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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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