New Star Launches European Value Fund - £172m of Tilney funds transfer to New Star

• The Tilney European Growth Fund has successfully transferred to New Star and been renamed the New Star European Value Fund
  
• Top-performing fund manager Nicholas Sheridan joins New Star from Tilney Investment Management to continue management of the fund
  
•  Nicholas Sheridan's appointment further strengthens what is widely regarded  as one of the top performing European investment teams in the UK
  
• The transfer of the £34m Tilney European Growth Fund forms part of a £172m transfer of funds from Tilney to New Star

New Star is pleased to announce the successful transfer of the Tilney European Growth Fund to New Star. The fund has been renamed the New Star European Value Fund and will keep its top-quartile performance track record*. The fund's highly-regarded manager, Nicholas Sheridan, has relocated from Liverpool to London since he announced he would be joining New Star in April 2007.

Nicholas has an excellent record of managing large-cap stocks in Europe excluding the UK. The New Star European Value Fund will maintain its strong bias towards large-cap stocks and will complement Richard Pease's top-decile† European Growth Fund and Daniel White's top-quartile Pan-European Equity Fund‡. Nicholas's appointment and the launch of the New Star European Value Fund strengthens New Star's position as one of the top performing European investment houses.

Under Nicholas's tenure, the New Star European Value Fund has produced top-quartile performance since launch, returning 93.3% compared to 76.9% for the IMA Europe excluding UK sector index*.

Nicholas's investment process is based on a proprietary quantitative system that enables him to bring a greater focus to his stock selection. Since Nicholas introduced his screening process in August 2004, the New Star European Value Fund has produced top-decile performance, returning 108% compared to 87.6% for the IMA Europe excluding UK sector index#. This places the fund seventh out of 93 funds in its sector#. Nicholas currently has an 'AA' rating from Citywire.

• £35m TILNEY UK EQUITY FUND AND £103m TILNEY UK FIXED INTEREST FUND ALSO TRANSFER TO NEW STAR

In addition to the Tilney European Growth Fund, the Tilney UK Equity Fund and Tilney UK Fixed Interest Funds have also transferred to New Star. The Tilney UK Equity Fund has now merged into the New Star UK Growth Fund, which is managed by New Star's highly-respected joint chief investment officer, Stephen Whittaker. The Tilney UK Fixed Interest Fund has now merged into the New Star Sterling Bond Unit Trust, which is managed by Phil Roantree, one of the UK's leading investment grade corporate bond fund managers.

Mark Skinner, managing director, New Star Investment Funds, says:

"We are delighted that Nicholas Sheridan and the Tilney European Growth Fund have now transferred to New Star. Nicholas's track record is outstanding and we are confident he will maintain his excellent performance for investors in the New Star European Value Fund."

*Sourced: Lipper, mid to mid, net income reinvested - 01.02.02 to 27.06.07
†Sourced: Lipper, mid to mid, net income reinvested, since launch on 23.07.01 to 27.06.07
‡Sourced: Morningstar, offshore, nav to nav, net income reinvested, since launch on 09.12.07 to 22.06.07 (performance data updated weekly)
#Sourced: Lipper, mid to mid, net income reinvested - 30.07.04 to 27.06.07

-ends-

For further information please contact:

Rob Page  New Star    020 7225 9247
Ben Robinson  New Star   020 7225 9294
Richard Wilson New Star   020 7225 9575
Karen Wagg  Polhill Communications 020 7655 0540
      
New Star Investment Funds website is www.newstaram.com.

Important information

• New Star, one of the UK's fastest growing fund management companies, was founded in June 2000 by John Duffield, previously the founder of Jupiter Asset Management, which he built into one of the most successful retail investment businesses in the UK.
  
• New Star currently has a range of 38 UK retail funds including UK and international equity growth, UK equity income, bond, UK and international property, global and regional funds of funds, investment trusts and global financial products. New Star also has established international, institutional, hedge fund, private equity and private client businesses.
  
• New Star has won the Citywire Team All Stars Award for each of the last three years - 2004, 2005 and 2006. New Star was voted winner for consistent performance on a risk-adjusted basis across 15 key IMA sectors.
  
• New Star employs more than 350 people and has offices in London, Dublin, Bermuda, Madrid, Zurich and Hong Kong.
  
• At 22 May 2007 the group's total funds under management stood at £24.8 billion.

Past performance is not necessarily a guide to future performance.

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