Hellman & Friedman LLC, the private equity firm that joined with the management of Gartmore Investment Management PLC to buy the company from Nationwide Mutual Insurance Co., expects a growing number of European money managers to seek independence.
In a telephone interview shortly after the Gartmore deal was announced on May 25, Patrick Healy, managing director who heads up Hellman & Friedman's European operations, said the awakening of Europe's "equity culture" should accelerate the trend there toward separation of distribution and manufacturing that is already well under way in the U.S. This, he said, will pave the way for deals aimed at better "aligning incentives" by putting equity in the hands of money managers.
In the case of Gartmore, market watchers said the "key man" whose interests needed aligning was Roger Guy, investment director and the executive credited with building up the firm's sought-after hedge fund operations.
In the end, said one Gartmore veteran who declined to be named, it was Mr. Guy's preference for working with Hellman & Friedman that gave the San Francisco-based firm a leg up in the competition to buy London-based Gartmore.
As part of Hellman & Friedman's focus on aligning incentives properly, executives there have said in the past they prefer the managements of firms they back in buyouts to own far more equity than Hellman & Friedman does.