Gartmore, Jupiter look to tie in staff

Change can be a stressful and uncertain business. But if you're a top fund manager, it can also be distinctly lucrative.

Two UK fund management groups, Gartmore and Jupiter Asset Management, are understood to be offering their star performers hefty incentives to stick around while changes take place.

Gartmore is understood to be on the brink of being sold to for 500m to US private equity group Hellman & Friedman. Commerzbank, the owner of Jupiter Asset Management, is said to be contemplating floating the fund manager on the UK stock market for as much as 1bn.

The Financial Times reports that Jupiter is offering its key fund managers phantom shares which will be bought out by Commerzbank if the company floats, subject to performance incentives. It says Gartmore's fund managers are also being offered a generous dollop of equity in advance of the sale.

There are downsides, however. One search consultant told eFinancialCareers that Gartmore's top staff are being tied in with investment banking-style notice periods of six months compared to the fund industry's standard one to three months. But he says these restrictions will lapse, and the stock offered to tie in the company's fund managers will also lapse with immediate effect if the company is broken up subsequent to the sale.

The dangers of not tying in key staff in the fund management industry are all too clear. In the uncertainty ahead of the sale, two of Gartmore's European fund managers have already eloped to Britannic Asset Management, and headhunters say others are eyeing the door too.