An investment agreement which saw New Star run £1.4bn of assets on behalf of Family Assurance Friendly Society has been cancelled.
The child trust fund (CTF) provider today gave notice to New Star of termination of the contract, which it says will be transferred to a new manager on 1 December.
Family, which looks after the CTF accounts of more than 500,000 children, told New Star it intends to have the funds managed predominantly on an index-tracking basis by the new manager.
New Star was first appointed as investment manager by Family in February 2004 for a four-year period and was reappointed in February 2008 on a rolling three-month basis.
New Stars assets under management were £19.1bn as at 27 August.
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