In July its flagship retail funds, New Star UK Growth and New Star European Growth, were launched into the market to widespread acclaim. Setting what is believed to be a UK record for an open-ended funds launch, the company raised in excess of £250 million during the three-week offer period from more than 25,000 investors.
In September two new funds were launched: the New Star European Hedge Fund, a long/short equity fund that invests primarily in European and UK securities, and the New Star Capital Guaranteed Hedge Fund, a long/short UK equity fund with a rising capital guarantee provided by HSBC Bank. The New Star Capital Guaranteed Hedge Fund was the first product launched by the group's Dublin-based offshore marketing subsidiary, New Star International Investment Products Ltd. The fund closed in December having raised more than $180 million.
The third retail fund, New Star UK Aggressive (name changed to New Star UK Alpha Fund during 2004), was launched on 22 October . Managed by Tim Steer, it invests in a focussed portfolio of primarily mid-cap companies.
In December, New Star raised a further £25m of development capital from new and existing investors at £150 per share, valuing the company at £267 million. The following month its retail arm, New Star Investment Funds, revealed that in its first six months of operation it had attracted more than £400 million of retail sales and more than 40,000 investors.