New Star Commentary @ 11:57 AM    
New Star has been in the press even more than usual of late and as such we look to provide some clarity and reassurance on the situation.

Whilst New Star as a commercial entity is having a tough time, those clients who hold New Star funds can be assured that their investments are completely segregated from the assets of New Star.

New Star was one of the first fund management groups to warn last year of the very tough conditions that asset managers were likely to face as the market and the economy started to work through the implications of the credit crisis.

During the last few months they have faced significant corporate issues as a result of this background and the debt within its corporate structure. In order to address this New Star announced on the 3rd December that it plans to restructure its debt with the banks. The banks will look to convert the debt into equity within New Star and in effect the bank syndicate will own 75% of New Star’s enlarged fully diluted ordinary share capital.

During this period when it appears New Star is waning it is important to have the following in mind. During their discussion with their bankers New Star agreed to launch a new incentive program in order to attract and retain key employees, namely the fund managers.

Please also rest assured that in partnership with Old Broad Street Research (OBSR), a fund research specialist, we will continue to monitor New Star’s funds. As ever if you have any questions please do not hesitate to contact your Baigrie Davies adviser.

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