Gartmore and Henderson take FSCS levy hit

Fund managers Gartmore and Henderson have both felt the impact on the FSCS interim levy on their annual results, with bills of £2.1m and £7.6m respectively.

The results reflect a turbulent year for Gartmore, with Henderson making a bid for the fund manager in January this year in a deal valuing the asset manager at £344m. The acquisition is expected to be completed by 4 April.

Gartmore reported £7.2bn of assets left the firm in 2010, compared to a net inflow of £300m in 2009.

Net revenue was £223.7m in 2010, up from £208.7 the previous year, while AUM shrank from £22.2bn to £17.2bn.

Gartmore says: "Since the year end the group has experienced net outflows (net of notified redemptions) in January of £390m and up to 18 February of £402m.

"However, since the year end markets have been positive, partially offsetting these outflows."

The group also suffered a hit from an FSCS levy of £2.1m to help pay for industry-wide failures, including Keydata.

Gartmore warns: "Further charges for historical failures by financial institutions
are likely to be incurred in future years and the ultimate cost remains
uncertain."

Meanwhile, Henderson reported pre-tax profits of £76.5m over the 12 months to 21 December 2010, compared to £15.5m the previous year. The group's AUM grew by 6% to £61.6bn, from £58.1bn in 2009.

The group saw a net inflow of £2bn, although there were outflows from some areas of the business, including cash funds (£1bn), Pearl (£1.8bn) and the transfer of the Henderson International Property fund to Aviva Investors (£200m).

Jeffrey Meyer, Gartmore CEO, says: "We were pleased with our progress through the end of the first quarter 2010, but events after this caused us to consider other strategic opportunities in order to preserve value for shareholders and maintain client support.

"In view of this, the proposed transaction with Henderson Group represents a good outcome for shareholders while ensuring continuity for clients.

“The strategic and financial benefits of the transaction are significant. The plan for integration is proceeding on schedule, with the majority of portfolio managers representing 84% of AUM joining Henderson."