Bidders set for £100m battle over New Star

New Star Asset Management, the fund manager that controlled a tenth of the retail investment market as recently as two years ago, will be sold for a knock-down price by the end of the month.

The investment company, which last year came close to collapsing as it struggled with borrowings of £240m, is understood to have received modest indicative bids from a clutch of rivals with retail fund management operations.

The bidders are thought to include Schroders, Henderson, Gartmore and Neptune Investment Management, although private equity groups also continue to monitor the situation.

One party involved with the sale process said the leading bidders were offering a little over £100m and that a preferred bidder would be named by the end of the month.

New Star, founded by the industry stalwart John Duffield just seven years ago, ran into trouble during the autumn, as investors began to withdraw money in the wake of a run of poor performances from many funds.

Floated in November 2005, New Star raised a total of £240m of debt in 2007, primarily in order to fund a special dividend for shareholders.

The fund manager is now controlled by a consortium of banks, which in December agreed to waive the loans that have been made to New Star in return for equity in the fund manager. New Star's share price fell 98 per cent last year.

New Star's new owner will get a sizeable fund management business, despite its recent problems. At one stage, New Star had assets under management of close to £20bn, though this fell back to £12bn by the end of last year. Subsequent market movements have increased the total to close to £14bn.

In addition, New Star has repeatedly won favour with retail customers, thanks to a series of high-profile advertising campaigns and several high-profile appointments of well-known managers. Some 300,000 individuals are thought to have holdings in its funds.

However, the sale of the company is likely to bring the investment career of Mr Duffield to an end. New Star's founder is currently its executive chairman, but he has already signalled he will leave the company once the sale is complete.

Mr Duffield launched New Star in 2001, shortly after selling Jupiter Asset Management, the business that he founded in 1985, to Germany's Commerzbank.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Guru Careers: Pricing Analyst

£30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Sales Team Leader - Wakefield, West Yorkshire

£21000 - £24000 per annum: Ashdown Group: The Ashdown Group has been engaged b...

Day In a Page

Revealed: Why Mohammed Emwazi chose the 'safe option' of fighting for Isis, rather than following his friends to al-Shabaab in Somalia

Why Mohammed Emwazi chose Isis

His friends were betrayed and killed by al-Shabaab
'The solution can never be to impassively watch on while desperate people drown'
An open letter to David Cameron: Building fortress Europe has had deadly results

Open letter to David Cameron

Building the walls of fortress Europe has had deadly results
Tory candidates' tweets not as 'spontaneous' as they seem - you don't say!

You don't say!

Tory candidates' election tweets not as 'spontaneous' as they appear
Mubi: Netflix for people who want to stop just watching trash

So what is Mubi?

Netflix for people who want to stop just watching trash all the time
The impossible job: how to follow Kevin Spacey?

The hardest job in theatre?

How to follow Kevin Spacey
Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

Armenian genocide and the 'good Turks'

To continue to deny the truth of this mass human cruelty is close to a criminal lie
Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

'Lou needed care, but what he got was ECT'

The truth about the singer's upbringing beyond
Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

This human tragedy has been brewing for years

EU states can't say they were not warned
Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

Women's sportswear

From tackling a marathon to a jog in the park, the right kit can help
Hillary Clinton's outfits will be as important as her policies in her presidential bid

Clinton's clothes

Like it or not, her outfits will be as important as her policies
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders