Duffield bounces back from New Star with third investment venture
Thursday 16 April 2009
John Duffield, the veteran investor, has staged a comeback by launching a third investment group, Hyde Park Asset Management, following the recent near-collapse of his previous venture.
Mr Duffield, who set up New Star Asset Management in 2001, has hired the 10th floor at his former swanky office in Knightsbridge, London, and has hired the former New Star marketing director John Jay as chief executive. Mr Jay is a former business editor of The Sunday Times. The office is also home to Henderson, the financial group which agreed to buy New Star and its remaining 74 funds for £115m in February.
New Star's shares were suspended in December, and in March Mr Duffield, 69, agreed to step down as chairman as part of a deal that saw five banks take a 75 per cent stake in the business in exchange for £240m of its debt.
Initially, it is understood that Hyde Park Asset Management will manage the personal wealth of Mr Duffield – who made his fortune by founding Jupiter Asset Management in 1985 and selling it to Commerzbank 11 years later – and that of his family members. Mr Duffield sold 75 per cent of Jupiter to Commerzbank for about £170m in 1995, and the remaining 25 per cent for £500m in 1999. He made about £175m himself from the sale of Jupiter to the German bank, but the deal also made millionaires out of employees, including his then secretary.
The famously driven Mr Duffield, who has previously said he did not plan to retire before he was 90, is one of the best known figures in the City. He rapidly grew New Star into a retail investment powerhouse, which at its peak had funds worth £20bn and accounted for one in 10 retail customers.
New Star delisted from the London Stock Exchange in December 2008. Its shares had lost more than 95 per cent of their value since December 2007.
The catalyst for the firm's demise was a fall in asset values that undermined its ability to service a gross debt pile of £260m. New Star built up the majority of its debt as part of an ill-timed return of £383m of capital to shareholders in the first half of 2007, months before the start of the credit crunch.
Mr Duffield's reputation is of a tough taskmaster who does not suffer underperforming employees. His legendary attention to detail includes stories of his previous staff taking buses after work to check the position and condition of his companies' billboards and then demand discounts the next day if they were not up to scratch.
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