THE recent staff shuffle at BT Funds Management and AMP Henderson Global Investors has posed the question: How important are individuals to the performance of a fund manager?
BT announced a recruiting coup last week with the signing-up of AMP’s head of Australian equities, Marcus Fanning. He replaced a BT veteran, Rohan Hedley, who had overseen a steep slide in BT’s investment performance.
The depth of BT’s problems was illustrated by the latest InTech survey of balanced funds, which ranked BT last out of 36 funds.
AMP promoted one of its existing managers, Michael Evans, to replace Mr Fanning.
Research groups such as Assirt, Morningstar and van Eyk all agreed that these changes on their own did not warrant altering the ratings for BT or AMP.
Morningstar retained AMP’s four-star rating, which indicates a “very good” quality fund manager, and noted the significant depth and stability in AMP’s Australian equities team.
BT’s three-star rating, which indicates a “good” quality fund manager, was also retained. Morningstar said the appointment of Fanning and two other recruits, including Westpac Financial Services’ Michael Migro, was a “significant step in strengthening BT’s highly active investment process”.
As well as the new staff, Morningstar noted that BT was putting in place new processes so that it had clear risk parameters and stronger structural macro insights to support equities management.
It concluded by saying that BT’s three-star rating “has been tenuous and under threat of potential downgrade for some time, and remains under close observation”.
“Morningstar considers the latest developments to be positive initiatives which may arrest the declining risk-adjusted performance of BT’s funds and allay the concerns of investors.”
