The Gartmore Guru Who Is Hedging His Bets on a Return to the Bull Market; CITY & FINANCE

Daily Mail (London), August 19, 2004 | Go to article overview

The Gartmore Guru Who Is Hedging His Bets on a Return to the Bull Market; CITY & FINANCE


Byline: CLAIRE OLDFIELD

STEPPING into the shoes of redoubtable Marks & Spencer chairman Paul Myners cannot be an easy task - but Glyn Jones, chief executive of leading City fund manager Gartmore, has made a career out of it.

Myners first recruited Jones to the NatWest Group. Jones then followed Myners to blue-blooded Coutts where he became the Queen's bank manager.

Jones, 52, moved to Gartmore in 2000, taking the chief executive position and bumping up Myners to chairman.

This latest role has, by any measure, been a tough one for Jones. During the early months of his appointment the bull market was still running and, says Jones, 'things looked good'. But shortly afterwards the dotcom boom came to an abrupt halt.

'I came in at the tail end of the bull market and have been managing it to a recovery phase,' he says. 'We are in a good position now because we have repositioned the business and have a clearer focus.' Gartmore began life in the late 1960s as the private investment arm of a wealthy clan of Scottish aristocrats. In 2000 it was sold to Nationwide Mutual Insurance of the US.

Under Jones and its American parent Gartmore, which manages [pounds sterling]41.2m of clients' money, has become a radically different business. Jones has steered it away from its position as one of the UK's big four pension managers and now concentrates on high-margin business.

range of funds has been revamped, new people have been hired and it has ventured into the complex world of hedge funds where it has built a [pounds sterling]3.5bn business from a standing start. It has been a hard slog, but Jones says that Gartmore is now 'in a reasonably strong market position'.

Jones was quick to recognise the growth potential in the hedge fund industry. 'When I arrived the hedge business was small, but we took an opportunity and turned it into strategy.' He describes hedge funds as 'the sexy area of fund management' - though many would also consider it risky and arcane.

Fund managers have come in for a great deal of criticism over their sometimes lacklustre performance. Jones argues that picking the right investment portfolio is 'not like turning out widgets, it is not that precise'.

Instead he describes it as 'an equal mix of art and science'.

'I recognise that at different points in time we may not be right, but people won't be right all the time. We aim to be more right than the market.

I don't take the view that if someone has a bad year they have become a bad fund manager.' Gartmore's luck may be about to turn, along with that of the rest of the market. Despite worries over the soaring oil price, world economic growth appears to be back on track and Jones is no longer worrying about major slumps.

One cloud on the horizon, though, is China, where Jones points to an overheating economy.

He says: 'The economy is moving. The question is how fast it is going up and what are the impacts on bond and share markets. Also the oil price is going up and maybe that will feed through to inflation.' Gartmore's UK offices are situated in an inauspicious part of the City, just behind Tower Hill Tube station. But from these offices, Jones wields considerable power.

As I arrive, an advertising hoarding behind the building is being stripped of a poster for another company and replaced with one for Gartmore.

'Of course I complain if that particular advert is not ours,' says Jones. 'I want staff to feel good about the company they work for.' Talking about the workforce has touched on a nerve. Jones says the initial attraction of the job was that he inherited a business that had a talented team of investment professionals among its 800-strong staff.

But since taking over he has had to make some tough decisions including the axing of jobs, though 104 have gone as part of an outsourcing process to HSBC. …

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