CFS global property funds reassigned S&P rating

Standard & Poor’s (S&P) bumped Colonial First State’s (CFS’s) Global Property Securities funds from ‘on hold’ status to a three-star rating. High staff turnover led the research house to place the funds on hold in April when the head of global property securities, John Snowden, left the team.

S&P revised the rating following the promotion of senior portfolio manager Andrew Nicholas to top spot, noting that he was the funds team’s third manager in less than three years.

S&P fund services analyst Nathan Bode said they will be “looking for improved team stability in the future”, noting that further turnover in staff is likely to reduce S&P’s “conviction in the manager’s ability to select and retain key investment staff”.

“S&P considers CFS’s intention to appoint another Hong Kong-based analyst to focus on Asian-listed property securities, and to augment the two-person Europe/UK team with a new appointment, as important commitments to the capability — given the small size of the investment team and the disparate nature of the Asian and European property securities markets,” Bode said.

S&P said “a competitive advantage of the capability is the investment team’s access to the CFS equities, credit and infrastructure investment teams”. CFS’s listed property team also benefits from a strategic joint venture with Colliers International, which gives them access to “additional data and insights not available to some of the other rated managers”.