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ESG: The metrics jigsaw


UK roundup: Henderson, Gartmore, Paternoster, Rothesay Life, Club Vita, DWP

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  • UK roundup: Henderson, Gartmore, Paternoster, Rothesay Life, Club Vita, DWP

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UK - Henderson Group has announced plans to acquire fund manager Gartmore for £335m (€403m), bringing to an end several months' worth of speculation surrounding the company's fate.

The deal values Gartmore's shares at 92.1p a share and is lower than initially expected.

Andrew Formica, chief executive at Henderson, praised the deal as a natural fit and said it would result in an expanded product range, singling out absolute return as one area that would see growth.

He added: "Its recent travails should not overshadow the fact Gartmore is one of the best known firms in UK fund management and its assets are performing well."

A spokesman for Henderson confirmed the Gartmore brand would be dropped once all funds had been completely integrated into Henderson's systems.

He said the company's management team was likely to stay on only during this transition period.

Investors will be able to swap three Gartmore shares for two new shares issued by Henderson.

Stathclyde Pension Fund, one of the largest local government pension schemes in the UK, with £10.5bn in assets, last month announced it was considering replacements for Gartmore following a number of fund manager departures and the announcement that the company was considering a sale.
The merged company will oversee assets in excess of £78bn.

Meanwhile, Goldman Sachs has finalised its acquisition of Paternoster, following approval by the Financial Services Authority (FSA).

The investment bank also confirmed that a merger between Paternoster and Rothesay Life was likely to happen in the future.

In a statement, it said: "In the short term, Rothesay Life and Paternoster are to be held by Goldman Sachs as separate insurance companies. There is an intention to combine the two over time subject to an appropriate legal process overseen by the FSA."

In other news, a new study has recommended linking the state pension age to either an individual's life expectancy or their lifetime earnings.

Conducted by the Oxford Institute of Ageing at the University of Oxford and supported by Club Vita, Hymans Robertson's longevity provider, the study also said a link should be established between the Office of National Statistics' healthy life expectancy (HLE) measure, as this gave a better indication of how long people would be able to continue working.

Professor Sarah Harper, the institute's director, said regional differences in life expectancy were much more pronounced than differences between office and manual workers.

"Interestingly, manual work is a less important factor in life expectancy, as male non-manual workers only have an extra year on manual workers in predicted life expectancy," she said.

"However, a healthy lifestyle can add four or five years to both men and women's lives after 65."

Steven Baxter, longevity consultant at Club Vita, called on the government to acknowledge that the current system, where one measure is applied to all retirees, is no longer feasible.

"The degree of variation in life expectancy across the UK means we cannot hope to have a fair system based on the present one-size-fits-all retirement age," he said. "Variable state pension ages are a potential solution to this problem."

He added that one possibility was splitting the system between a flat-rate pension and an additional pension scheme that is increased according to the economic activity of the retiree.

"This would encourage greater participation in the labour force and lessen the problem of declining numbers of contributors to the state pension pot," he said.

The report further proposed that the state pension age be amended each time the work-retirement ratio exceeds a certain threshold, saying that pensioners should never spend more than a fixed amount outside of the workforce.

Finally, according to research conducted by the National Institute of Economic and Social Research (NIESR) for the Department for Work and Pensions (DWP), the UK's GDP would be 6% lower by 2030 without the planned increase in the state pension age.

Additionally, NISER calculated that a one-year increase in working life would increase GDP by 1% six years after implementation.

Under current proposals, the state pension age will reach 66 by 2020, rising to 68 by 2046.

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