Tim Steer to leave New Star for Artemis

Tim Steer, one of New Star's top-rated fund managers, has resigned from the fund management company and will leave once the £115m takeover of the troubled group by rival Henderson is completed later this month.

His departure is a huge blow for Henderson. Mr Steer was one of the few New Star managers to have maintained his strong investment track record over the past two years, and he remains highly regarded by many financial advisers.

His popular £185m UK Alpha fund has delivered first-quartile performance since it was launched in 2001, achieving a total return of 17.7pc against a loss of 5.6pc among its UK All Companies peer group.

Mr Steer said that he was sad to be leaving but that he was looking forward to joining an 'exciting' company. He added: "Artemis asked me to join them eight years ago but I turned them down - I'm just fortunate that they have asked me again."

Mr Steer will run retail and institutional money funds at Artemis and will also help develop its hedge fund business. Details of which funds he will be running have yet to be announced. His colleague Stephen Yiu will also be joining him at Artemis.

Ben Yearsley of financial advisers Hargreaves Lansdown said: "It's a blow for the combined group that one of the star managers won't be joining. Tim Steer has a very good long term track record and his recruitment by Artemis is a coup for them. At this stage it is unclear what he will be managing at Artemis, therefore investors in his existing fund should sit tight until more information is forthcoming. "

A Henderson spokesman said: "This doesn't affect the benefits and value of the deal. HGI has a well respected UK equity team as well as there being further talent in the UK space at New Star.

"We are in positive late stage discussions with other members of the New Star team. The loss of Tim Steer, before we had the opportunity to complete discussions, while disappointing, is not material to the overall attractiveness of the proposed acquisition."

Mr Steer's departure will increase speculation that Richard Pease, New Star's highly regarded European fund manager may also jump ship.