In early August New Star signed an agreement with Exeter Investment Group to buy the rights to manage all 13 of Exeter's retail funds. This cash transaction, funded by a £10m capital raising, added approximately £310m to New Star's funds under management, taking them to about £4.5 billion, and involved about 50,000 retail clients. Of the total assets, about 80% were invested in investment trust shares. The transaction was completed in early September. One fund manager, Paul Craig, was recruited from Exeter and a second manager, Richard Scott, was appointed as a consultant.
Also in September, New Star signed an agreement with Aberdeen Asset Management, which had negotiated the acquisition of Edinburgh Fund Managers, to buy the rights to manage Edinburgh's retail funds. The £33m transaction, which was accompanied by a £16m share issue, added approximately £840m to New Star's funds under management, taking them to about £5.4 billion, and involved more than 70,000 retail clients. Of the total funds transferred, approximately £400m was in fund of funds products. The transaction was completed at the end of October. Mark Harris, head of the Edinburgh fund of funds team, and three of his colleagues, joined New Star following the completion of the transaction to build the fund of funds business as an independent unit within New Star.
In early December, New Star launched its Galaxy Portfolio Service, a discretionary-style, global portfolio management service with a low minimum entry level of £25,000 and an investment protection facility. The service offers investors access to four of the top-performing funds acquired as part of the Edinburgh Fund Managers acquisition.
Later in December, Family Assurance announced that it had appointed New Star to manage its £1.5 billion of funds under management with effect from 30 January 2004. In addition, £4m was raised in a share placing.
Notes
[1] Performance is measured from the funds' respective launch dates to June 30 2003.
Source: Standard & Poor's, offer to offer, in sterling, net income reinvested as at June 30 2003.
Past performance is not necessarily a guide to future performance.