Fund management sensation New Star Asset Management is struggling
Led by its colourful and sometimes controversial chairman John Duffield, New Star Asset Management has been forced to renegotiate its banking covenants which has seen more than £3.5 million added to the company's debts. The fall in the stock market has seen funds under management collapse by over £5 billion to around about the £14 billion level. This has reduced income and hit the company hard with speculation of between 50 and 60 job cuts in the short term with more in the pipeline if the situation does not improve in the short to medium term.
The company is looking to introduce cost savings of around £20 million a year with £10 million saved through job cuts and another £10 million by subletting part of the group's commercial property. New Star Asset Management has been one of the up-and-coming stars of the fund management sector since it was set up by John Duffield some time a go. He controversially left his former employment taking with him some leading fund managers and administration staff.
The last few months have been very hard for the whole fund management sector and this move by New Star Asset Management comes as no surprise.
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