The second half of 2005 was a period of intense activity for New Star, culminating in its admission to the London Stock Exchange's Alternative Investment Market following a share placing.
Within the retail business, the management team was strengthened with the appointment of Phil Wagstaff as managing director, UK retail sales and marketing. The appointment of Phil, previously M&G's UK retail managing director, coincided with New Star Investment Funds' fourth anniversary. On the anniversary, funds under management stood at £6.4 billion while three quarter of the equity funds launched by New Star Investment Funds were in the top quartile of their sectors from their respective launch dates [1].
July marked another important milestone for New Star - the third anniversary of Stephen Whittaker's appointment as fund manager of the flagship New Star UK Growth Fund. Over the first three years of his stewardship, the fund achieved top quartile performance, having delivered 63.63% and having outperformed the UK All Companies sector index by 10.91 percentage points [2]. A few weeks later Stephen was named joint chief investment officer, a reflection of his talent and expertise and New Star's growing size and complexity.
In September, New Star's fund managers received independent endorsement from Citywire, the financial data group, which named the company overall winner in its 2005 awards for asset management groups with at last eight qualifying managers. The awards were based on individual fund managers' risk-adjusted returns over the three years to June 2005 across 14 Investment Management Association sectors. This was the second year in a row in which New Star had won the award.
New Star's intention to gain admission for its shares on the Alternative Investment Market of the London Stock Exchange was announced in October. The announcement included news that Sir Dominic Cadbury was joining the board as senior independent non-executive director and deputy chairman. The announcement also disclosed that New Star's operating earnings before tax, interest, exceptional items and amortisation of intangible assets had risen 61% to £17.1 million during the first half of 2005. New Star shares began trading the following month following a placing at 225p per share, capitalising the company at £704 million.
Within the retail business, October marked the launch of the New Star Cautious Portfolio Unit Trust, bringing to eight the number of portfolios run by Mark Harris, head of New Star's fund of funds team, and his colleagues. The fund was launched to meet the growing demand among investors for cautious investments providing the potential for capital growth and regular income.
At the year end, New Star Investment Funds revealed that its retail funds under management had topped £7 billion, making it the UK's 18th biggest retail fund manager [3]. Figures to 30 November showed group funds under management at £15.8 billion, up from £10.7 billion at the start of 2005.
Sources
[1] Lipper, mid to mid, net income reinvested at 22 July 2005
[2] Lipper, mid to mid, net income reinvested 26 July 2002 to 29 July 2005
[3] Investment Management Association ranking of fund managers by UK funds under management in unit trusts, OEICs, PEPs and ISAs at 30 November 2005
Past performance is not necessarily a guide to future performance