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Trimming the financial fat

As the UK population embarks on yet another fitness regime with the start of the new year, some of the bigger players in the asset management industry are also looking to streamline and consolidate their operations.

While shoppers were vetoing the High Street in December, the corporate market was enjoying a swathe of buys and sells, including Société Générale Asset Management, which decided to offload its London-based asset management subsidiary to GLG Partners. The deal which is expected to be finalised during the first half of 2009 will see GLG acquire SGAM’s shares in the UK business.

As revellers celebrated New Year’s Eve, Aberdeen confirmed its intention to acquire Credit Suisse’s fund management arm, Global Investors business, for £250m excluding its fund of funds operation. Credit Suisse is to swallow the title through a 25 per cent equity stake in the new group’s operations.

Advisers say the all-share deal puts question marks over some of Credit Suisse’s star managers including income head Graham Ashby and ask if their management style will fit with that of Aberdeen’s.

Hargreaves Lansdown investment manager Ben Yearsley says there are likely to be a number of departures from Credit Suisse as a merging of the range is a certainty. He says: “There is likely to be an integration of the managers into the Aberdeen process but I wonder whether they will allow someone like Ashby to continue running his income range in his own style as Aberdeen is not as strong in the UK as it is in the emerging markets space.”

Rival fund managers continue to circle New Star for its business with Neptune Investment Management notably linked to a potential deal.

In December the troubled fund management group attracted a number of interested bidders after it agreed a debt-for-equity swap with its banks.

Speculation is also rife about a potential management buyout of its institutional arm. It is thought that the buyout will be led by Mark Beale and Richard Lewis, head and deputy head of the firm’s institutional fund management arm.

The duo were part of New Star’s founding team who joined in 2000 from WorldInvest. They are expected to head up a team of 16 and take more than £3.2bn of assets with them.

Details of the buyout remain unconfirmed by New Star but more news is anticipated over the forthcoming weeks with tongues still wagging over chairman John Duffield who is expected to leave upon its completion.

Meanwhile in the offshore arena, it emerged earlier this week that state owned Icelandic bank Kaupthing is seeking legal action against the British Government over its decision to place its UK arm in administration last October.

The legal proceedings from Kaupthing Bank’s resolution committee have “the full support of the Icelandic government “ according to a statement released through the Icelandic Prime Minister’s office.

The statement said: ” The government of Iceland has decided to examine any and all possibilities of Iceland seeking redress before the European Court of Human Rights for the application by UK authorities of the Anti-Terrorism, Crime and Security Act 2001 against Landsbanki last year.”

If a court decides the Government acted unlawfully then further legal proceedings may take place allowing the possibility for Kaupthing to seek compensation.

It is hoped that next Thursday’s update hearing from the provisional liquidator may shed more light on claims of those with KSF IoM assets.

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