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Money managers under the microscope

Phew, the Gartmore “will it, won’t it” game is over!

November 20, 2009


SO: Gartmore is going ahead with a listing on the LSE after all, ending a “will it- won’t it” game that has gone on for quite a bit in the past few weeks. Phew!


gartmore-picThe company CEO, Jeffrey Meyer, says the firm does not strictly need to raise cash now to pay off any urgent debt. In fact the debt taken on to finance the management buy-out in 2006 is not due for years and years to come. Gartmore is going to market simply because it feels like it is the right moment to do it.


Hellman & Friedman, which now owns just a little over 50
percent, is expected to become a minority shareholder while still keeping two representatives in the Gartmore board.


In short: Now it is the time to “de-lever” — to use a trendy term — or pay down debt — to use a less exotic one. Only time will tell whether it will go through by mid-December.

If it does, it will become the first private equity IPO in the UK since 2007. It looks like “the will it, won’t it” game  may end up with a “yes” and a big one at that.


Nothing like a solved mystery; but surely just when the Gartmore one seemed to have been solved, it may turn out to lead to many more mysteries. Gartmore could be a trend setter, an inspiration to other companies, which could agree that the market’s appetite for IPOs is on the up.


Plus, we are told private equity companies are hungry for cash, even if it means getting lower than expected returns, which could work as a further incentive.


So just to recap: here we are at it again, wondering who will follow and when the first candidates are found — musing in due course whether or not they will go to market.


Sigh no more, gentle reader, an IPO is not just about uncertainty and suspense. One thing is certain: someone stands to make money. At least some money. If you do not care to go for the usual suspects: investment banks, lawyers, advisers, think of Gartmore’s staff.


It’s pay time for directors and employees, who are expected to sell a total of about 20 percent of the ordinary shares they own. If Gartmore sticks to its mid-December timetable, Christmas may come a little earlier for them.


Finally after months of gloom and doom here is something comforting to write about, while looking forward to a whirlwind of IPO “will they or won’t theys”.


Better this than the mantra that has kept the media and the world busy in the last 18 months: “whodunnit?”, “whodunnit?”, “whodunnit?”

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