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Advisers don’t like talk of Gartmore bidding for Jupiter

Leading investment advisers would not be in favour of a merger between Gartmore and Jupiter after reports that Gartmore’s private equity backers are lining up a bid for the fund firm.

There are concerns that any move by Gartmore for Jupiter would result in an exodus of fund managers from the Commerzbank-owned fund house and that the two firms have too much overlap to be a good fit.

There are also worries it could damage Jupiter’s culture and undermine the new sense of purpose pro- vided by Gartmore’s new partnership structure.

A Gartmore insider insists that its majority shareholders Hellman and Friedman are in discussions with Commerzbank although the German company denies this.

A merger would create a 40bn giant but advisers say the two firms’ strengths in UK and European equities and multi-manager would not be complementary.

Hargreaves Lansdown head of research Mark Dampier says: “I am not crazy about it because I do not like fund house mergers unless they instinctively link together. Jupiter have their own people and I do not see them matching well with Gartmore.

“You would see half the managers leave and funds under management will disappear.”

Chelsea Financial Services managing director Darius McDermott says: “As a fit I think they are both too big. It took three or four years for Invesco and Perpetual to settle down after their merger.”

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