New Star is delighted to announce the launch of the New Star Heart of Africa Fund. The launch of this sub-Saharan Africa excluding South Africa fund reflects New Star's belief in the growing investment potential in the region. The New Star Heart of Africa Fund will be managed by AA Citywire rated Jamie Allsopp*. Jamie has valuable experience of investing in Africa through his management of the New Star Hidden Value Fund.
We believe this fund is high risk and therefore only suitable for investors who are able to bear the loss of all or part of their capital investment. The New Star Heart of Africa Fund will offer sophisticated investors the rare opportunity to harness the investment potential of sub-Saharan Africa excluding South Africa. Traditionally, sub-Saharan Africa has been viewed by most portfolio investors as a region to avoid. Recent changes, however, have presented investors who are prepared to accept a higher degree of risk with some attractive investment opportunities. Whilst significant risks still remain in the region, positive changes to the investment landscape include:
The New Star Heart of Africa Fund will have a minimum investment limit of £12,500 and an initial fixed price offer period running from Monday 22 October 2007 to Friday 9 November 2007.
Only a handful of funds offer access to Africa. We are, therefore, expecting considerable demand for the New Star Heart of Africa Fund. Whilst we expect a high level of interest in this product we are mindful of the liquidity constraints of investing in the region. Accordingly, New Star will limit its heart of Africa fund exposure once it reaches £100 million and will restrict new investment for a minimum of two years thereafter.
To enhance the alignment of the fund's interests with those of its investors, New Star will levy a performance fee of 20% of any outperformance achieved over its target – three-month sterling LIBOR plus 3%.
Mark Skinner, managing director of New Star Investment Funds, says:
"Whilst it has clear and large risks, sub-Saharan Africa represents a terrific investment opportunity. To launch one of the first UK retail funds to access this region at such an early stage in its economic development is in keeping with New Star's philosophy of seeking attractive investment opportunities ahead of the wider market."
Jamie Allsopp, manager of the New Star Heart of Africa Fund, says:
"The investment landscape has changed significantly in Africa. Strong economic growth, high levels of foreign direct investment, increasing political stability and the resultant improvement in corporate governance have created a compelling investment backdrop and it is no surprise that some of the best performing markets in the world are situated in sub-Saharan Africa. My investment process has been built around discovering hidden value and Africa represents a whole continent of undiscovered opportunity."
Fund details
| Fund name: | New Star Heart of Africa Fund. |
| Fund manager: | Jamie Allsopp, who is also manager of the top-performing New Star Hidden Value Fund (AA Citywire rated at 31 August 2007). |
| Launch date: | 22 October 2007. |
| Launch offer period: | 50p fixed price offer period from Monday 22 October 2007 to Friday 9 November 2007. |
| Sector: | IMA Specialist sector |
| Minimum investment: | £12,500. |
| Minimum top-up: | £5,000. |
| Initial charge: | 5.25%. |
| AMC: | 1.75% |
| Performance fee: | 20% of fund outperformance over three-month sterling LIBOR plus 3%. |
| ISA: | Not available via New Star. |
| ISA/PEP transfer: | Not available via New Star. |
| Regular savings facility: | Not available via New Star. |
* AA Citywire rated at 31.08.07. Past performance is not necessarily a guide to future performance.
-ends-
For further information please contact:
| Ben Robinson | New Star | 020 7225 9294 | ||
| Richard Wilson | New Star | 020 7225 9575 | ||
| Jamie Legg | New Star | 020 7225 9567 | ||
| Polhill Communications | 020 7655 0540 |
New Star Investment Funds website is www.newstaram.com.
Important information
This fund is high risk and therefore only suitable for investors who are able to bear the loss of all or part of their capital investment. Investors should contact their financial adviser to discuss the suitability of an investment in this fund. Investors' attention is drawn to the detailed risk warnings in the fund's prospectus.
The value of investments and any income from them can fall as well as rise, as a result of market and exchange-rate movements, and investors may not get back the amount invested.
Many sub-Saharan African markets are small, have low trading volumes, low liquidity and significant price volatility, particularly when compared against more developed markets. As a result, the price of units in the fund will be more volatile than other funds.
Some of these markets may have relatively unstable governments, economies based on only a few industries and securities markets that trade only a limited number of securities. Many emerging markets do not have well developed regulatory systems and disclosure standards may be less stringent than those of developed markets. The risks of expropriation, nationalisation and social, political and economic instability are greater in emerging markets than in more developed markets.
The fund typically holds a more concentrated portfolio than the average OEIC sub-fund and invests across a limited geographic region. The fund may invest in smaller companies which can be less liquid than the securities of larger companies, as a result of inadequate trading volume or restrictions on trading. Returns may be more volatile and will be impacted more by fluctuations in the value of underlying stock.
Due to the specialist nature of the fund, in certain circumstances, for example where there are significant redemptions, there may be constraints on the redemption or switching of shares. As a result, at times, the ACD may have to delay acting on instructions to sell investments.
The bid-offer spread – the difference between the buying and selling prices of the underlying assets in a fund – is wider for the New Star Heart of Africa Fund than for other less specialist funds and may vary. Changes to the fund's pricing basis will lead to an increase or decrease in what investors will pay or receive when buying or selling shares. The overall impact of these changes should be less for long-term investors and may be either positive or negative.
New Star Investment Funds is the trading name of New Star Investment Funds Limited, part of the New Star Marketing Group. New Star Investment Funds is not authorised to give investment advice and only provides information on New Star products. For your protection, calls may be recorded and monitored. Issued by New Star Investment Funds Limited, authorised and regulated by the Financial Services Authority.
