New Star Closes $700M Hedge Fund To New Investors

Mar 13 2008 | 9:06am ET

London hedge fund New Star has closed its U.K. Gemini fund to new investors at US$700 million.

Gemini, a U.K. mid-cap long/short equity fund, has experienced big inflows over the past six months. Manager Tim Steer has been concerned about keeping up performance—the fund returned some 25.7% last year—if it grows too rapidly.

The firm said it will review the fund later this year to determine if it should remain closed.

Back in January, New Star was not so optimistic, saying the troubles related to the credit crunch had impacted the firm's overall 2007 profit, performance and assets under management. The firm’s assets under management fell 6.5% in the second half to £23.1 billion (US$45.2 billion), as many of the firm's hedge funds trailed their rivals.

Worse still for the firm, two months ago it said in a statement that it is “not optimistic” about this year, and warned that investors should expect further redemptions, especially by European clients in its European funds. The Gemini fund seems to be a bright star in New Star's constellation of funds.


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