New Star to close sub-Sahara fund
LONDON (Reuters) - Asset manager New Star, which is being bought by rival Henderson (HGGH.L), said on Monday it was winding up its African fund due to deteriorating market conditions.
The fund, New Star Heart of Africa Fund, was suspended in December last year when it was valued at 29 million pounds.
"Since that announcement, the investment climate in the sub-Saharan African equity markets has continued to deteriorate as the repercussions of the credit crunch are felt more globally," New Star said in a statement.
"It has become increasingly apparent that to reopen the fund to dealing would significantly disadvantage the remaining investors."
New Star, which said it will provide further details to the fund's investors shortly, was not immediately available for comment.
Last month, Henderson said it would pay 22 million pounds for New Star's ordinary shares, equivalent to 2 pence a share.
It would spend a further 73 million pounds on preference shares to be issued as part of a debt restructuring deal agreed by struggling New Star in December.
At its peak four years ago, New Star had a market value of about 1.5 billion pounds and managed more than 20 billion pounds in assets.
The fund manager ultimately succumbed to a heavy debt load, slumping markets and weak investment performance.
(Reporting by Cecilia Valente; editing by John Stonestreet)
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