Gartmore builds private equity unit

The UK fund manager has appointed former Shell Pension Management Services CIO Nick Shaw as part of plans to launch a private equity offering.

UK fund manager Gartmore Investment Management is planning to launch a private equity arm next month with approximately £600m ($952.5m) under initial management.


“We have undertaken a strategic review of the investment market and have concluded that a major growth opportunity exists within the private equity business,” Mark Robertshaw, chief financial officer at Gartmore said. “We are planning to launch our offering to clients in the early part of 2004 as we already have a number of parties who have indicated that they are interested in working with us on private equity products.”


The capital will come from current private equity investments, and the new firm will be headed by Gartmore veteran Peter Gale, who has been with the firm since its earlier incarnation as County Bank. Gartmore, one of the four big firms that dominated the UK pension fund management market in the late 1990s, is hoping to repeat the success of its hedge fund operations, which run independently within the group.


As part of the launch of the private equity business, Gartmore has hired Nick Shaw as deputy managing director.


Shaw, who joined Gartmore this month, will report to Peter Gale, the private equity unit’s managing director. Prior to joining Gartmore, Nick spent 17 years at Shell, becoming deputy chief investment officer for Shell Pension Management Services in 1997, which has over £11bn of assets under management. He was also responsible for the management of their £520m private equity programme, which he established in 1993.


Earlier this month, Gartmore entered into an alliance agreement with hedge fund manager Aspect Capital Limited, which manages approximately $2bn in assets. In June, the firm acquired $350m New Jersey fund-of-funds Riverview International Group, now called Gartmore Riverview, allowing the UK firm to pursue its foray into the hedge fund business and giving it a presence in the US. In January, Gartmore Group agreed to acquire the assets of a fund of funds managed by Montgomery Partners.


The hedge fund side now accounts for £3.3bn ($5.24bn) and 20 per cent of revenues for Gartmore, according to reports. The firm’s Web site states the firm has £48.9bn ($78.35bn) total assets under management.


Gartmore was acquired by the US-based Nationwide Mutual for £1.03bn ($1.64bn) in 2000. The firm has more than tenyears’ experience managing private equity investments, and hopes to use its private equity arm to also offer asset allocation advice, according to reports.