New Star Investment Share Discussion Threads

[topvest] 25/3/2015 21:03

This vehicle seems to exist to protect wealth rather than to grow it as far as I can see.

[edwardt] 25/3/2015 13:57

the use of the word independent may be a bit generous.

[edwardt] 04/3/2015 11:50

still asleep -let's hope the independent directors are thinking hard about the enormous discount.

[topvest] 28/9/2014 08:45

Yes, that's a possibility. Trouble is he is unlikely to move away from Brompton. If they reversed Brompton in it would lead to loss of investment trust status, but not sure that would necessarily lead to any tax liability given the lack of gains actually made by the trust. Depends on his appetite to recreate New Star or Jupiter I suppose. I wouldn't be surprised if he still has ambitions to do that.

[coolen] 28/9/2014 00:43

As a fully-listed investment trust, I agree that present "related party" red tape would almost kill any reversal plans (and perhaps endanger investment trust tax status ?).

So, any reversal would need to offer a major attraction:

Might the whole shooting match get quoted in order to facilitate a third-party share exchange offer, with rollover cgt benefit being the main objective ?

[topvest] 27/9/2014 08:34

Yes, the three angles are probably:
-£0.5m of fees to Brompton;
-Inheritance tax reasons; and
-Retaining control of a listed company for a possible comeback.

Looking at Brompton Asset Management it is growing well with an Equity and Property fund management business. Made a £2.7m profit on £7.5m of revenue in 13/14 and it's growing strongly with over £1.1bn in FUM up from £0.7m in the prior year.

I suppose that this could also just be a placeholder investment until something better comes along. They could always reverse Brompton Asset Management into this at some point, although that's probably messy from a related party transactions perspective.

[coolen] 26/9/2014 23:57

The Brompton funds just seem to invest in other collectives, is that right ?

It is almost as if the "investment" managers are admitting to no bottom-up stockmarket expertise.

From Duffield's aspect, it presumably would cut his IHT bill if his wealth is standing at 70p in the £. HMRC can hardly argue against a share quote.

I'm struggling to find another angle which is more generous to the guy, given that he's a bright cookie.

[topvest] 26/9/2014 08:31

Not really and Duffield has 59%

[coolen] 25/9/2014 22:07

Other than Duffield, anyone of note with share stakes ?

[topvest] 25/9/2014 21:29

It's only in the best interest of John Duffield who owns a majority stake here and in the manager. But maybe he doesn't care about making more money and just cares about his empire. This company could do with some proper non-Executive Directors here. They could INSTANTLY change the share price by any of these courses of action:

1. Liquidate the company and pass funds back to holders.
2. Merge with another investment trust.
3. Appoint a new manager and change the investment strategy.
4. Change the investment strategy but keep Brompton.

I've always hoped that 3 would happen but there appears no appetite for change.

Surely, this is the worst performing investment trust on the London market. Can anyone name anything worse?

[coolen] 25/9/2014 21:21

I am not a shareholder so have not seen the latest accounts.

However, it is now a requirement of an investment trust to include a statement in the annual report why the continuing appointment of the investment manager is in the best interests of shareholders.

[topvest] 25/9/2014 20:32

Yes, total failure. John Duffield's strategy is bizarre. He seems happy to just keep money and not make anything at all. Very odd for such a successful man. Surely, he could actually find an investment manager who actually knows how to invest. This bunch are next to useless!

[jhan66] 25/9/2014 15:00

Your Company's objective is long term growth.
May 2000 share price £1.00
So roughly 1% annual in assets & -2% (neg) annual in share price.

After fourteen years I'd say that's a failure. I'd like this company wound up, capital returned please.

[topvest] 25/9/2014 14:45

Another set of "standing still" results. This company trades at a significant discount and use Brompton to churn out continually poor results. Same wording on the discount as last year. Yes, there is something you can do...change the investment strategy and manager. Look at what Majedie Investments achieved! Very poor stewardship on this investment trust.

[coolen] 24/2/2014 20:23

Anyone brave enough to ask for sight of their Conflicts of Interest Register ?

[scburbs] 24/2/2014 15:23

Feels like a good alternative for cash which is surplus to requirements given the significant downside risk protection. I have bought some on this basis, but am only targeting returns of 5-10% p.a.

A safe(ish) place to park some surplus cash and forget about it for a few years in the knowledge that it would have only been earning c.2% in the bank.

Disappointing to hear that the company still has no intention to do anything about the discount despite having lots of cash.

[edwardt] 24/2/2014 14:27

minority being the operative word qwazi. i for one will hang around, the discount is simply too wide to ignore, one day i will smile having stuck this one out....

[topvest] 24/2/2014 12:50

This has to be one of the worst investment trusts currently listed. Woeful performance. Surely John Duffield could have a better manager for this trust. A five year old or a random selection machine would have performed twice as well.

[qwazi] 24/2/2014 11:54

...and how does the company manage the conflict of interest? The major shareholder gets a benefit from NSI investing in all these Brompton funds, but none of the minority shareholders do.

[edwardt] 24/2/2014 11:30

a pretty poor set of results and another push back from the board on the discount. i also see more brompton funds in the portfolio -anyone checked if there is double fees being booked here - probably is!

[qwazi] 15/10/2013 12:39

Anyone going to the AGM?

[coolen] 29/9/2013 20:26

Although he controls New Star, I wonder how he would phrase a defence (ie. an explanation to minority holders of his rejection) in the event of conditional approach ?

[topvest] 29/9/2013 16:52

Well we don't need a dividend, we just need a manager with some investment ability! If the Board really cared they would tender the investment management contract. They probably won't do this as all the fees go to the owners company. Maybe John Duffield needs to attract a good manager. He must have known a fair few given his past career!

[coolen] 29/9/2013 14:23

"..your directors have explored various possibilities with a view to
reducing this discount."

Presumably they considered a "dividend" (in case they are reading this, a dividend is when you make a small annual distribution to your members !)