New Star has faded and John Duffield is leaving.

British investment manager New Star has fallen under the control of some major banks and its founder John Duffield is leaving. It operated a culture of star investment fund managers, some of whome found it difficult to outperform. Investment conditions have been tough for active stock pickers.
A columnist in MoneyMarketing jokes that he always wrote articles about New Star under the fear of receiving writs from the company's lawyers.
Another columnist says New Star's troubles have affected the fund management industry as a whole.
Meanwhile, the Bath-based firm Fidelius offers advice from simple mortgages to investment planning. It approaches the requirements of the client with a completely open mind.
Meanwhile, Nic Cicutti of Money Marketing, has written a perceptive article about the New Star implosion. For instance, he notes that New Star markets over 40 funds
compared with around twelve in 2002. Fashion funds reflected latest fads for investors. There was also no rigorous, disciplined approach when the stock market started to collapse. Also, good managers will have periods, when they are unable to outperform due to being in the wrong sector or having the wrong investment style.

Major banks could take control of New Star.

The major banks could take control of UK investment manager New Star. You would have thought that fund management was a straightforward and simple business with not much to go wrong. It seems that New Star was weighed down with debt, which was very negative when funds under management suddenly went south. When these funds go up, it can be a very profitable business if costs stay the same. It is sad that it has not worked out for New Star founder John Duffield, who is a real character amongst the grey denizens of the City.
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One worrying factor is that quoted businesses are going into administration nearly every week. It seems like it anyway (Woolies, MFI, London Scottish).
It will be interesting if the Bank of England lowers interest rates to 2 pct from 3pct. If the banks are not passing on the decrease to borrowers but are applying it to savers, then the Bank might consider a pause. It does not seem to be too worried about the exchange rate but sterling does need some support to prevent a major fall.

New Star shining bright?

It does not seem that long ago when the legendary British fund management entrepreneur John Duffield founded New Star with the aim of having the brightest and the best as his fund managers. Duffield had previously stuck it to some Germans and the new company was going places. Now according to a Money Marketing article it is thought that New Star will lose 50 to 60 of its 380 strong workforce.
However, Mr Duffield is positive for the future and sees long-term prospects are still intact with the benefits of increased savings and investment flows. He says property is the best option in terms of UK investment while the influence of India and China will continue to grow.
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Darius McDermott, of Chelsea Financial Services, told Money Marketing that he is confident that the infrastructure to support fund performance will be
there.
New Star International Property has just suspended dealings in the fund due to some institutional withdrawals. On his company web site, Mr McDermott notes that the fund has outperformed the MSCI index with a 9.2 pct decline since its launch.