US PRIVATE EQUITY firm Hellman & Friedman has moved into pole position to acquire fund manager Gartmore after it emerged asset management company, Schroders has dropped out of the race, reports The Daily Telegraph .
The paper says it is understood Schroders, which is thought to have pitched its bid at around £550m for Gartmore Investment Management's UK business, pulled out of the sale process last weekend. It is not yet clear why Schroders dropped out of the auction, but it is thought it did not want to raise its offer to the £600m asking price.
Hellman & Friedman, which last year teamed up with advertising group WPP to bid for media group Aegis, is believed to be the last remaining bidder for Gartmore -although other contenders may return.
Henderson Global Investors, Lehman Brothers, Unicredit, New Star and Aberdeen Asset Management are all understood to have expressed an interest.
A purchase of Gartmore by Hellman & Friedman would secure the group the earning potential of Roger Guy, one of London's most highly rated fund managers. He manages Gartmore's flagship AlphaGen hedge fund and is thought to earn between £20m and £30m a year.
Gartmore also has several other highly rated managers including Bambos Hambi, Marcus Brookes and Chris Burvill.
The revelation Schroders has dropped out of the process comes as a surprise to some in the City as last year it mounted an audacious attempt to poach Guy from Gartmore, the Telegraph adds.
FAMILIES OF PEOPLE who die intestate will be spared the consequences of Gordon Brown’s trust tax proposals, following a Treasury announcement designed to defuse the growing row over its plans, reports The Financial Times.
The Treasury said the Finance Bill, published today, would make clear relatives of those who die without a will would not be caught out by the measures to introduce tax charges for trusts with assets above the basic inheritance level.
But the government is still holding out against any retreat from the basic proposals announced in last month’s budget. In the wake of the Budget, lawyers suspended writing wills and leading insurers have frozen sales of many life policies after trust specialists said millions of people would be affected by the changes, not just a handful of the very wealthy as predicted by the Treasury.
On Wednesday, the Society of Trust & Estate Practitioners (Step) had said that, on its reading of the proposals, the families of individuals who died without leaving a will would also be hit. “We don’t think the finance bill will be adapted,” John Riches, chairman of the Step’s technical committee told the paper. “But there is still time to talk these things through. It would benefit from a period of reflection.
The professional organisations plan to write to Dawn Primarolo, paymaster-general, today to explain their views and seek a meeting, while on Thursday, both sides stuck to their estimates of the numbers likely to be affected, with the Treasury claiming 20,000 people, and the professional bodies placing the number at about 5m.
LLOYD'S OF LONDON fell into the red in 2005 as the insurance market was hit by big hurricane claims from the United States in the worst year on record for natural disasters, reports The Scotsman.
Lloyd's unveiled a £103m pre-tax loss, compared with a £1.37bn profit in 2004. It was the three-centuries-old market's first loss in four years, but it said its financial position remained strong and it expected 2006 to be a good year.
Overall, the insurance industry saw claims of $83bn (£47bn) last year, of which $65bn came from the hurricanes Katrina, Rita and Wilma that buffeted the US and the Caribbean.
Lloyd's had overall claims from the storms of £8.8bn, but net claims of £3.3bn, as the balance of £5.5bn will be paid by re-insurers from which Lloyd's businesses had bought policies to protect themselves in the event of major disaster.
But Lord Levene, Lloyd's chairman, is quoted as saying: "2005 was the worst year on record for natural disasters, costing the insurance industry far more than the impact of the 9/11 attacks on New York. For Lloyd's to emerge from such a year with just a small loss represents an excellent performance by the market.”
Although Lloyd's claims from the 2005 hurricanes were well above its £1.98bn hit from the World Trade Center attacks in 2001, Lloyd's overall annual loss last year was tiny compared with its £3.11bn loss in 2001.
Luke Savage, Lloyd's acting chief executive and finance director, attributed this to better risk-management procedures put in place since the 9/11 attacks. Lloyd's businesses must now submit their plans for the next year for approval by a monitoring unit known as the Franchise Performance Directorate, to ensure they are not taking excessive risks.
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The increase in minimum AE contributions has had little impact on opt-out rates - with cessations after April increasing by less than two percentage points, data from The Pensions Regulator (TPR) shows.
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