UK – State Street Global Advisors (SSgA) is to take over the £18bn (€30bn) passive equity business of UK fund manager Gartmore for an undisclosed sum, it was announced today.
Gartmore says the deal will allow it to focus on its active management operations, which account for some 95% if its business.
Some two-thirds of the £18bn is in client relationships that SSgA will directly acquire, whilst the remaining clients accounting for £6bn in assets will receive passive equity services on a “sub-advisory” basis from SSgA, but remain clients of Gartmore.
These are mainly passive unit trusts and institutional clients that employ simultaneous active and passive techniques.
The deal does not touch upon Gartmore’s index tracking unit trust business.
As part of the agreement, SSgA will take on Gartmore’s passive equity team immediately.
And according to the firms Gartmore’s passive clients are not expected to see many changes but will benefit from SSgA’s additional resources and services.
Stewart Reed, head of passive management at Gartmore, comments: “We are especially pleased to join SSgA. They are committed to our continuing growth in the passive equity business.”