New Star Asset Management, one of the UK’s best known fund managers, has had to give up 75% of the business to its banks in a deal that will all but wipe out shareholders and see the company leave the stock market.

Under the terms of the deal, five banks – HBOS, Lloyds, Royal Bank of Scotland, HSBC and National Australia Bank – will cancel £240m of New Star’s £260m debt in return for a majority holding, leaving shareholders, including its founder John Duffield, with the remaining quarter of the business.

Financial Times