Weeping crowds in City as New Star shareholders lose everything...

New Star Asset Management shares, which have fallen nearly 70 % since Monday, ended the day down 30 per cent at 4¾p.... " one of the leading brands in the retail fund management industry as well as a significant player in fund management of institutional funds and alternative investments. This has been achieved by employing talented and experienced people across all our activities..." as their website boasts.

One of the UK's ..er...star fund managers, (in a statement made after the market closed) has agreed a deal with its bankers including HBOS, Lloyds TSB, HSBC and RBS, will cancel £240m of New Star’s £260m debt in return for a 75 per cent stake, leaving existing shareholders with only a quarter of the business.

The lenders will cancel £240m of New Star’s £260m debt in return for a 75 per cent stake, leaving existing shareholders with only a quarter of the business.

New Star’s high-profile founder and chairman John Duffield will stay with the company, while current fund managers will be encouraged to stay with a 5 per cent issue of ordinary shares at their diluted price.

New Star will also issue £100m of new preference shares, of which the banks will take up £94m with £6m available as an incentive for some "key" employees / directors.

The lenders hope that thhere won't be rush for the door by the underperforming fund managers, who have been previously been paid bonuses in (now worthless) stock options. .

Earlier in the day New Star’s rival, Neptune Asset Management,said they could be interested in buying part or whole of the company.

Management maestro and founder of New Star , John Duffield , 68, whose ex wife,Vivien, daughter of the late property tycoon Sir Charles Clore, described him as 'a wonderful fund manager but a lousy husband' wasn't to be found today at his usual table in Signor Sassi's, the Italian restaurant just across from the Knightsbridge offices of New Star.

New Star .. more like Black Hole.... but then CEO Howard Covington, was educated as a theoretical physicist and tinkers with quantum physics at weekends in his garden shed.

UPDATE Thursday 12.00 GMT : NYT today
Fortress, the Hedge Fund, Is Crumbling
"On Wednesday, Fortress’s shares fell 25 percent to $1.87, a new low, after the company temporarily suspended withdrawals from its largest hedge fund. Investors had asked to withdraw $3.51 billion from the money-losing fund, Drawbridge Global Macro."