Gartmore deal a boost for Henderson's hedge fund business

Henderson Global Investors' acquisition of Gartmore Group creates a
company with £78 billion in combined assets under management, of
which over $6 billion will be in absolute return products.
Gartmore began searching for a buyer in November 2010 after its chief
investment officer and two of its top portfolio managers quit the
company earlier in the year, resulting in a sharp loss of assets under

Portfolio manager Guillaume Rambourg resigned in July 2010 after he
was found to have breached internal compliance rules regarding
directed trades. Rambourg and colleague Roger Guy were co-managers of
Gartmore's flagship hedge funds, Alphagen Tucana and Alphagen Capella.Guy assumed responsibility for Gartmore's main hedge funds following

Rambourg's resignation only to announce his own resignation in
November. Assets under management in the funds managed by Guy are
reported to have fallen almost 90% on the news.
Gartmore also lost its chief investment officer Dominic Rossi to
Fidelity in November.

Henderson said the acquisition of Gartmore strengthened its position
in the traditional long-only and absolute return businesses.
The vast majority of Gartmore's fund managers - around 84% - are
expected to join Henderson, including the investment teams responsible
for Gartmore's UK, European and Japanese long/short equity funds.
Gartmore's largest hedge fund, Alphagen Capella has over $1 billion in
assets. The fund has generated annualised returns of around 12% since
inception in 1999.

AlphaGen Capella, a long/short European equity fund, suffered large
losses in 2008 and is said to have underperformed the market in 2010.
AlphaGen Tucana, which focuses on large cap, liquid names in core
European markets, has seen its assets under management plunge from
over $1 billion at its peak to below $300 million. Tucana has returned
around 10% annualised since it was launched in 2005.

The Capella and Tucana funds are now jointly managed by John Bennett,
Leopold Arminjon and Thomas Pinto.
The AlphaGen Volantis Fund, a UK small cap long/short equity fund, has
been one of Gartmore's better performing absolute return products in
recent years. Managed by Rob Giles and Adam McConkey, the fund has
posted annualised returns of 17% since inception in 2002 and has over
$300 million in assets.

Henderson launched its first hedge fund strategy in 1999 and currently
manages over $3 billion in its range of single strategy hedge funds
and funds of hedge funds.

Henderson estimates around 21% of the combined company's assets under
management will be in alternative investment products.
The all-stock deal values Gartmore at around £335 million and is
expected to close in the next three months, subject to regulatory

Source: HedgeFundsReview.Com