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Investment view – Brian Tora

It is not often you are invited to be present at the birth of a star. Last

week John Duffield&#39s new fund management company – New Star – was launched.

The chosen venue was the London Planetarium. Rather cheesy, I thought, but

there was nothing cheesy about the presentation.

Sir Patrick Moore kicked off the proceedings with a voice and delivery of

such vigour that it contrasted rather sadly with the shambling old man that

addressed us. Just enough of the team behind New Star were on display to

demonstrate the seriousness of the enterprise. As one who has sampled

sufficient corporate hospitality to have acquired some critical judgement,

the home team pitched it about right for the audience. Those with long

memories will know that the increasing level of hype in this wonderful

industry of ours is not something I always view as right and proper.

In my capacity as someone who has directed the purchase of collective

investments in the past, I have had surprisingly little to do with Jupiter.

Last week was the first time I have ever met John Duffield. Mark Skinner,

on the other hand, I have known since he was a junior salesman at Save &

Prosper. As head of retail, he has a big job ahead of him, but if anyone is

up to the task, it is Mark.

The launch of new fund management companies is not a common event. Not so

very many years ago, Nicola Horlick and her team from Morgan Grenville

launched Societe Generale Asset Management with no less of a fanfare than

that I am sure will accompany the creation of New Star. John Duffield was

certainly direct about one aspect of this new venture. It is at the

beginning that you have the best chance of getting it right. New funds are

easier to coax through hoops than bigger, established vehicles. You never

get a better marketing opportunity than at the launch.

Will they succeed? Well, SGAM has established itself in the marketplace,

admittedly with the backing of a powerful European parent. But they are not

so much in the news these days, showing that early momentum can be

difficult to maintain. Remember, too, this is becoming a very crowded

industry. It is not just new companies trying to attract our custom but

existing companies are also finding new owners, new brands are being

created and, notwithstanding a poor Isa selling season, financial

advertising to encourage the independent financial adviser to support this

fund management house or that approach to investing seems as buoyant as

ever.

New Star is unapologetic over the adoption of the “star” approach to fund

management. Not for it investment committees laying down a set of rules to

which managers must adhere – no buy lists or structured investment process

here. Instead, an environment that hopefully will encourage those who

might otherwise have set off on their own, running hedge funds, to

participate in the growth of what Mr Duffield and his colleagues clearly

hope will be a leading force in the fund management world. I wish them all

every success. Their progress will be worth documenting. In a world as busy

as this – and one where I strongly believe gaining above average market

performance is becoming ever more difficult – their success is not

guaranteed. But at the very least it will make a wonderful industry case

study.

Trying to guess which of the models in Madame Tussauds was made of wax and

which would leap out and surprise us all was something of a highlight of

last week. Markets lacked lustre and May overall saw the FTSE 100 Index

retrench from its attempt to breach 6,000. By the time you read this, I

will have enjoyed – or otherwise – the delights of the PIMS Conference. If

confidentiality and libel laws permit, I will share my experience with you

next week.

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