Fledgling value manager 452 Capital has been given an overall ‘Buy’ rating for its Australian share product offering in InvestorWeb Research’s first ever review of the company.
While the rating is strong, particularly in the face of a lack of performance history, InvestorWeb investment analyst Tara Bell has warned against “a high level of key person risk”.
FormerPerpetualinvestment director Peter Morgan, who founded 452 late last year, has exclusive responsibility for portfolio construction, and “sole discretion over what, when and how much to invest,” Bell says.
The ratings given to 452 in the recent review included a ‘Strong Buy’ rating for the team, and ‘Investment Grade’ ratings for processes and organisation, resulting in the overall ‘Buy’ rating.
“Morgan succeeded in building a strong team at Perpetual, and there is no doubting his potential for doing similarly at 452,” Bell says.
The 452 team handpicked by Morgan consists of formerColonial First State(CFS) senior portfolio manager Suellen Henry and equities dealer Ben Hoad, formerWestpacportfolio manager Michael Hughes, and formerMorgan Stanleyportfolio manager Kirsten Thomas.
“While there is no performance history to provide a guide as to how the team members will perform together, it is evident that Morgan will drive the bulk of investment performance. On this basis, the prospects for the CFS 452 Australian Shares Fund are most promising,” the report states.
According to InvestorWeb, the value-based approach does not deviate significantly from that previously developed by Morgan at Perpetual.
CFS supplies all administrative, distribution and client service requirements for 452, and will offer a single Australian shares product through the FirstChoice master fund, commencing in late February. There will be one retail offering for the first three months, after which a wholesale product will be launched.
“The alliance makes sense, as few boutiques are able to successfully replicate these capabilities of a large, established fund manager,” InvestorWeb head of managed funds Martin Kerr says.
