New Star Capital Guaranteed fund is 100% invested in cash

New Star's Capital Guaranteed Hedge Fund has come within a few basis points of breaching its guarantee threshold and has subsequently moved 100% into cash, just one year after its launch.

The guarantee on the $170m UK long/short fund meant assets could fall 15% before the manager, Alan Miller, would have to take steps to protect capital. However, due to falling interest rates and bond yields, the amount by which the fund could fall moved to just 9%.

Over the course of the year, the fund has

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