Fund Times: Updates for ABN AMRO/Fortis, Colonial First State, Credit Suisse, EQT/Lehman, MIR
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In recent news from the funds management industry you may have missed, ABN AMRO funds have now been rebadged Fortis. Colonial First State is terminating its hedge funds business, and Equity Trustees its High Income funds after Lehman Brothers' withdrawal from local asset management. In people news, Colonial First State has lost a member of its fixed interest team; there's change in the top ranks of Credit Suisse's Australian funds management business; and boutique MIR has hired a qualitative analyst.
ABN AMRO Funds rebranded Fortis
The ABN AMRO Asset Management Australia business has now been rebranded Fortis Investment Management Australia, following the completion of the separation of the worldwide ABN AMRO funds management business and its merger with Fortis Investments. Former ABN AMRO funds have now been rebranded Fortis (see Table 1 below), and we have also updated references and the Parent sections in our qualitative research reports.
In related news, Fortis has like many other fund managers taken steps to provide an equity ownership incentive to its funds management talent, establishing an investment management company, Fortis Investment Partners. Senior former ABN AMRO Australian equities investment staff own 60.0 percent of the equity in the company, and Fortis Investment Management Australia the remaining 40.0 percent.
Table 1: Fortis Investment Management Australia Funds
|Fund Name|| |
|Morningstar Category|| |
Net Assets A$m
|Fortis Investments Australian Equity||7899||Aust Large Growth||554.79|
|Fortis Investments Concentrated Australian||14114||Aust Large Growth||50.09||—|
|Fortis Investments Emerging Markets Equity||5485||Equity Emerging Markets||6.23||—|
|Fortis Investments Europe Equity||5479||Equity Europe||9.44||—|
|Fortis Investments Global Equity||4542||World Large Growth||125.98|
|Fortis Investments High Income Global Property Sec||12899||Global - Real Estate||63.22||—|
Colonial First State shuts down hedge funds business
Colonial First State has announced that it is terminating its range of hedge fund-of-fund products, after failing to achieve sufficient scale. The future of the team headed by David Bell is therefore now uncertain. The fund manager has estimated a six-month selldown period for most of the assets, and that remaining assets may take a further 12 - 18 months to sell because they are more difficult to convert into cash. Colonial First State has also indicated that it will not charge management fees for the funds during the selldown period.
Table 2 below shows the funds affected. We currently have a Morningstar Recommendation for the Global Diversified Strategies funds of 'Investment Grade' and are in the process of reassessing this and updating our existing research report.
In other Colonial First State news, Fixed Interest and Credit team member Justin Tyler, who worked on Colonial First State Wholesale Australian Inflation-Linked Bond, is leaving the firm in June for an origination role with an investment bank. Co-Head of Global Fixed Interest and Credit Warren Bird is seeking a replacement, and will manage the portfolio with Francois Kong in the interim.
Table 2: Colonial First State Fund-of-Fund Hedge Funds
|Fund Name|| |
Net Assets A$m
|Colonial First State MIF Global Diversified Strategies||8411||31-Oct-01||17.46|
|Colonial First State WS Fixed Interest Strategies||8415||31-Oct-01||5.56|
|Colonial First State WS Global Diversified Strategies||8051||22-Oct-01||66.57|
|Colonial First State WS Relative Value Share Strategies||8414||31-Oct-01||0.59|
|Colonial First State WS Tactical Strategies||8416||31-Oct-01||0.17|
Change in top ranks at Local Credit Suisse Funds Management Business
Credit Suisse Asset Management has appointed Stephen Giubin as Head of Asset Management and Gailie McIntyre as Deputy Head, effective 1 July, succeeding Keith Ince. In comments accompanying the announcement, Giubin and McIntyre indicated that Giubin will concentrate on managing the firm's investment teams, while McIntyre will focus on client service.
Giubin was formerly Credit Suisse's Head of Australian Equities, having joined the firm a year ago from Schroders. McIntyre has been with Credit Suisse since 1995, and has held positions in operations and administration in the investment banking and asset management divisions in Melbourne, Sydney, Hong Kong, and Tokyo, most recently as Chief Operating Officer for the asset management business since February 2006. She worked previously for the Treasury Corporation of Victoria, the Victorian Casino Control Authority, and JPMorgan Australia.
Giubin will join the board of Credit Suisse Asset Management Australia Limited, reporting to Credit Suisse's Executive Vice Chairman and Head of Asset Management, Asia Pacific Tony Iliya. McIntyre, already a director, will report to Chief Operating Officer Salman Shoaib.
We will be retaining our current Morningstar Recommendation for Credit Suisse's large-cap Australian shares capability of 'Investment Grade'. While we don't necessarily see this move as positive for the strategy, Giubin remains in charge, and Credit Suisse will add further analyst resources.
Equity Trustees terminates high income funds
Lehman Brothers has announced the closure of its Australian fixed interest and credit businesses, which has led Equity Trustees to terminate EQT Lehman Brothers High Income and EQT Lehman Brothers Wholesale High Income. Cash will be returned progressively to investors as the underlying assets are realised. Given this situation, we have downgraded our Morningstar Recommendation for this strategy to 'Avoid', as investors need to begin planning how to deploy this money.
The situation here appears to be the result of a global parent shutting down non-core businesses during a time of uncertainty. This strategy invested in riskier securities than a vanilla fixed interest manager, so selling down some of these assets will not be easy. There are also some illiquid holdings, such as an exposure to unlisted property, which are likely to take some time to liquidate.
MIR hires qualitative analyst
Sydney boutique MIR Investment Management has hired Andrew McLennan as a qualitative analyst. McLennan will cover retail, food and beverage, and selected industrials stocks analysed previously by Maurizio Viani, who left the firm recently. McLennan was formerly head of Credit Suisse's retail stock research team, and before that a small companies analyst with JPMorgan. McLennan will contribute insights to the management of funds including MIR Australian Equities Class A and MIR Emerging Opportunities Class A.