The headlines New Star has accumulated over recent weeks are staggering. Whether it be the announcement of redundancies, the suspension in trading of funds, the falls in its share price or the restructuring of its fund range, the group cannot remove itself from the spotlight.
If New Star was not listed it would probably only get half as much attention. But even if it was a private company the media would still focus on it. The reason? John Duffield. Out of the fire of Jupiter came New Star and with it, a wave of acquisitions, including the purchase of assets from Aberdeen. When New Star acquired six funds from Aberdeen in 2003 the Scottish asset management firm was the one in trouble courtesy of its participation in the split caps crisis. Now Martin Gilbert has transformed Aberdeen’s fortunes so much that some have speculated it may put itself forward as a potential buyer of New Star.
The guessing game about New Star’s future will continue but one thing is for certain: it is not in the best interests of the fund industry for it to go under. Investors are panicky enough. The demise of one of the industry’s largest players would not transmit a positive signal.