Fund Times: Updates for Absolute Capital, Ausbil Dexia, BlackRock, Pengana
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In recent news from the funds management industry you may have missed, Absolute Capital's receiver has announced its intention to terminate the firm's funds; Ausbil Dexia has lost an analyst to a local hedge fund; BlackRock has completed rebadging its local product range; and Pengana has launched an opportunistic domestic listed property strategy.
Receiver announces intention to terminate Absolute Capital Funds
McGrathNicol, receiver for Absolute Capital, has stated its intention to terminate Absolute Capital Yield Strategies and Absolute Capital Yield Strategies Wholesale, following the decision on 22 February to place the funds management business into liquidation after failing to attract a buyer.
Absolute Capital froze redemptions from the funds in July 2007 during the first manifestation of the global credit crunch, when the market value of the funds' investments in collateralised loan obligations (CLOs) and collateralised debt obligations (CDOs) fell dramatically. Investment management for the funds has since December 2007 been undertaken by former Absolute Capital staff now employed by ABN AMRO, which bought 50.0 percent of the business in 2004.
Absolute Capital published an update in mid-April showing 45.0 percent of the portfolio being invested in CLOs, 33.0 percent in credit funds, and 21.0 percent in asset- and mortgage-backed securities, and estimating returns for the year to 31 January 2008 of –20.20 percent for the retail fund and –19.83 percent for the wholesale fund.
Ausbil Dexia loses analyst
Analyst Ben McGarry has left Sydney boutique Ausbil Dexia for a local private hedge fund. McGarry covered telecommunications, building materials, commercial services, consumer durables, and IT stocks for the four-star Ausbil – Australian Active Equity.
The firm said McGarry's departure had been motivated in part by the opportunity to acquire equity options in the hedge fund. Head of Equities Paul Xiradis said that until a replacement could be found, McGarry's responsibilities would be reallocated to other analysts.
Ausbil Dexia's large-cap Australian shares strategy currently has a Morningstar Recommendation of 'Recommended'. Our fund research analysts will be reassessing this, including the effects of McGarry's departure, as part of our sector review in several months' time.
BlackRock completes fund rebranding
BlackRock has now completed the rebranding of its Australian-offered managed funds, retiring the former Merrill Lynch brand. (BlackRock Monthly Income was rebadged last year.) The former Merrill Lynch Investment Managers business merged with BlackRock in October 2006. We have implemented these name changes on our database, and updated relevant references in our qualitative research reports. Table 1 below shows the new names and other data for BlackRock wholesale funds.
Table 1: Rebranded BlackRock Wholesale Managed Funds
Net Assets $m
Return 3yr %pa
|BlackRock Wsale Australian Growth Share||13193||11.14|| |
|BlackRock Wsale Australian Quant Strategies||12131||13.85|| |
|BlackRock Wsale Australian Share||3461||802.09||15.68|
|BlackRock Wsale Balanced||2798||1174.27||10.73|
|BlackRock Wsale Combined Property Income||10437||651.04||10.76|
|BlackRock Wsale Global Equity Enhanced Index||8053||77.41||2.9|
|BlackRock Wsale Global Small Cap||6944||256.89||7.28|
|BlackRock Wsale Global Titans||6945||49.31||5.24|
|BlackRock Wsale Hedged Global Small Cap||6946||176.12||12.81|
|BlackRock Wsale Hedged Global Titans||6947||37.84||10.45|
|BlackRock Wsale International Bond||2965||74.36||4.72|
|BlackRock Wsale International Gold||12423||42.9||25.31|
|BlackRock Wsale International Share||3112||51.24||5.63|
|BlackRock Wsale Managed Income||2724||185.48||5.65|
|BlackRock Wsale Monthly Income||11602||1254.08||1.62|
|BlackRock Wsale Property Securities||9287||24.13||3.52|
Pengana launches Opportunistic Property Strategy
Pengana Capital has launched a property fund intended to take advantage of merger and acquisition opportunities in the Australian listed property sector. The firm said that falling asset values and income would lead to significant rationalisation in the sector in the next two to three years, while the strategy would also target high-quality property stocks with depressed prices.
Pengana Opportunistic Listed Strategy will invest in a concentrated portfolio of seven to 15 property stocks, and will be run by former Deutsche Bank Joint Head of Real Estate Investment Banking Tim Shaw. The shop said that it expected to generate returns in excess of 18.0 percent per annum over a three-year period, and that the assets base would be capped at A$300.0 million.
The firm's existing listed property fund, the A$53.0 million Pengana Property Securities, has a Morningstar Recommendation of 'Investment Grade', largely because of a reduced focus within the investment team on domestic property investing.
In other Pengana news, National Australia Bank funds management incubation subsidiary nabInvest has purchased Malcolm and Lucy Turnbull's one-third stake in the business. The remaining two-thirds continues to be owned by Pengana's management and investment staff.