Most of Colonial First State’s (CFS) Australian equities funds have been given an ‘on hold’ rating by research house Standard & Poor’s due to the departure of a key staff member.
The down grade of what are some Australia’s richest funds comes a day after CFS announced the highly experienced senior portfolio manager of its 39 Australian Share Funds, Simon Hudson, was leaving the group at the end of the month.
Hudson has run the $7 billion plus CFS Australian share funds since the beginning of 2004 and has over 12 years experience working with the Commonwealth Bank-owned business, which according to S&P/Assirt’s March market share report is still Australia’s largest fund manager ahead of Macquarie Bank.
“The volume of money [Hudson] managed and degree of experience he presented are sufficient to make his departure critical,” said S&P fund analyst Anatoli Chvand in a statement released this morning.
Not all of CFS’s Australian equities funds have been placed on hold with the flagship multi-billion dollar Imputation Fund managed by the division’s head Simon Shields and the 'core' Aust Share funds managed by Martin Littler not named by S&P.
Hudson will be replaced on October 1 by two other members of the CFS Australian equities team. Shields will take charge of the Australian Equities Fund and portfolio manager Jim Taylor, will assume responsibility for the Leaders and Geared Australian Shares portfolios.
S&P said it would keep the funds on hold until they had a chance to get the low down on Taylor in a face to face meeting to be held this Thursday.
“We intend to move as fast on this as possible and remove the hold as quickly as we can,” S&P head of fund research Mark Hoven told Money Management.
“Collectively our team don’t know much about Jim Taylor and its another reason for our cautious approach. On Thursday our prime intention will be to learn more about him and his style.”
Hoven said he was quite confident that the hold rating would be removed.
“We believe [Taylor’s] already managed about half a billion in that [CFS Australian equites] team,” he said.
Meanwhile, a spokesperson for CFS said that three other research houses including Navigator who were informed of Hudson’s departure by CFS last week had decided to maintain their original ratings of the funds.