Interim Management Statement
November 14 2008 - 2:00AM
UK Regulatory
EMBARGOED UNTIL 7.00AM 14 NOVEMBER
Not for release, publication or distribution in whole or in part in or into the
United States, Australia, Canada or Japan.
14 November 2008
New Star Asset Management Group PLC
Interim Management Statement
New Star Asset Management Group PLC ("New Star") today issues the following
interim management statement in respect of the quarter ended 30 September 2008.
New Star's assets under management at 30 September 2008 were �16.7 billion,
down from �19.8 billion at 30 June. The movement in assets under management in
the quarter was as follows:
At 30 June Net flows Performance/ At 30 September
2008 � � billion market 2008 � billion
billion movements �
billion
UK mutual funds 9.3 (0.4) (1.0) 7.9
International mutual 0.5 - (0.1) 0.4
funds
Institutional 7.5 (0.6) (0.8) 6.1
Alternative assets 1.5 0.1 (0.2) 1.4
Other 1.0 (0.1) - 0.9
Total 19.8 (1.0) (2.1) 16.7
New Star continues to be affected by difficult market conditions and, as a
result, the Group's assets under management have fallen to approximately �14.3
billion at yesterday's date. The fall in assets under management is mainly a
result of the fall in asset prices (�1.8 billion). Net outflows of assets since
30 September 2008 are approximately �523 million. These include net outflows
from mutual funds of �316 million, �155 million from external hedge fund
investors, and net outflows from institutional funds of �89 million. The rate
of redemptions from UK mutual funds has increased in recent weeks as retail
investors have reduced risk in reaction to the high volatility of the capital
markets.
New Star has agreed with its bank syndicate that the financial covenants in
respect of its debt should be amended to better accommodate the current
unsettled trading environment. This amendment has immediate effect. As a
consequence of the amendment the interest rate on New Star's debt has increased
by 1.5%. The debt remains repayable in a single payment in June 2013. New Star
has not at any time been in breach of its financial covenants.
As a consequence of the downturn in capital markets New Star intends to
restructure its business and reduce costs. Total annual savings of
approximately �20 million have been identified compared with the expected level
of costs in 2008. Once surplus premises have been sub-let, over half of these
annual savings will have been implemented already.
Commenting today, John Duffield, chairman of New Star, said:
"The fall in markets since the summer and increased redemptions across the
asset management sector have had a significant impact on our business. Our
banks understand our position and are supportive. We are taking further action
to cut our costs significantly.
We were one of the first companies to warn investors about the impact of the
credit crunch on our sector and we currently believe the exceptional risk
aversion among investors may persist for some time, posing further challenges
for fund management companies over the short term.
The longer-term prospects for asset managers remain intact, however, as a
result of the secular trends towards increased savings and investment flows in
both the developed and the emerging markets. Such flows are likely to be
redeployed in the financial markets, possibly after a time lag, in response to
the coordinated interest rate cuts by the world's central banks and government
moves to rebuild the solvency and liquidity of financial institutions."
Note: All the figures for total assets under management given above include
assets managed on behalf of Family Assurance Friendly Society.
Enquiries:
Citigate Dewe Rogerson
Anthony Carlisle (office) 020 7638 9571
(mobile) 07973 611 888
This announcement is not for publication or distribution to persons in the
United States of America, its territories or possessions or to any US person
(within the meaning of Regulation S of the US Securities Act of 1933, as
amended). Neither this announcement nor any copy of it may be taken or
transmitted into Australia, Canada or Japan or to Canadian persons or to any
securities analyst or other person in any of those jurisdictions. Any failure
to comply with this restriction may constitute a violation of United States,
Australian, Canadian or Japanese securities law. The distribution of this
announcement in other jurisdictions may be restricted by law and persons into
whose possession this announcement comes should inform themselves about and
observe any such restrictions.
Forward-looking statements
This announcement contains certain forward-looking statements with respect to
the financial condition, results of operations and businesses of New Star Asset
Management Group PLC. These statements and forecasts involve risk and
uncertainty because they relate to events and depend upon circumstances that
will occur in the future. There are a number of factors that could cause actual
results or developments to differ materially from those expressed or implied by
these forward-looking statements and forecasts. Nothing in this announcement
should be construed as a profit forecast.
END
New Star Asset Management (LSE:NSAM)
Historical Stock Chart
From Jun 2024 to Jul 2024
New Star Asset Management (LSE:NSAM)
Historical Stock Chart
From Jul 2023 to Jul 2024
