NatWest's 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
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
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's
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's 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's 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.”