After acquiring riverview, the group sets sights on EXPANDING RANGE
Gartmore is aiming to launch its first retail fund of hedge funds next year following the launch of an institutional version last month.
The plans come hot on the heels of Gartmore's 100% acquisition of Riverview International Group, a specialist fund of hedge funds business based in New Jersey in the US.
Gartmore is seeking to be a leader in the fund of hedge funds field, according to Stephen Attenborough, the head of European institutional sales at Gartmore. He believes the hedge fund industry is at an inflexion point where institutional investors will become more interested and capacity will grow.
With this, obstacles to investment, including lack of accurate information, lack of knowledge among investors about the different strategies and lack of transparency, will be gradually resolved.
He believes interest in funds of hedge funds will continue to grow, with assets under management possibly reaching $450bn within five years.
Frances Davies, head of global institutional at Gartmore, said the firm decided to enter the fund of hedge funds market because of difficulties in keeping up with single strategy launches. 'This is a natural extension of what we are doing already,' she said. 'We have the infrastructure already.'
Gartmore chose to buy into the market through the acquisition of Riverview in order to tap into demand immediately, rather than going through the process of setting up a fund of hedge funds itself. Riverview was chosen because of its team of investors, who are given strong incentives to perform.
Riverview invests in 75 managers, a third of whom are not on any commercial database. It looks for funds with a disciplined risk management process. This must include a demonstrable process that prevents managers from falling in love with their own positions, said John Gallagher, managing director of product development at the rebranded Gartmore Riverview. The company monitors managers looking for snippets of information that might lead to a more in-depth investigation that could uncover problems.
'There are no good surprises,' he said. 'Surprises that are positive are almost as bad as negative. We don't want managers drifting away from their core competency.'
Established in 1999 Riverview manages $350m in assets, mostly for institutional clients.
The business has been renamed Gartmore Riverview but will operate with a significant degree of independence from the main Gartmore Group.
The four founding members of Riverview will continue to run the business and have entered into an agreement that will lock them into working there for five years.
Two Gartmore business executives, Paul Hondros and Glyn Jones, will join Riverview's board. The board also includes Harry Markowitz, an adviser to Riverview on investment.
£92bn transferred since 2015
Achievements, charity work and other happy snippets
Since first announcement