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US giant pays £1bn for Gartmore in big pension push

NatWest&#39s fund management arm Gartmore has been snapped up by a top five

US insurer in a deal expected to signal its expansion into the retail

pension market.

US giant Nationwide Mutual Insurance is acquiring the fund manager for

£1.03bn, comprising £110m assets and goodwill of £920m. Regulatory approval

should be completed by the end of June.

The deal is being welcomed by IFAs as the US insurer says it will not make

changes to Gartmore and they believe there will be no integration issues as

a result.

But Nationwide is a significant player in the 401(k) retirement plans

market and is ranked third in the US market. It is also the world&#39s

30th-biggest insurance and financial services company and has a 26 per cent

stake in fund supermarket player Investia.

The takeover will give Gartmore a competitive advantage when

collective-investment-driven pension plans are launched in the UK next year

because it will have access to Nationwide&#39s tried and tested technology.

Gartmore also expects to expand its distribution in the US. Gartmore

executive chairman Paul Myners says: “We are leveraging off their marketing

capabilities in the US, their technical abilities for pensions, while we

can also leverage their internet and e-commerce capabilities.

“We talked to a number of companies and a deal with many of them would

have meant substantial disruption. But there is no integration involved in

this deal and we can carry on as before.”

Nationwide president and chief executive Paul Hondros says: “We are strong

in the technology field and intend to put it at Gartmore&#39s disposal to

enable them to move into the defined-contribution market.”

Best Investment deputy managing director Jason Hollands believes the news

is positive for investors. He says: “If Gartmore had been purchased by a

business with an existing presence in the UK market this would have

inevitably led to disruption and further uncertainty.”


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