The year began with an announcement that New Star Asset Management Group was considering the possibility of returning capital to shareholders of at least 100p per share during 2007 in view of the company's strong cash flow and to improve the efficiency of the balance sheet. The capital repayment plan accompanied news that funds under management had increased to £21.1 billion at 31 December 2006, up from £16.8 billion at the end of 2005.
In early March, New Star funds won seven categories in the Lipper Fund Awards UK 2007. New Star fund managers also topped the equity income and specialist sectors in the Citywire Top 100 Fund Manager of the Year awards and seven New Star fund managers were included in Citywire's Top 100 list.
Later that month, the company announced plans to enter the private equity market through the merger of two venture capital funds to create a new fund of private equity funds vehicle called the New Star Private Equity Investment Trust.
The group's annual results were announced at the end of March. These showed operating earnings* up 65% to £72 million on net revenue 41% higher at £133.9 million. A maiden final dividend of 5p per share was declared, making a total for the year of 9p per share. In addition, the board increased the proposed capital repayment to shareholders to 125p per share.
In April, New Star Investment Funds said it had reached agreement with Tilney for three Tilney funds to be transferred into New Star funds. As part of the transfer, New Star recruited Nick Sheridan, manager of the top-performing Tilney European Growth Fund. This fund was then merged into a new Europe excluding the UK equity fund called the New Star European Value Fund.
The most significant event of the half year for New Star's retail funds business was the launch in May of the innovative New Star International Property Fund. This fund is the UK's first UK-authorised international bricks and mortar commercial property fund and its launch followed discussions with the Financial Services Authority, which granted the company a modification to existing rules. The three-week offer period in May and June proved to be the most successful independent retail fund launch ever in the UK, with £206 million raised from investors.
On 13 June, following a shareholders' meeting, the group's shares were transferred from the Alternative Investment Market of the London Stock Exchange to a Full Listing. At the same time, following approval by the High Court, some £364 million was returned to shareholders by way of a capital reduction. For every five old AIM-quoted shares, shareholders received four fully-listed shares plus 625p in cash.
*Before tax, interest, exceptional items and amortisation of intangible assets
Past performance is not necessarily a guide to future performance.