RPT-UPDATE 3-Gartmore seeks bidders, star managers walk

* Goldman Sachs appointed for dual track review

* Roger Guy to retire, Dominic Rossi resigns

* Cost-cutting programme to save 10 mln stg a year
* Shares down a fifth in morning trade

(Repeats to remove extraneous character in paragraph 5 weblink)

By Chris Vellacott

LONDON, Nov 8 (BestGrowthStock) – Crisis-hit fund manager Gartmore
(GRTR.L: ) is seeking talks that could lead to a merger or sale as
its star manager Roger Guy becomes the latest key figure to
leave the embattled company, sparking a sell-off in its shares.

Gartmore shares plunged more than a fifth to 98.6 pence on
Monday after it said Guy was stepping down from his day-to-day
role running the European large cap funds team to spend more
time with his family.

By 1124 GMT, Gartmore shares were down 20.2 percent at 100.5
pence, trading on substantial volume.

His departure is the latest in a litany of mishaps at the
fund manager since its listing in December. Its shares have now
lost more than half their value since floating at 220 pence.


For a graphic charting the Gartmore share price and key
events since its IPO, click http://r.reuters.com/get34q

For a timeline charting Gartmore’s challenging first year as
a public company [ID:nLDE6A70TM]


Compounding Gartmore’s staffing woes, the company’s chief
investment officer (CIO), Dominic Rossi, is leaving to become
global CIO for equities at rival Fidelity International. Senior
portfolio manager Darrell O’Dea has also quit.

“Fairly epic value destruction has taken place … It’s
like a football team that’s sold all its stars. Is this
Portsmouth (football club)?” said Keith Baird, an analyst at
Oriel Securities.

O’Dea was recruited from Threadneedle in April in an attempt
to reassure investors after the suspension of Guillaume Rambourg
following the launch of an in-house investigation into an
alleged breach of internal rules on directing broker trades.

Rambourg quit in July to focus on the regulatory probe,
sparking heavy outflows of assets as clients took their money

Guy, who owns more than 5 percent of Gartmore stock, was
openly critical of Gartmore’s handling of the suspension of his
co-manager [ID:nLDE62U164]. Guy told investors in April he
planned to stay put in spite of his misgivings. [ID:nLDE63014C]

He will remain at the company until May on a consultancy
basis to complete a smooth handover of responsibilities to John
Bennett, who will oversee the merger of the European Large Cap
and All Cap teams into one European equities team.


Gartmore said it had hired Goldman Sachs (GS.N: ) to evaluate
its options after the exodus of key management talent and would
issue new shares amounting to up to 15 percent of the company’s
capital to incentivise staff and prevent further departures.

Chief Executive Jeffrey Meyer said the process was designed
to rebuild the troubled company as well as kick-start
discussions with potential buyers.

Meyer told a conference call Gartmore was “beginning to have
discussions with other firms … to see whether a business
combination is in the best interest of our clients and our

The company is also implementing an aggressive cost-cutting
programme, which is expected to yield about 10 million pounds
($16.2 million) in annual savings.

Besides Guy, Gartmore’s biggest shareholders are private
equity firm Hellman & Friedman and investment company Henderson
Global Investors (HGGH.L: ).

The latter has been widely tipped as a potential buyer for
Gartmore, having experience of integrating troubled fund
management groups after its takeover of New Star.

Henderson declined to comment on speculation it was
interested in a bid for Gartmore.

Buoyant markets helped Gartmore to book a 4 percent rise in
assets under management to 20.7 billion pounds in the quarter to
Sept. 30, but clients continue to withdraw money and cancel
mandates with the manager.

The group reported 700 million pounds of net outflows during
the period, and flagged a further 500 million pounds of
notifications to withdraw cash next quarter.
($1=.6179 Pound)
(Additional reporting by Cecilia Valente; Editing by Sinead
Cruise and Jon Loades-Carter)
(See www.reutersrealestate.com for the global service for real
estate professionals from Reuters)

RPT-UPDATE 3-Gartmore seeks bidders, star managers walk