009.
Eighty seven per cent of alternative fund AUM was above their high-water mark as at 30 September 2009, while 72 per cent of mutual fund AUM was invested in funds that have achieved first or second quartile performance over the last three years as at 30 September 2009.
Total revenue was GBP207.1m and operating earnings were GBP38.1m for the nine months to September 2009.
Jeffrey Meyer, Gartmore’s chief executive officer, says: “Gartmore has developed a leading investment management business, focused on delivering superior performance for our clients. We believe that a stock market listing now is the logical next step in Gartmore’s development. It will raise the profile of the group and provide benefits for our clients, shareholders and current and prospective employees. The fundamental prospects for our business are attractive and we have a clear strategy in place to deliver further growth.”
Subject to market conditions, the offer is expected to close in mid-December.
BofA Merrill Lynch, Morgan Stanley and UBS Investment Bank are acting as joint global co-ordinators, joint bookrunners and joint sponsors in the offer. Citi is acting as joint nookrunner and Fox-Pitt, Kelton is acting as co-lead manager.
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