Duffield’s rising stars say thanks a million
THE popping of the champagne corks in Signor Sassi’s Knightsbridge restaurant will have a particularly satisfying sound this week for uber- fund manager John Duffield. A self- confessed workaholic, Duffield spends most evenings and lunchtimes entertaining business contacts at his upstairs table at the eaterie – just a stone’s throw from the headquarters of his firm, New Star Asset Management.
Last night he could celebrate becoming a stupendous £170m richer thanks to New Star’s float on the Alternative Investment Market, though he has vowed not to sell a single share from his 20pc stake.
But then he can afford not to, since he has already made a £200m fortune from his previous venture, Jupiter, now a bitter rival in the fund management field.
New Star’s stock market debut, where its shares soared by 20pc above the 225p issue price to 277p, has also made 40 of the firm’s 270 staff members of the millionaires’ club, including head receptionist Zoe Shaw.
The group is valued at around £850m, giving every member of staff a handsome windfall. The minimum handout is more than £45,000, though employees can only sell a quarter of their shares now and are not allowed to offload their holdings in full for four years.
The big winners – apart from Duffield himself – include his key lieutenant Howard Covington, master share-picker Richard Pease and executive Rupert Ruvigny, whose stakes are valued at around £25m apiece.
Fund manager Alan Miller, whose £5m divorce settlement to former wife Melissa was in the news this summer, has a 6pc holding worth around £ 50m. Former financial journalist John Jay has a chunk of shares worth about £2.8m.
Duffield said: ‘I am delighted. We have had an excellent response from investors. Our main job is now to do our best for investors and shareholders.’ About 14.7pc of the company’s shares were sold, raising £103.5m.
In its short life, New Star has become one of the country’s largest retail fund managers, pulling in small investors even in the difficult climate following the dotcom bust and the terrorist attacks.
It recently reported record halfyear results, with sales up 39pc to £ 43.1m and operating profits up 61pc to £17.1m, paving the way for the float. The Aim listing has been organised primarily to allow big institutional investors realise some of their gains.
Duffield’s backers include US group Fidelity, international bank HSBC and the Shell pension fund. British Airways’ staff pension fund also invested, so the float will be one bit of good news given its yawning deficit. New Star grew fast as a result of a series of takeovers. It now has £ 15bn of funds under management, and is ranked between Aberdeen Asset Management and F&C Asset management in terms of stock market value.
The success is seen by analysts as evidence that star money managers are perennially in vogue.
Duffield does not personally manage money, but supervises those who do. He believes in ‘star quality,’ and in the somewhat faceless world of fund management he stands out as an unconventional figure.
He forgoes the usual trappings of wealth, wearing blue pullovers instead of suits, though he indulges himself by owning two heavily lossmaking farms. He is known as both a hard taskmaster and an outspoken maverick, a reputation he first built at Jupiter. If an ordinary saver were asked to name someone in the grey and anonymous fund management business, they would probably mention either Duffield or ‘Superwoman’ Nicola Horlick.
Both Duffield and Horlick, oddly enough, hit the headlines by fighting with German bosses – she when she clashed with her employer Deutsche Bank and he in a highprofile spat with Commerzbank.
Educated at Harrow and Oxford, Duffield was determined to become rich to impress Sir Charles Clore, the father of his former wife, Dame Vivien Duffield. The couple divorced in 1976, with Dame Vivien describing him as ‘a lousy husband but an excellent fund manager’.
He has not remarried, though he is described by one friend as ‘robustly heterosexual,’ and there has been a string of well-groomed girlfriends.
Duffield set up Jupiter in 1985 with a secretary and a bookkeeper, and ten years down the line sold it to the Frankfurt bank. A bitter dispute over the buyout value of the remaining 25pc of the company led to Duffield’s sacking by his German owner. He dismissed them with damning epithets, including ‘ bloody Nazis’ and ‘terrible idiots’.
He settled a £15m claim for unfair dismissal in 2000 – before it went to court – for just £5m, though given his already vast fortune it seems he brought the case as a matter of principle rather than for the money.
Unsurprisingly perhaps, Duffield’s critics say he is too bombastic, too much of a one-man band. Though he says he wants to work until he is 90, people wonder how the group will fare when the 66- year- old tycoon does step down. He has appointed several high-profile nonexecutives, including Sir Dominic Cadbury, to the board, partly to allay such quibbles.
The squabbles with Jupiter, now run by Duffield’s former protege Edward Bonham Carter – brother of film star Helena – flared up for a while after the split. But yesterday, on the surface at least, it was all magnanimity. Jupiter said: ‘We wish them the best of luck.’
The firm is still owned by Commerzbank, though the Germans tried unsuccessfully to sell it a couple of years ago. For his part, Duffield might also clink his glass at the reflection that Jupiter now has £13.5bn under management – leaving it slightly behind New Star.