Henderson Group plc has today completed its acquisition of New Star just nine weeks after announcing the deal. The firm has attracted key New Star managers by offering them a £4.2 million deal in cash and shares. The firm is expected to pay some £2.9 million in cash with 1.64 million shares worth about £1.34 million. The smaller emphasis on stocks does not come as a surprise after New Star managers watched the value of their stock holdings diminish as the company collapsed.
New Star managers joining Henderson’s 50-strong equity team include Richard Pease, Guy de Blonay, Nick Sheridan, Mark Harris, Craig Heron, Trevor Green and Simon Rowe. James Gledhill, manager of New Star
Fixed Interest New Star High Yield Bond and New Star Extra High Yield Bond, will join Henderson’s fixed-income team. On the property front, Roger Dossett, who was previously chief executive of property fund management at New Star, will jointly manage New Star UK Property Unit Trust and New Star International Property fund with Henderson’s existing property team. Mark Harris and Craig Heron have joined the multi-manager team, led by head of equity Bill McQuaker, and will be responsible for New Star’s entire fund of funds range. Henderson managers will replace New Star managers who won’t be joining the firm, including Charles Deptford, Jamie Allsopp, Toby Thompson, Tim Steer, Nigel Marsh, Ian Beattie, Lucy Bernays, Phil Roantree, Rob Jeffree and Clare Bryant.
Capita extends suspension on CF Arch Cru funds
Capita Financial Managers Ltd has extended the suspension on the CF Arch Cru Specialist Portfolio and CF Arch Cru Investment Portfolio until at least the end of May 2009. The funds were suspended in March because of illiquidity in the underlying assets of the funds and a rise in redemptions. Capita, the funds’ administrator, and Arch Financial Products LLP, the investment manager, claim illiquidity remains an issue and will continue to review the fund’s assets over the next month. They are required to advise the FSA on the outcome of this review in the next 28 days, but investors should note that the suspension could be extended beyond the 28 day period. It’s important to note that investors have not been advised what the current value of the underlying assets are. While we understand they may well be hard to value at this time, communication with shareholders needs to be as transparent as possible. In this case, fundholders appear to have been left largely in the dark, which reflects poorly on all parties involved.
ING reveals plans to integrate global investment management operations
ING plans to integrate its investment management businesses in Europe, the Americas, Asia and Asia Pacific as well as its Real Estate investment management business into a global investment management division. This consolidation will slash costs of running duplicate marketing, sales, operations and distribution units and is in line with announcements made by ING earlier this year on the need to reduce costs.
iShares sale announced
In a move that surprised no one at this point, Barclays announced today the sale of its iShares ETF division to European private equity firm CVC Capital Partners for £3bn. Barclays is financing a large chunk of the deal, lending £2.1bn towards the purchase. The move leaves Barclays with an improved Tier 1 capital ratio, add roughly 54 basis points to the figure. The deal gives Barclays the right to shop for better bids over the next 45 days, though it would have to pay a £120mn break fee to CVC if it agrees to a transaction with another party. As part of the transaction, Barclays will receive a cash payment worth 20% of the equity return on the iShares business if CVC is able to get a 2x return in the first year and 2.5x thereafter, and a 25% internal rate of return (IRR) from iShares.
Morningstar releases Q1 performance review for funds domiciled in Europe and Asia
Morningstar has this week released its quarterly performance review for funds domiciled in Europe and Asia. Highlights of first-quarter 2009 fund performance include: Selected higher-risk areas began to outperform: high-yield bond funds, small-cap equity funds and Russia and Latin America funds all fared better than the norm; among specialty funds, top performers were those in the Morningstar Sector Equity Precious Metals category; energy funds also fared well, with a small loss of 3.6%. Funds focused on financials, property, and utilities fared worst; the industry continued to contract: The number of fund classes liquidated or merged increased more than 60% year on year; and merger and acquisition activity among fund houses continued to heat up, creating risks for fund investors. You can read the full report here.
Morningstar qualitative ratings and reports issued this week
Morningstar issued new qualitative ratings and reports on a number of funds available to UK investors this week, including Old Mutual Select Smaller Companies and Schroder ISF European Special Situations. Click here to see the full list.
