UK – Gartmore Investment Management is to outsource the investment management of its cash management business to Morgan Stanley Investment Management.

The two companies announced today that they have signed an agreement for the transfer of the investment management responsibility of Gartmore’s liquidity assets to MSIM. These assets include 715 million pounds, 115 million dollars and 110 million euros.

Gartmore will maintain its existing client service arrangements and will continue to offer cash management products to investors.

The outsourcing agreement will begin late this year, with MSIM initially acting as sub-investment manager on Gartmore’s range of cash products.

The funds will be managed at MSIM by David Hynes, Gartmore’s former head of cash management who will be moving across to MSIM as European head of cash management.

Roger Bartley, global chief investment officer of fixed income at Gartmore said: “Ultimately, Gartmore is not a core cash manufacturing house. We have been operating at the smaller end of the institutional business for some time, albeit with outstanding performance. We believe this partnership provides the ideal answer for Gartmore and a ‘best of breed’ solution for clients.”

A spokesman for Gartmore added: “The clients will still have the same manager and the same investment process, but they will benefit from the scale and liquidity offered by MSIM.”

Speaking for MSIM, Robert Sargent, head of EMEA business management, said: “This represents another important step in the development of our business in Europe, and follows on from the launch of our dedicated institutional liquidity vehicle in June. Gartmore’s weighting towards Sterling assets will complement our existing Dollar and Euro assets and give us scale in the Sterling liquidity business.”