Last spring's decision by New Star Asset Management to lift debt to return £360m (€468m) to shareholders, looked like a pretty good idea at the time. Right now, however, servicing resulting interest charges has put a burden on the boutique. Its days of independence may be numbered if the market deteriorates further.

New Star arranged the £350m facility with Bank of Scotland in April, to return cash to investors, including senior executives. To help service resulting net debt of £250m, the company, led by John Duffield, has decided to slash its final dividend to 1p, making the payment for the year 5p, against an expected 9p.