New Star founder John Duffield has reached agreement with Jupiter to split the New Star Investment T...
New Star founder John Duffield has reached agreement with Jupiter to split the New Star Investment Trust (NSIT), with Jupiter bearing the estimated £400,000-£450,000 reconstruction fees.
Jupiter, which claims to have around 70 current employees with savings in the trust, said it will continue with legal action if the reconstruction does not take place by 25 October.
According to Jupiter, both groups face significant costs over the legal action, which amounts to around £1m for Jupiter alone. The group started the legal action last year in an attempt to force Duffield, chairman of NSIT and its largest shareholder, to split the trust, which, according to Trustnet, had an NAV of £84.28m on 28 June this year.
Essentially launched as a way of sheltering payouts from Commerzbank to Jupiter employees, the trust, initially managed by Jupiter, followed Duffield to New Star.
Since then, Jupiter has sought to force Duffield to split NSIT and allow shareholders to choose whether they want New Star or Jupiter to manage their assets. Duffield maintains, however, that he was never against splitting the trust but believes it is fair those wishing to exit it should bear the cost of the reconstruction.
Duffield said: 'I have always been in favour of a reconstruction of NSIT, provided those wanting the change pay all the costs.
'I am delighted Jupiter has finally accepted a reconstruction of NSIT on the basis I first put forward more than a year ago, before it commenced legal proceedings against me.'
Jupiter is not claiming victory yet, however. The group's joint chief executive, Jonathan Carey, said: 'Jupiter is pleased with this major step towards a reconstruction we have been waiting so long for. But we won't be opening the champagne until the reconstruction has finally gone through.'
Under Duffield's reconstruction proposals, which will be put to shareholders at an EGM in the coming weeks, the trust would be split into two sharepools ' continuing shares and elected shares.
The assets of the trust would then be divided into two pools based on the underlying NAV of the elected share pool and the continuing share pool.
The elected share pool would be transferred to the relevant Jupiter managed successor vehicle.
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