Light-touch group embraces merger

Henderson Global Investors is set to take over another firm, which excites the head of equities because of the potential to expand and strengthen the group’s range, writes Shaun Cumming.

Mark Skinner, who has a New Star background, says that this has played a crucial role in the firm’s development and highlights the success of that merger when considering Gartmore. “Clients want stability, and they want to know what changes will be made to their investments.

“We employ an experienced team who are capable of handling the situation. There are clear challenges ahead, but we are comfortable because it is a strong team,” he says.

The launch of the European Special Situations fund displays this individual manager ownership. Managed by Richard Pease, the fund has flourished since October 2009. Against the sector average, the European Special Situations fund has consistently outperformed its sector average over the past two years to February 2011.

After the Gartmore takeover has been completed, Britain and Europe will remain key markets for Henderson.

Despite inflationary pressures showing in Britain, Henderson managers working in British, European and American equities are bullish. Kitchen says that valuations within these areas are “quite cheap”.

“I am bullish about the economy in general, and not only from a British and European perspective, but also when looking at America, which is showing good signs of recovery,” he says.

Raising interest rates would probably have a minimal impact on inflation in Britain because, in his view, it is driven largely by external factors such as oil and food prices.

As Henderson confirmed the Gartmore takeover in January, the deal was announced to be worth £335m, which equals 92.1p a share. When Gartmore listed in December 2009, investors paid 220p a share, which is a loss of 60%. This means that although Henderson insiders, and indeed clients of the company are happy with the merger, there are also those who have lost out.

Gartmore was a prime candidate for takeover. The company had endured a disappointing year before the deal was negotiated. In addition, prominent fund managers departed, and the company was also defending itself against an investigation by the Financial Services Authority .

Small wonder then, that despite some Gartmore investors losing on the share price, overall the takeover was well received. Henderson is regarded as an established, stable house, and the managers aim to communicate this into clients’ investments.

Industry players will continue to speculate, regardless of Henderson’s strong reputation. Confidence is only likely to grow once the process is complete and managers and funds have had time to adjust.

Henderson Global Investors has £61.6 billion of assets under management. The firm completed a merger with New Star in April 2009 and announced the takeover of Gartmore in January 2011.


* This article was changed on March 21, 2011. The manager of the Gartmore UK Absolute Return fund is Ben Wallace, not Graham Wallace as originally stated.