LONDON — New Star Institutional Managers' shares rose to about 275 pence on Nov. 8, the first day of trading on the Alternative Investments Market of the London Stock Exchange. The price was about 20% more than the 225 pence offer price for the money management firm in the highly publicized IPO, which is valued at more than £704 million ($1.2 billion). The management firm had about £15.2 billion in assets under management as of Sept. 30, New Star spokesman Michael Sandler said. Assets are up 42% from Dec. 31, 2004, and profits are estimated at "no less than £43 million" by Dec. 31, he said.
New Star was founded in 2000 by John Duffield, who holds 17% of the company and has not sold any shares. He also founded Jupiter Asset Management, which was later sold to Commerzbank. New Star will not raise additional money, and the IPO will allow institutions that backed the company — including HSBC, Fidelity Investments and the €50 billion ($59 billion) Royal Dutch/Shell Group pension fund — to sell their stakes. The amount sold as part of the offer is slightly less than 15% of the company, Mr. Sandler said. Institutional investors own 40% of the company, while employees, including Mr. Duffield, hold the rest. Under terms of their contracts, employees are not allowed to sell more than 25% of their shares immediately after the IPO, Mr. Sandler said.
Mellon, Wilshire universe medians up in third quarter
The median plan in Mellon Analytical Solutions' U.S. Master Trust Universe posted a 3.98% return on investments in the third quarter, confirmed Tim Clark, senior client relationship manager. Funds with higher equity allocations tended to perform better in the quarter, he said. Endowments performed best, returning a median 4.62%. Public funds returned a median 4.25%; foundations, 4.12%; corporate funds, 3.9%; Taft-Hartley funds, 3.4%; and health-care funds, 3.01%. The average asset allocation during the third quarter was 42% domestic equity; 24% domestic fixed income; 20% international equity; 5% alternatives; 5% other asset classes, such as private equity and energy; 2% real estate; 1% international fixed income; and 1% cash. The universe comprises 504 corporate, foundation, endowment, public, Taft-Hartley and health-care funds, 99% of which had positive returns during the quarter. The universe represents plans with assets totaling $1.6 trillion, and the average plan has $3.1 billion in assets.
Separately, public pension plans earned a median investment return of 3.89% in the third quarter, according to data from Wilshire Associates' Trust Universe Comparison Service database. Corporate pension funds returned a median 3.74%, according to the data. For the year ended Sept. 30, public pension plan investments returned a median 13.63%, while corporate plans returned a median 13.73%. Public funds had a median equity allocation of 61.2% and a median bond allocation of 28.4%, compared with a median of 64.2% in equities and 27.3% in bonds for corporate plans, according to the database. Foundations and endowments earned a median 4.67% on their investments in the third quarter and 14.59% for the year, according to the Wilshire data. They had a median 63.4% of assets in equities and 18.2% in bonds. Wilshire's TUCS database includes about 300 participants with about $2 trillion in combined assets.