Company claims that the market for jersey-based funds is too limited
In a strategic move to favour a pan-European fund base over a traditional Channel Islands one, Gartmore has decided to forego Jersey in favour of Luxembourg, closing nine Jersey-based funds and launching five in its Sicav.
The assets from Jersey will be merged with four of the new funds and the whole European range will be sold into both continental Europe and four newly-registered states: Jersey, Guernsey, Isle of Man and the UK. The new funds are all mirrors of existing UK Oeics and the Jersey assets will be shifted into the Sicav sub-funds with the most appropriate mandate (see table).
The funds to be added to in the Sicav are the US Opportunities fund managed by Gil Knight, Asia Pacific fund managed by Philip Ehrmann, Latin American fund managed by Chris Palmer, Global Focus fund managed by Neil Rogan and the Sterling Bond fund managed by Alix Stewart.
The nine Jersey funds that are to be shut down - all Gartmore Govett Securities and Investments Ltd (GGSIL) branded - have been combined and merged with four of the new Luxembourg vehicles. For example, the GGSIL US Growth fund has been merged with the Sicav US Opportunities funds and the GSIL Japanese Growth fund merged with the Sicav Japanese fund.
The Latin America fund is the only new fund that will not receive assets from any of the Govett portfolios.
Kathleen Devitt, head of marketing, continental Europe, said: "The funds were merged because the Gartmore Govett Jersey range was much smaller and more difficult to register across countries. They were only registered in Jersey, UK and the Channel Islands. A Luxembourg base gives the portfolios a Ucits passport which makes it easier to register between countries. Also, the larger existing funds are easier to run and have lower TER ratios that are better for investors. These was also existing demand for these types of funds across Europe."
The existing managers already ran the funds from Govett, so there was no rationalisation of staff in the move.
Adding the four new jurisdictions to the registered targets of the Gartmore Sicav brings the total to 17 jurisdictions.
Despite the apparent rejection of Jersey as a fund centre by Gartmore, the jurisdiction remains bullish about its future.
Phil Austin, chief executive of Jersey Finance, said: "Jersey is not a major retail centre. Companies that want direct access to Europe such as Gartmore, Fidelity and Perpetual have moved to Luxembourg and Dublin. However, Jersey's non-retail business has been growing and there is now a real interest in alternative investments from the centre."
£92bn transferred since 2015
Achievements, charity work and other happy snippets
Since first announcement