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Gartmore Investment Management is planning to rebuild its entire UK retail division following several years of flat sales and limited product development.

As previously revealed in Investment Adviser, absolute return products will be a key component of Gartmore's UK retail push, according to Phil Wagstaff, global head of distibution. Gartmore has managed hedge funds for institutional clients since 1999, but its retail range remains long-only.

"We are in the process of rebuilding our UK retail business," Mr Wagstaff said. "We haven't done much in the way of product development for a few years, and asset gathering has been flat for three or four years."

The strategy may also lead to a new equity income range, he suggested. Gartmore currently has only one equity income product in the Oeic range, the £227m Gartmore UK Equity Income fund, which ranks in the third quartile of the IMA sector over three years to 16 June.

"Because of the high-alpha way we run money, we don’t have much in the way of income products," explained Mr Wagstaff. "If the demographic is such that income will grow, it’s important we develop our range."

He said Gartmore's strategy involved people, branding and products as three key elements. The people were already in place, Mr Wagstaff said, highlighting his appointment last year, which carried an explicit brief to "re-energise" the UK retail division. Gartmore appointed Richard Pursglove as head of UK retail in March.

"We also have to get the branding right," explained Mr Wagstaff. "Eventually this will mean new advertising campaigns."

But he stressed products were the most important element of Gartmore's strategy. "There is a big and growing market for the products we've got, but there are gaps in our UK retail range, particularly in the absolute return space," he said.

Mr Wagstaff confirmed nothing would happen immediately, but suggested Gartmore would eventually launch a whole fleet of funds.

"I’m not talking about one fund," he said. "In the fullness of time I can see us moving into this space across all our markets."

He also admitted the UK equity range would require attention if Gartmore was to expand its UK retail asset base.

"We have to rejuvenate the UK long-only record," he said. With the exception of one tracker – the £348m Gartmore UK Index fund – all of Gartmore's eight products in the UK equity sectors were third or fourth quartile over three years to 16 June.

According to Mr Wagstaff, performance had suffered on the UK equity desk due to overweight positions in financials and housebuilders.