TheWestpac Bank’sacquisition of theBT Financial Grouphas continued to wreak havoc on the beleaguered fund manager’s Australian equities capabilities, with two investment research houses urging their clients to sell out of BT funds yesterday.
TheLonsecresearch house yesterday placed a “Redeem” rating on BT’s flagship Australian equities fund, the BT Australian Share Fund, whileAssirtplaced a ‘Sell’ recommendation on all BT Australian equity, Australian fixed interest and diversified products.
The ratings downgrades came as BT announced that Andrew Brown, the head of Australian equities at the Westpac owned Sagitta Rothschild, would take over the management of BT’s Australian equities portfolios, including the BT Australia Share Fund.
The news followed the decision by Marcus Fanning, the head of Australian equities at BT, to not continue with the group in the wake of Westpac’s $900 million acquisition of BT.
In a statement issued yesterday, Lonsec said Fanning’s departure was the final straw for BT investors, mitigating many of the positive changes made within the group’s Australian equities division over the last twelve months.
“Fanning’s departure has introduced further elements of uncertainty regarding the BT / Sagitta / Westpac integration and undermines the potential for BT investors to have continuity in the management of their Australian equity investments,” Lonsec says.
Fanning was poached fromAMP Hendersonin May 2001 to manage BT’s Australian Share Fund after the departure of Rohan Hedley, who had presided over a period of significant underperformance for the fund.
Analysts had welcomed Fanning’s appointment, saying at the time that his stock picking ability and strong focus on a team based processes and risk control would be a positive for BT unitholders.
Fanning’s departure follows that of BT’s chief executive Ian Martin, chief investment officer Gary Symons and chief operating officer Graeme Fowler.
BT’s Australian equities small cap team, made up of Brian Eley and Ben Griffiths, will also not be continuing with the group.
BT has also appointed the Frank Russell asset consulting group to head its search for an international fund manager to manage its international equity funds.
The group has previously announced that it would outsource its international equities capabilities once its acquisition by Westpac was completed in October.
Westpac has appointed Simon McNamara, formerly Deutsche Bank’s global chief information officer, to head up the program to integrate BT into the Westpac fold.
