PA ANALYSIS: Henderson to review enlarged range

Following the Gartmore deal, Henderson has a massive fund range even after its planned fund mergers.

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To some the integration of Gartmore’s funds may have felt slow considering the deal was announced in January. However, with the incorporation of the Gartmore range on Henderson’s administration system and the elimination of the Gartmore brand from the portfolios two weeks ago, the integration is almost complete.

The next step in the process is an EGM being held on 27 July to approve the merger of 13 different funds into Henderson portfolios. Just one of the affected funds is actually larger than its Henderson counterpart, Gartmore Cash.

If approved, the mergers are slated for 12 August. However, although the group has no immediate plans for further actions of this nature, the size of its new range may mean additional rationalisation is inevitable.

While the 13 Gartmore funds will disappear in August, it still leaves 18 onshore funds to continue on under the Henderson brand and a further 14 existing offshore propositions. This gives Henderson a fund range of more than 60 onshore, retail, open-ended portfolios.

If institutional and offshore funds are included the group now has over 130 products, not counting the group’s investment trust, property or hedge fund ranges.

Henderson decided on the August mergers based on whether or not the funds’ managers came over from Gartmore and whether or not there was an obvious cross-over with its existing range.

Europe funds dominate

However, not all cross-overs were dealt with this way.

None of Gartmore’s European funds are involved in the mergers, despite the fact that just one European equities manager, John Bennett, moved over to Henderson. In total 12 Gartmore managers went to Hendersons.

Considering it also recently took on New Star’s portfolios, of which European equity was also present, it leaves the group with an offering of more than 15 different, long-only European equity portfolios, six onshore and nine offshore.

This places the group in a dominant position in the IMA’s Europe ex UK sector with just Scottish Widows and Standard Life Investments featuring a comparable number of funds.  

Over 12 months to 21 July, two of the Henderson European funds are top quartile in the sector: Special Situations and Focus. Over three years to the same date, just Henderson European Growth is top quartile.

Multi-manager

With the arrival of Gartmore’s Tony Lanning, and having subsumed New Star’s multi-manager range, the fund-of-funds capability at the group has been strengthened.

Three of the Gartmore funds-of-funds are being merged away into their larger Henderson counterparts with its Absolute Return fund being left alone.

After these proposed mergers Henderson MM Active will be the sixth largest fund in the Balanced sector, with combined assets of more than £460m. Within the Balanced sector, the enlarged Managed fund, at £565.7m, ranks as the 14th largest while the £735m Income & Growth portfolio ranks 9/123 in the Cautious sector in terms of asset size.

Many of those funds larger than Henderson’s MM offerings are single-manager portfolios but of the multi-manager competitors, Jupiter’s Merlin range still dominates in terms of assets under management.

Going forward

Hendersons is not the only group to feature a large range, which is why so many intermediaries and commentators often call for greater rationalisation across the industry.

Further streamlining at Henderson is likely to happen in the months ahead but for now the dust appears to be settling on Henderson/Gartmore; so long as shareholders approve the mergers at the end of the month.

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