vehicle will complement the European growth fund, managed by richard pease
New Star launches its large-cap European Leaders fund to the retail market this week, run by Richard Lewis.
The fund is designed to complement the mid and small-cap focused European Growth portfolio managed by Richard Pease.
Lewis, chief investment officer of New Star Institutional, the rebranded World Invest business purchased by New Star, focuses on the blue chip and larger mid-cap areas of the market.
His approach is characterised by growth at a reasonable price, using analysis of returns on cash invested. This involves an in-depth restatement of company accounts, providing a platform to assess value across companies in the market.
This method, Lewis said, allows him to gain a significant edge in the well-researched large-cap area of the market. As well as identifying value, he believes it is a powerful tool in avoiding losers, something that, over the past two years, has been crucial to maintaining track records.
While essentially a bottom-up stockpicking style, all investment carried out by New Star Institutional is done within a top-down analytical framework. This involves analysis of liquidity in global and local markets to determine whether the conditions exist for bull market and bubble-like behaviour.
According to Lewis, this determines whether a manager's focus should be on running winners, as the currently supportive liquidity conditions indicate, or adopting a greater focus on value and defensive plays.
Lewis expects little crossover with Pease's fund. However, the fund has no market cap restrictions and will hold between 35 and 40 stocks. As with all New Star retail funds, Lewis has a deputy manager, Michael Bartek. Lewis is deputy to Pease on European Growth.
European Leaders has New Star's usual pricing structure of 5.25% initial, 1.5% annual management fee, 3% intermediary commission and 0.5% trail.
Lewis is the first New Star Institutional manager to receive retail exposure but will not be the last, according to the group's marketing director Rob Page.
Page said the fund is key in the development of the group's mainstream equity offering. New Star now has products covering the UK large-cap, UK mid and small-cap, European large-cap, European mid to small-cap and UK equity income areas.
With the expected launch of a UK Special Situations fund, to be run by former Rathbones manager Patrick Evershed, New Star is beginning to develop funds around the edge of its range and further offerings are planned in these areas, Page said.
The group's next move, subject to regulatory approval, will be the launch of an offshore open-ended funds platform. This will give access to a number of its existing onshore funds, as well as offerings from New Star International managers in the major equity markets not covered by the onshore range.
Managers set to appear on the platform are Far Eastern fund manager, Ian Beattie, emerging markets manager, Brian Coffey, US manager, Mark Beale, and Japan manager, Michelle Sanders.
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