New Star on the wane as Africa fund on hold

Published on Thursday 11 December 2008 20:41

BELEAGURED investment manager New Star Asset Management has suspended trading in its Heart of Africa fund due to liquidity problems.

It is the latest in a series of blows for the firm, which last week ceded control to its creditors, a move expected to lead to the departure of founder John Duffield. Now New Star's 29 million Heart of Africa fund has suffered a sharp increase in investor redemptions, forcing the firm's depositary, Royal Bank of Scotland, to temporarily suspend trading in the fund.

Jamie Allsopp, manager of the fund, claimed the rise in redemptions was due to the global market slowdown and not because of a decline in the outlook for the sub-Saharan region in which the fund invests. Since its launch just over a year ago, the fund has fallen 24.4 per cent, according to Lipper, compared with a 38.8 per cent fall in the MSCI Emerging Markets Total Return Index in the same period.

The news comes just weeks after the firm had to suspend dealing in its International Property fund.

John Duffield, Saturday Profile