Jupiter is to pay former chief executive John Duffield £5m in an out-of-court settlement over his claim alleging unfair dismissal.
Duffield will get £2.5m in cash, with the remaining £2.5m to be paid into the newly founded John Duffield Charitable Trust. Both sides agreed to pay their own legal costs, which could amount to as much as £1m each.
The deal has also granted Duffield the freedom to poach Jupiter director Alan Miller for the board of his new company New Star Asset Man agement. However, NSAM is not permitted to recruit any more Jupiter employees or clients until Duffield's contract has been served out on May 26, 2001.
Miller runs Jupiter's special situations fund, which will now be taken over by Kenneth Warnock, who manages a number of institutional mandates for Jupiter.
It is expected that Duffield will try to poach further Jupiter fund managers after the May deadline next year.
Jupiter also agreed to NSAM taking over a number of its small offshore funds, as well as part of the Jupiter Investment Trust, created for Jupiter employee payouts following the recent Commerzbank buyout. These funds total approximately £300m under management.
NSAM is to launch a range of unit trusts in the spring and says it has already received significant interest.
In return for taking over the Jupiter offshore funds, Duffield and all NSAM employees have agreed to resign from the board of all other Jupiter investment trusts. This will mean seven resignations from seven Jupiter trusts.
A spokesman for Duffield says: “This settlement is an enormous kickstart for New Star Asset Management, which has already confirmed it is to buy World Invest from Union Plc. We are not aware of any other fund management company which has achieved such success within six months of inception.”
Jupiter chief executive Edward Bonham Carter says: “We are celebrating. New Jupiter will be even better than old Jupiter.”
Investment, p32; Bonham-Carter Profile, p39