Gartmore rocked by fresh defections as Roger Guy and Dominic Rossi quit

TROUBLED investment group Gartmore yesterday cleared the way for a sale after it was rocked by the departure of one of its star fund managers.

The London-based fund management firm has tasked Goldman Sachs with a strategic review of its future that will consider options including a merger or a sale. It also announced a 10 million cost-cutting plan that will see its headcount reduced. The firm said it would provide an update by next March.

Gartmore's share price plunged 15 per cent after Roger Guy, who runs the 3.5 billion European Large Cap team, announced that he would retire from day-to-day fund management early in 2011 after 17 years at the company.

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It was also rocked by news that chief investment officer Dominic Rossi is leaving to join fund management rival Fidelity, while Darrell O'Dea, a senior portfolio manager, has also resigned.

The firm was already reeling from the loss in September of experienced fund manager Gervais Williams and the controversy earlier this year surrounding Guillaume Rambourg, who was suspended and later quit over an in-house investigation into claims that he breached company rules.

The crisis over the summer sparked massive outflows as investors took a net 1 billion out of Gartmore's funds in the three months to the end of September.

Mark Williamson, an analyst at KBC Peel Hunt, said: "The loss of Roger Guy hard on the heels of Guillaume Rambourg and Gervais Williams, together with uncertainty over the group's ownership, will halt any fund inflows while the group is likely to be hit by a tidal wave of outflows."

But Williamson suggested one potential suitor, Aberdeen Asset Management, was now off the acquisition trail. "Aberdeen has a distinct style of acquiring assets rather than people and Gartmore does not fit that strategy," he said.