Fresh battle over New Star

By James Molony

LONDON (Reuters) - John Duffield set up New Star Asset Management vowing to put his fund managers' names in lights. Seven years on, his firm is in the spotlight, but for the wrong reasons.

The combative 69-year old Briton is battling to offload his company's 236 million pound debt pile to banks who may well end up controlling New Star in a debt-for-equity swap.

It would be a huge wrench to cede any sort of control for Duffield, even if his stake has fallen below 10 percent, said Evolution Securities analyst Jason Street.

"It looks as though he doesn't have much choice... It is his baby though," Street said.

Duffield is no stranger to negotiating with bankers and has a tough side which the financiers involved in this week's debt talks may find aimed in their direction.

He is fighting to ensure the survival of New Star which debuted on the stock market in November 2005, priced at 225 pence per share.

Its shares rose as high as 492 pence but have lost virtually all of their value this year as clients, unsettled by the rapidly spreading financial crisis, pull their cash out of stock markets.

In 2000, Duffield caused uproar by comparing executives at Commerzbank to Nazi leaders in a spat over a 25 percent stake in fund manager Jupiter.  Continued...