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Henderson fights back in bid to keep new stars

New Star lynchpin Guy de Blonay has provided Henderson with a timely boost this week after announcing his intention to join the firm at the completion of the proposed merger.

De Blonay confirmed yesterday that he is to continue running his global financials fund only a week after Henderson announced the closure of its own offshore horizon global financials fund in June, citing the fact that it had failed to get enough demand due to the drastic conditions in 2008.

At the announcement of the proposed deal in January, Formica himself acknowledged that de Blonay was one of the key targets the group was looking to secure and described him as “one of the top two financial managers”.

De Blonay says: “I believe that Henderson is fully committed to supporting my desire to restore fund performance to the levels achieved prior to 2008, and provide a stable and flexible environment to do just that. At this stage I can confirm that I have decided to join the forces of an already strong investment house to ensure continuity in the running of my mandates.”

Though the swallowing of New Star by Henderson is effectively a done deal the success of the their integration hinges on how many of New Star’s top fund managers are persuaded to set up shop at Henderson’s new headquarters in Bishopsgate.

Therefore as one of the few managers to have their reputations left in tact by New Star’s intense woes, news of de Blonay’s continuation would have undoubtedly sounded relief for Henderson chief executive Andrew Formica and the thousands of retail investors with long-term savings tied up in New Star’s unit trusts.

The proposed deal will see Henderson/New Star become the fifth largest asset manager in terms of retail assets but more names like de Blonay will be needed to reflect that status.

De Blonay joined New Star in September 2001 having spent the previous six years at Jupiter Asset Management. He employs a bottom-up approach on his £118m financials fund, which is up 21.3 per cent over the past five years.

News that he will move to Henderson follows last week’s blow from UK alpha fund manager Tim Steer that he is to leave for Artemis on completion of the merger. Henderson says the loss of Steer does not affect the deal in any way but you can bet that Artemis was suitably chuffed with its coup.

Formica says he intends to retain the majority of New Star funds with managers likely to take on more than one fund given the costs and administration involved in shutting or merging funds.

He says: “We feel that would be beneficial to those holding the funds as they do not want to go through the rigours of moving across to another.”

The firm’s chief investment officer David Jacob says that he still hopes to keep 80 to 90 per cent of the managers he wants from New Star at the conclusion of the deal. He’ll be relieved to see one of the pillars of New Star has agreed to move across to provide part of the foundation of the Henderson offering.

Steer’s departure fuelled speculation that New Star’s European growth fund manager Richard Pease may also look to jump ship. But the latest news that he has invested £500,000 of his own money into the fund has sent out a strong signal that he may also stick with the firm.

Hargreaves Lansdown senior analyst Meera Patel says Pease’s purchase suggests he will stick with the fund unless there’s another interested party involved that might look to buy it out. She says: “He has said himself that he’s not going to put in half a million pounds of his own money and then walk away from the fund.

“He’s made the investment but does that mean with Henderson having their own proposition that he might buy out the fund and manage it himself or get another party interested to buy it out?”

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