New Star Asset Management Share Discussion Threads

[gooner6] 21/1/2008 08:04

Article in yesterdays Times or mail regarding NSAM being a takeover target.

[evalongoria] 20/1/2008 17:40

Next stop willbe stopping punters from cashing in on their various funds

we could see a run on NSAM funds in the next month - a very vicious circle

[richaims] 20/1/2008 13:53

Savers hit by new property fund plunge

Norwich Union tipped as next to impose freeze

Heather Connon and Ruth Sunderland The Observer, Sunday January 20 2008

THE PANIC in commercial property funds is likely to intensify this week, as financial advisers are tipping Norwich Union to be the next asset manager to put a freeze on withdrawals by small savers.

Two other large funds run by insurance companies have already locked in their customers. Insurance company Aegon said last week that investors in its Scottish Equitable property fund may have to wait up to a year to get their money back and Friends Provident introduced a six-month delay on redemptions from its property fund in December.

So far, none of the large unit trust funds - including those run by Norwich Union, New Star and Scottish Widows - have introduced restrictions. But they have started valuing their funds fortnightly and all have reported sharp falls in recent weeks. Norwich Union's fund has fallen almost 12 per cent over the past three months.

Its cash balance has also been sharply eroded; at the end of December, the NU fund had just 6.4 per cent in cash, less than half the usual amount, despite selling £165m of property during the month. That is similar to the level of cash in Scottish Widows' fund.

Mark Dampier of financial adviser Hargreaves Lansdown said he expected Norwich Union to be next to introduce restrictions. 'There is a steady drip drip of money coming out. The question is, how long will it be before money starts going in again? There is no reason to buy a property fund now.'

New Star's shares plunged after it issued a profit warning and slashed its dividend. Founder John Duffield, who owns 12.5 per cent of the company, said he had personally lost £100m in the past six months.

Investors withdrew £500m from New Star in the second half of 2007, including about £300m from the £1.5bn UK Property Unit Trust, which had been very popular with private investors. Duffield said he did not expect to have to restrict withdrawals, as the fund had liquidity of 18 per cent and buyers for a further 30 per cent of assets at slightly above book value.

Duffield, who admitted other funds in his stable have also performed poorly, is planning a pay freeze and management shake-up. Senior manager Stephen Whittaker, who runs three funds, including the UK Growth trust, is likely to be kept on but will only manage one fund in future. 'I am not really into sacking, but one or two people probably will go,' Duffield said.

He added that he is gloomy about prospects for the stock market and thinks London and Wall Street could drop 10 per cent between now and June. 'We are not even all the way into the woods, let alone out of them,' he said.

Property funds were among the best-selling retail investments during 2006 and the start of 2007. But rising finance costs, because of the credit crunch and fears of an economic slowdown, have sent property prices plunging.

That has sparked a wave of selling by small investors. Funds will generally keep cash balances to avoid having to sell properties to meet redemptions, but these are being used up.

[ihavenoclue] 19/1/2008 15:30

richaims - 19 Jan'08 - 13:50 - 116 of 116 (Filtered)

[richaims] 19/1/2008 13:50

Lex , FT :-

New Star slumps

Is yesterday's 30 per cent dive in New Star Asset Management's stock price overdoing it? Hardly. The former darling of the UK retail fund sector is in a nasty spot of bother.

[scribbler101] 18/1/2008 19:21

Catch a falling star and put it in your pocket,
Let it never fade away?
Catch a falling star and put it in your pocket,
Save it for a rainy day?

[richaims] 18/1/2008 18:37

I will not be surprised if this falls a lot further next week following all the forthcoming negative weekend press coverage about today's profit warning .

[gooner6] 18/1/2008 17:28

Bloody great buy at 88p........if it drops to 95p i will be back!!

[vision88] 18/1/2008 17:14

its a good buy at 88p

[gooner6] 18/1/2008 16:40

Sold out at 106.......will keep an eye on this though.

[ihavenoclue] 18/1/2008 14:57

gooner ... we must like pain and suffering ... i bought in here today too

[micktown] 18/1/2008 14:43

To be contrarian, I have decided to invest in New Star's higher income fund which is about 40 per cent in banking and insurance.

[gooner6] 18/1/2008 14:36

When the press start telling investors to get out then that is the time to buy.

Equally the reverse works.

Media tend to be behind the times.

These so called experts advising when to buy and sell, but work as journalists.......wonder why that is?

[richaims] 18/1/2008 14:23

With all this negative press coverage , I can't help but think the share price might fall a lot further .

[richaims] 18/1/2008 14:18

Guardian NSAM article :-

New Star shares dive as it admits £500m fund exodus

Graeme Wearden guardian.co.uk, Friday January 18 2008

This article was first published on guardian.co.uk on Friday January 18 2008. It was last updated at 12:35 on January 18 2008.

New Star Asset Management shocked the City this morning with a grim warning that investors have been pulling money out of its funds, many of which it admitted have been performing poorly.

It also admitted that profits for this year will be "significantly lower" than this year.

This followed yesterday's grim news from Scottish Equitable, which was forced to shut its property fund to withdrawals after a rush of panic selling decimated its cash reserves.

Shares in the fund manager nosedived by over 40% in early trading after it slashed its dividend and warned that it has been badly hit by the credit crunch and the slump in the UK commercial property sector.

New Star said that some European and UK mutual funds had performed badly against the wider market, having been "badly positioned for the combination of the credit squeeze and high natural resource prices experienced in the second half of 2007".

"In addition, New Star suffered from the sharp downturn in the UK commercial property market," it added.

The total value of its assets under management has dropped by £1.6bn since the end of June, to £23.1bn.

The net outflow of assets since June 2007 reached £0.5bn, compared with an inflow of £2.3bn in the first half of last year – indicating that investors began pulling their money out once the global financial turmoil began.

Although profits for 2007 will still match expectations, New Star – set up by UK financier John Duffield – admitted it was "not optimistic" about the outlook for 2008.

"As a result both of depressed market conditions and the poor relative investment performance of some of our principal products in 2007, there may be further net outflows of assets, at least during the first half of 2008," it warned.

It had previously told investors to expect a dividend of 9p a share, but said today it has decided to slash it to 5p a share to help maintain its financial position.

"We have a number of issues to address in the current year. We are committed to doing whatever is necessary to address the problems we have experienced with investment performance in certain of our products," said Duffield.

At midday, New Star's shares were 43p lower at 104p, a fall of nearly 30%

[richaims] 18/1/2008 13:52

Telegraph NSAM article :-


New Star shares plunge as funds slump

By Richard Blackden

Last Updated: 1:26pm GMT 18/01/2008


Shares in New Star plunged after the fund management group warned that profits this year will be significantly lower than in 2007 after a swathe of its funds underperformed the market.

New Star, which was founded by City heavyweight John Duffield, last month slashed the value of its UK property fund by 8.2pc as commerical property values in the UK continue to slump.

The company added today that its European mutual funds and some of its UK mutual funds have underperformed its peers because the funds were "badly positioned for the combination of the credit squeeze and high natural resources prices experienced in the second half of 2007."

The news sent the shares tumbling 62, or 42pc, to 85p in morning trading.

Analysts at UBS said today that "We do not see the company's outlook improving until either markets rebound or some high profile fund managers are hired."

In a short statement today, New Star said: "We are not optimistic about the outlook for 2008."

Tens of thousands of investors have rushed to buy commercial property funds over the past two years.


Yet UK commercial property has been in a sticky period, with many funds failing to deliver a positive return this year.

Hundreds of millions of pounds have already been withdrawn by nervous investors in recent months following the sector's slump.

The group saw its funds under management tumble 6.5pc to £23.1bn by the end of 2007.

Mr Duffield admitted today: "We are committed to doing whatever is necessary to address the problems we have experienced with investment performance in certain of our products."

Duffield established New Star after being pushed out of Commerzbank, which acquired Jupiter International, the company he founded in 1985. The City veteran is worth almost £500m according to the Sunday Times' 2007 Rich list.

Today's news comes days after the group demoted James Ridgewell after the fund he managed lost almost a quarter of its value over the past year.

Its European Growth Fund, which is managed by Richard Pease, fell about 50pc to 1.3bn euros in the six months to the end of November, according to the group.

New Star added today that its US institutional funds had performed well.

[richaims] 18/1/2008 13:40

Further falls likely ?

From Times Online January 18, 2008

Investor exodus sparks New Star profit warning

Credit crunch forces fund manager to cut dividend by 80% as more customers are expected to withdraw cash in 2008 NIck Hasell


New Star Asset Management has given warning on profits and cut its final dividend by 80 per cent, becoming the first fund manager to slash its payout since the onset of the credit crunch.

The FTSE 250 company, chaired by John Duffield, said that depressed market conditions and the poor relative investment performance of some of its funds meant it expected operating profits "to be significantly lower in 2008 than in 2007".

"We are not optimistic about the outlook for 2008," it said, warning that it expected more clients to withdraw their cash from its funds in the coming months.

The final dividend for the year to December 31, 2007 will now be 1p, making a total dividend of 5p, against the 9p that investors were expecting. New Star had become one of the most attractive income stocks in the FTSE 350, offering a prospective yield of 7.4 per cent at the end of last week.

The company said its UK mutual funds had been hurt by the credit squeeze and high natural resource prices in the second half of 2007, as well as the sharp downturn in the UK commercial property market.

As a result, the company's assets under management fell to £23.1 billion at the end of the year, down 6.5 per cent from £24.7 billion at June 30.

Net outflows of funds were £500 million in the second half, against inflows of £2.3 billion in the first, while the company anticipates further net outflows of assets, "at least during the first half of 2008".

John Duffield said: "We have a number of issues to address in the current year. We are committed to doing whatever is necessary to address the problems we have experienced with investment performance in certain of our products."

Elsewhere, RAB Capital, the hedge fund which is one of the two biggest shareholders in Northern Rock, said pre-tax profits for 2007 were expected to exceed £50 million, compared with £50.6 million last year. Analysts had forecast £53.8 million.

"The strong first half was followed by more difficult trading in the third and fourth quarters, when credit and liquidity issues impacted negatively on equity markets," the company said in a statement. Shares in RAB Capital fell 7 per cent, or 5¼p, to 65½p, in early trading.

[macsam] 18/1/2008 11:39

Sub prime has little to do with New Star that is more a banking issue. NSAM must be one of the most oversold stocks on the market at this minute. It would not surprise me to see Duffield buying back the Company at the current price level.

[sprattyken] 18/1/2008 11:38

Just got a few for 103.5. Tight stop though!

Expect rumours of a takeover...

[tsmith2] 18/1/2008 10:29

intra day chart accelerating upwards so quite possibly 120

[gooner6] 18/1/2008 10:27

120-125 close in my opinion.

[gooner6] 18/1/2008 10:25

In my opinion not.

[mike24] 18/1/2008 10:24

or catch a falling chainsaw?
ben b says sup-prime losses could reach
$250,000,000,000 edit nothing to do with NS but financial services/investing/comm.prop all hit by
sentiment, if its true duffield drives round in a mondeo
that implies a modest buffy like lifestyle, hope yet for the pain is good club

[asher5] 18/1/2008 10:22

Gooner6 Could be a dead cat bounce!!