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New Star merging Tri-Star fund into cautious portfolio

New Star is to streamline its fund range in the cautious managed sector and plans to merge its struggling £28.2m Tri-star fund into Craig Heron’s £47.6m cautious portfolio.

The merger will take place on August 8 subject to FSA and shareholder approval.

Tri-star was set up in July 2006, offering equal exposure to equities, bonds and property, but performance has been poor, losing 16.7 per cent in the past 12 months, according to IMA figures.

Chief investment officer Gregor Logan was responsible for asset allocation of the fund and will now focus on institutional mandates. Roger Dossett ran the property portion, Edward Collins worked on equity and James Gledhill focused on the bond component.

Heron’s fund of funds is seen as the more flexible investment option, particularly as the firm recently relinquished the requirement to produce an income, which was seen to restrict the fund’s investment style.

The move is the latest in a line of changes made by chairman John Duffield which have included the merger of James Ridgewell’s UK special situations fund into Tim Steer’s UK alpha fund.

Managing director Mark Skinner says: “Tri-star was designed to be cautious in nature but the unprecedented fall in the value of the three major asset classes highlighted the need for a greater level of flexibility and diversification.

“Investors in the cautious portfolio should benefit from the fund’s greater adaptability and broader investment remit.”


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