After Citywire revealed details on Gartmore's planned flotation yesterday we analyse whether the IPO is worth backing.

The asset manager has decided to list to reduce its large debt position and also to allow the Gartmore staff to realise a part of their shares. This follows a management buyout at the firm in 2006, which left private equity firm Hellman and Friedman holding 58% in the firm and Gartmore staff with the remainder.  

Gartmore has made significant inroads this year to diversify its business. However,  the IPO will focus investors' minds on the group's dependency on equity markets and its star European fund manager Roger Guy .

With the outlook for equities uncertain, the atmosphere at Gartmore's headquarters at Fenchurch Place is sure to be charged. Having said that the group is in a much better position than it was 12-months ago.

Reasons to be positive

Stellar hedge fund arm:

Gartmore's hedge fund business is the jewel in its crown. It has stood up reasonably well in the credit crunch where the industry suffered large scale redemptions. Performance across the range has been respectable.

According to data seen by Citywire the average annualised return across the hedge fund business is 15%. The flagship AlphaGen Capella fund, which was launched by Roger Guy in 1999, has led the way, delivering average annualised net returns of 14% since launch.