Fund Times: 10 – 14 November
New Star Forced to Restructure Debt after Outflows; Skandia Switch Portfolio Managers; IMA Creates New Property Sector; Smith & Williamson bring European Growth Trust Back in House; and Jupiter Launches Sterling Class for Merlin Fund
New Star Asset Management announced this morning that it has had to renegotiate its banking covenants after a spate of outflows and tumbling markets caused the firm's assets under management to fall by £3.1bn between 30 June and 30 September 2008. The firm says assets have fallen by a further £2.4bn since the end of September, leaving it with £14.3bn at 13 Nov, down from £19.8bn at end of June. John Duffield, New Star’s chairman, noted that although banks understand their predicament the group will be forced to take cost cutting measures. The recent troubles have also significantly effected the company’s share price, which has fallen from almost £5 to under 30p increasing speculation that a rights issue may be need to raise fresh capital from investors.
Skandia Switch Portfolio Managers
Skandia Investment Group (SIG) has this week announced the appointment of new managers to their European and Japanese portfolios. Allianz Global Investors’ subsidiary company RCM will take on the management of Skandia’s European fund. RCM’s Dirk Enderlein will take over the portfolio from Lazard, who will still continue to run other sleeves of Skandia’s multi-manager portfolios.
Meanwhile Skandia has also replaced JP Morgan with Polar Capital on the group’s Japanese equity portfolios. The Japanese portfolio forms the equity component of Skandia’s Japanese Equity Blend, Cautious, Balanced, and Aggressive funds – it will now be managed by Polar’s James Salter.
IMA Creates New Property Sector
Following consultation with its members, the IMA have this week announced plans to create a new property sector. The sector will come into existence on 1 January 2009 and will include all types of UK authorised funds investing in direct property and/or property securities. To qualify a fund must invest predominantly in property which the IMA describe as: investing at least 60% of their assets directly in property; or investing at least 80% of their assets in property securities; or when their direct property holdings fall below the 60% threshold for a period of more than 6 months, investing a sufficient amount of the balance of their assets in property securities to ensure that at least 80% of the fund is invested in property, at which point it would become a hybrid fund.
Smith & Williamson bring European Growth Trust Back in House
Follow the hiring of Mark Pignatelli, Smith & Williamson have taken the decision to bring their European Growth Trust back in house. This is further bad news for New Star, who had managed the fund since July 2005, and adds to the growing list of mandates the group have lost in recent months. Pignatelli is a highly experienced European fund manager having spent 13 years at Barings where he was head of European equities before joining Schroders in 2000 where he ran the European fund before taking up the position of CIO. He left Schroders in 2004 to establish Rebus Capital where he ran long/short European funds but closed the company earlier in 2008. The changes will take effect from December 1
Jupiter Launches Sterling Class for Merlin Fund
In order to makes its Jupiter Merlin International Equities Portfolio more accessible to UK investors Jupiter Asset Management has this week announced the creation of a sterling share class for the fund. However the fund, which is a sub-fund of the newly-launched Jupiter Merlin Funds Sicav, is yet to be registered for retail distribution within the UK. The offering is an unfettered fund of funds, meaning it is not restricted to only investing in Jupiter funds, and is managed by Jupiter’s fund of funds team - John Chatfeild-Roberts, Peter Lawery and Algy Smith-Maxwell.
