Thu, 05/07/2007 - 07:00
New Star Asset Management is rationalising its single strategy hedge fund range by closing three small funds investing in the UK, Japan and Asia that had combined assets under management of USD78m at the end of June.
The New Star UK Hedge Fund, New Star Japan Hedge Fund and New Star Asia Renaissance Hedge Fund have produced US dollar returns of 5.0 per cent, 2.4 per cent and 5.7 per cent respectively over the first five months of this year, but the asset manager says they remain below an optimum size to continue operations.
The closure of the funds is one of a series of developments in New Star's alternative asset business, including the planned launch of a property hedge fund later this year. In the past 12 months New Star has raised more than USD550 million for two hedge funds launched in the second half of 2006, recruited Thierry Serero to run a European hedge fund and launched a fully invested private equity fund of funds.
New Star has recruited Robin White from Rock Capital to manage a hedge fund that will invest predominantly in property securities and is scheduled to be launched in the last quarter of this year.
White, who will join New Star in September, has been investing in property securities on a long/short basis for eight years and has managed the Rock Real Estate Securities Fund since its launch in July 2006. The fund has produced an annualised return of 22 per cent up to the end of May, with no negative months.
'We are pleased that we have been able to continue to grow our product range and attract talented hedge fund managers such as Robin White and Thierry Serero,' says head of alternative investments Charles Tritton. 'New Star's alternative asset business is becoming a well diversified offering as we seek to continue to provide investors with strong risk-adjusted absolute returns.'
New Star's flagship hedge fund strategy, New Star Multi-Strategy Hedge Fund, was launched last August and has provided an annualised return of 14 per cent up to June 22, with only one down month of minus 0.15 per cent. At the beginning of July the fund had more than USD250m in assets under management.
In December New Star launched Hedge ETS, which is traded on the London Stock Exchange and offers exposure to the RBC Hedge 250 Index. Up to the beginning of July, the fund's 1x (unleveraged) shares had returned 8 per cent and its 3x leveraged shares had achieved 20 per cent performance since launch. Total assets under management in Hedge ETS are currently USD325m.
In May New Star launched the New Star European Opportunities Hedge Fund managed by Serero, who previously managed long-only money at Fidelity and more recently a long/short strategy at C60 Capital, his own boutique fund. At New Star, he runs a concentrated pan-European equity long/short strategy with between 25 and 40 positions and a variable net market exposure. At the end of June the strategy had some USD100m under management.
On July 2 New Star completed the launch of New Star Private Equity Investment Trust, a fund of private equity funds whose assets of around USD137m are already fully invested in private equity investments.
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