Structured products head leaves New Star
London-based funds house New Star Asset Management's head of structured products has resigned, extending a list of senior departures from the group at a time when its two chief investment officers come under increased pressure after suffering negative performance on their funds.
Ravi Anand, head of structured products at New Star, resigned last week. Donald Pepper, who is head of prime brokerage in Europe, the Middle East and Africa at Merrill Lynch International and is due to join New Star in September as head of alternative investments, will take over Anand's responsibilities. Anand is taking timing off to consider what to do next, according to a spokesman at New Star.
Anand's departure comes a week after Andy Banks, New Star's chief operating officer for real estate, revealed he had left the group to rejoin Legal & General Property, after 18 months in the role.
Separately, New Star is also coming under fire over underperforming funds managed by its two chief investment officers. Its £253m (€319m) Equity Income fund, managed by Stephen Whittaker, was placed on a black list of UK equity income funds compiled by fund manager Principal Investment Management. It has returned -26% over the 12 months to the end of June.
In its latest biannual review of the sector, Whittaker's fund sits alongside 12 others on the black list, which includes the New Star Higher Income fund, managed by Toby Thompson.
Two weeks ago New Star also announced that its £28.2m Tri-Star fund, managed by chief investment officer Gregor Logan, would merge into its Cautious Portfolio, a £47.6m fund of funds. The Tri-Star fund, which invests in equities, property and fixed income, was launched with an advertising blitz in mid-2006, but returned -16.7% for the 12 months to the end of June this year.
Mark Skinner, a managing director at New Star, said at the time that the unprecedented fall in the value of all three asset classes highlighted the need for greater flexibility and diversification.
A New Star spokesman said that the firm is in a period of consolidation, as well as expansion into emerging markets. After struggling last year with significant negative performance, and suffering outflows from flagship funds including its UK property fund and its European equities funds managed by Richard Pease, it has stabilised performance and asset flows and hired new managers, particularly in its UK equities team.
New Star hired Trevor Green from RCM, and Green has since taken over the UK equity income portion of the firm's Managed Distribution fund. Charles Deptford, a UK equities manager, also joined from Barings, and though he has no named responsibilities yet an announcement is expected shortly. New Star declined to comment on his future responsibilities.
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