Gartmore ready to roll FoFs into one

Active, Global High Alpha and High Alpha likely to fuse into single high-alpha offering.

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Gartmore Investment's three smaller funds of funds are likely to be fused into one high alpha offering, head of multi-manager Tony Lanning has confirmed.

The future of the £6.3m Active, £4.2m Global High Alpha and £2.3m High Alpha funds has been uncertain since Gartmore announced the review of its range in April.

While Mr Lanning emphasised the process of merging the funds was in its infancy, he said they would probably be transformed into one vehicle.

"We run more than £400m in our two larger products, and all our efforts at the moment are going into getting those right," he said. "In terms of the three smaller funds, we are making lots of changes to the underlying holdings, but as to bringing them together into one fund, that's a work in progress."

Since Bambos Hambi's departure, Mr Lanning has been examining core positions across the five multi-manager funds.

At the start of May he switched US exposure from Tom Walker and David Forsyth's £321m Martin Currie North American fund to its new High Alpha counterpart for Gartmore's aggressive portfolios.

Last week, Mr Lanning was finalising a review of the range's UK holdings which, among other things, has seen him plough spare cash into fixed income, adding James Foster and Alex Ralph's £240.3m Artemis Strategic Bond fund and John Pattullo and Jenna Barnard's £242.2m Henderson Strategic Bond fund to the mix. An existing stake in Richard Woolnough's £155.3m Optimal Income fund was topped up.

The move has brought Gartmore's fixed income levels to 25 per cent across its multi-manager funds, up from just under 20 per cent.

"We have avoided the route of using very defensive credit managers, preferring those who have the ability to be more flexible in their approach," Mr Lanning explained. "We are still cautious on the world, but within fixed income there are opportunities we want to be able to move quickly to take advantage of."

Changes to the funds' UK equity content are expected to be finished this week following a round of manager meetings. Mr Lanning is keen to increase his underweight to the home market, believing it is more closely correlated to the US than many fund managers would like to admit.

He added: "Looking across the board, the investment process at Gartmore hasn't changed, but we are looking to make it a bit more dynamic in making the underlying holdings work, so every UK position we have has to earn its place."