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New Star in £9m deal to buy up Exeter funds

New Star has struck a £9m deal to acquire 13 unit trust and Oeic sub-funds from Exeter Investment Group in a move which boosts the acquisitive fund manager&#39s quest for critical mass.

New Star is assuming management of £310m of funds – 80 per cent of which invest in investment trusts, including splits – for 50,000 retail investors, bringing its funds to over £4bn.

The agreement represents another return to pre-bear market prices as New Star will pay around 3 per cent of assets under management, with the possibility of it paying an additional £1m in 12 months&#39 time.

In January, it paid 5 per cent for six Aberdeen Asset Management funds with £1.85bn under management.

The deal is set to be completed this month, after which Paul Craig, manager of the Exeter zero preference fund, will join New Star. Richard Scott, manager of the Exeter Pacific growth and global opportunities fund, will act as a consultant.

The funds include the zero preference, capital growth, managed growth, high income, global opportunities, Pacific growth, equity income, smaller companies, fixed interest, European, money market and zero portfolios.

Hargreaves Lansdown senior analyst Meera Patel says: “New Star has paid a fair price in a bear market. The deal gives Exeter better prospects and New Star the assets under management it needs.”

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