Henderson New Star commences fund rationalisation

Henderson New Star has made its first steps towards group-wide fund range rationalisation, two month...

Henderson New Star has made its first steps towards group-wide fund range rationalisation, two months since the two businesses came together.

Graham Kitchen and Andrew Jones' Equity Income vehicle is being merged into the pair's Higher Income fund, growing its assets under management to over £250m.

The group will now have three funds in the UK Equity Income space - Higher Income, the £200m Growth & Income, also run by Kitchen and Jones, and James Henderson's £193m Equity Income fund.

Henderson's fund has outperformed Kitchen and Jones', having returned 30.8% and 29.3% over one and three years, according to Trustnet. This compares to the IMA UK Equity Income sector average of -19.2% and -16.8%.

Higher Income will be a more concentrated portfolio of stocks, with a mid and large cap bias seeking higher yields.

Equity Income will hold a greater number of positions and will invest lower down the cap scale. Both will sit in the IMA Equity Income sector.

Meanwhile the £13m New Star Hidden Value fund, formerly run by Jamie Allsopp and £31m Select Opportunities, previously run by Charles Deptford, will both be merged into Stephen Peak's UK Alpha fund, taking his combined assets to over £202m.

With 33 new funds coming over from New Star's range of retail funds, further mergers are planned, however the burden of both businesses running off two different administration platforms means a total overhaul will not happen for the foreseeable future.

New Star uses IFDS while Henderson's platform is BNP Paribas. It is expected any further mergers to take place in the near term will be those run from housed from within the same platform.

It is thought the amalgamation of the administration platforms could take between nine and 12 months.