Research house Assirt ratedAMP Financial ServicesandAMP Henderson Global Investorsas “a well-resourced [group] that has…sound investment processes”, but recommended changes within its property investment division.
Broken down to various categories, AMP got a ‘strong’ score for its business management and operating capability, Australian shares management of capital and active quant, enhanced assets, international fixed interest and direct property.
Most of the categories rated by Assirt scored in the realm of ‘competent’. These were management of Australian value shares, Australian SRI share investing, international equities (including global technology and global growth), international SRI share management, Australian fixed interest, listed property and private equity.
One area that faired badly for AMP was that of tactical asset allocation (TAA). Assirt says AMP Henderson’s TAA application is weakened by the fact that it tilts to the competitor benchmark given that diversified managers have historically failed to add value in TAA. “Overall, Assirt believes improvements could be made to AHGI’s TAA process.”
AMP Henderson was otherwise praised for its stability and the wealth of experience its team possesses, although its listed property capabilities were downgraded from ‘strong’ to ‘competent’ because of concern over the size of the funds under management.
For its part, AMP Financial Services (AMPFS) was lauded for progress it has made away from its life insurance legacy which the research house believed handicapped the group. The group was noted by Assirt to have esteablished a specialist group to manage strategy in product management, rationalisation and improving service delivery to key stakeholders.
Assirt says the group should look to further rationalise its product range. Assirt says AMP’s strong performance at the sector level is often diluted at a product level, and as a result, “a number of products are considered by Assirt to be non-investment grade”.
The research group was concerned about AHGI’s listed property capabilities and downgraded them despite stating it felt the manager was well resourced overall.
“While Assirt believes the manager has a sound investment process, our main concern is with the size of funds under management [within listed property]. Funds under management currently stand at approximately four per cent of the market.”
“Given the level of consolidation that has occurred within the industry and the general reduction of alpha generating capability within this sector, AMP’s size may further reduce their value adding capability. Assirt would welcome process enhancements that would assist the manager in adding value.”
