UK – The roughly £65m (€95m) defined benefit pension scheme of fund management group Gartmore will be shut and replaced by a new defined contribution scheme following a management buyout of the firm, Gartmore has told employees.

Gartmore, together with US private equity firm Hellman & Friedman, initiated a £500m management buyout of the company from owner and US insurer Nationwide.

The move plugged the company’s scheme deficit due to a cash injection of just over £53m by Nationwide following negotiations with H&F, Gartmore chief executive Jeff Meyer told IPE.

This injection has further highlighted the importance scheme funding levels can play during corporate takeovers.

The DC fund is due to be up and running within the next few months, and Gartmore will consult with employees about the scheme. The establishment of a new pension fund will also not result in a review of existing fund managers, said Meyer.

The management buyout has also seen four senior Gartmore directors tender their resignations.

Hedge fund division chief Charles Beazley, former fixed income head Roger Bartley, UK equities head Jon Thornton and Pacific and emerging markets chief Philip Ehrmann are leaving the group, said Meyer.

They will not be replaced following a decision by Gartmore to flatten its management structure.