Not for release, publication or distribution in whole or in part in or into the United States, Australia, Canada or Japan. Increase over the year
New Star Asset Management Group PLC ("New Star") today issues the following trading update in advance of publication on 30 March 2007 of its preliminary results for the year ended 31 December 2006.
Trading conditions in the second half of 2006 were buoyant. The Group's assets under management increased to £21.1 billion at 31 December 2006, up 17% from £18.0 billion at 30 June 2006 and up 25% from £16.8 billion at the end of 2005.
Assets under management
At 31 December 2005
£ billion At 30 June 2006
£ billion At 31 December 2006
£ billion
UK mutual funds
7.1
8.0
9.7
37%
International mutual funds
0.3
0.5
1.1
252%
Institutional
7.7
7.6
8.1
5%
Alternative assets
0.8
0.9
1.2
47%
Other
0.8
1.0
1.0
24%
Total
16.8
18.0
21.1
25%
Net inflows of assets in the second half year were £1.9 billion compared to £0.9 billion in the first half. These included net inflows into UK mutual funds of £1.1 billion, up 52% compared to £0.7 billion in the first half, and net inflows into international mutual funds of £520 million, compared to £180 million in the first half.
Approximately 43% of New Star's mutual fund assets under management are invested in property or fixed income. 51% of mutual fund net inflows in the second half were into these categories. Net inflows into equity mutual funds increased from £362 million in the first half to £782 million in the second half.
Investment performance continues to be satisfactory. 53% of equity and bond mutual fund assets under management were in funds in the top quartile of their respective peer groups over the year to 31 December 2006 and 83% in the top two quartiles. 62% of single-manager hedge fund assets were in hedge funds in the top two quartiles for the year relative to their peer groups. New Star's US institutional performance was broadly in line with the MSCI EAFE growth index, although it lagged the benchmark MSCI EAFE index.
During the half year New Star purchased on market for cancellation 2,108,957 ordinary shares of 5p each at an average price of 367.2p per share. New Star may make similar such purchases in the future if appropriate opportunities arise.
Return of capital
In view of its strong cashflow and in order to improve the efficiency of its balance sheet, New Star is currently considering with its advisers the possibility of returning capital to shareholders during 2007. If a return of capital were to be made it is expected that it would be in an amount of not less than £300 million, equivalent to at least £1 per existing New Star share.
Any such return of capital is subject, inter alia, to New Star obtaining the necessary tax and regulatory approvals. At this stage, no assurance can be given that a return of capital on the proposed basis will proceed.
A further announcement regarding any return of capital is expected to be made on 30 March 2007 when the Company announces its preliminary results.
Current trading
New Star begins the year with strong sales momentum and significantly higher assets under management than a year ago. Subject, as always, to securities markets and unforeseen circumstances, another year of robust growth is expected for 2007.
Enquiries:
Citigate Dewe Rogerson
Anthony Carlisle (office) 020 7638 9571 (mobile) 07973 611 888
This announcement is not for publication or distribution to persons in the United States of America, its territories or possessions or to any US person (within the meaning of Regulation S of the US Securities Act of 1933, as amended). Neither this announcement nor any copy of it may be taken or transmitted into Australia, Canada or Japan or to Canadian persons or to any securities analyst or other person in any of those jurisdictions. Any failure to comply with this restriction may constitute a violation of United States, Australian, Canadian or Japanese securities law. The distribution of this announcement in other jurisdictions may be restricted by law and persons into whose possession this announcement comes should inform themselves about and observe any such restrictions.
Forward-looking statements
This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and businesses of New Star Asset Management Group PLC. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. Nothing in this announcement should be construed as a profit forecast.