Bottom Line: Gartmore euphoria

ONLY last month Gartmore was playing down suggestions that it might command a stock market value as high as pounds 300m.

Yet such has been the institutional enthusiasm for the pension fund manager's shares that Kleinwort Benson and Cazenove have been able to price the flotation offer at 168p. This values Gartmore at nearly pounds 340m.

The firm has a record of consistently good investment performance. This has enabled it to grow funds under management from less than pounds 7bn in 1990 to more than pounds 18bn now. In the process it has become one of four firms that win the lion's share of pension fund management contracts.

There is little doubt that Banque Indosuez, Gartmore's French parent, has chosen an opportune moment to sell. David Watts, investment director, has described last year's investment successes as unrepeatedly good.

Still, Indosuez is scarcely taking its money and running. It will retain a 75 per cent stake. Gartmore says the motivation for the float came from its own management. It is forecasting profits this year of at least pounds 24.5m, up from pounds 14.9m last year and pounds 9.4m in 1990.

After placing 14 per cent of Gartmore's shares with more than 100 institutions, and setting aside 3 per cent for management and employees, only 8 per cent of the company is available in the public offer. Applications must be in by next Thursday.

Gartmore gives every appearance of being a well-run and successful company. While the prospect of earnings recovery continues to support stock market levels, investors should have few fears about buying the shares.