Citigroup funds on hold after transfer to Legg Mason

Standard and Poor’s has placed a number of Citigroup Asset Management’s funds and sectors on hold following the transfer of the division to Legg Mason, which was announced on Friday.

Standard and Poor’s fund analyst Greg Barr said it was prudent to place all funds managed by Citigroup on hold until the impact of the sale could be assessed.

Barr said the sale was likely to have little impact on domestic sector products, such as Australian equities and fixed interest, aside from reporting lines, because there was no replication of services.

“Legg Mason haven’t really entered the market so we’re pretty comfortable with those asset classes. We just wanted a bit of clarification on who the teams are reporting to, and changes like that,” he said.

However, he expected some consolidation of international products to result from the sale.

“For the global equities and global fixed interest…there’s replication between what Legg Mason offers and what Citigroup have, in the past, sold here. We want to find out what’s going to be offered going forward and how that’s going to be managed.”

Barr said Standard and Poor’s was meeting with Citigroup today to discuss details of the company’s transition plans. He noted the deal was not effective immediately, with the transaction expected to close in the fourth quarter.

Standard and Poor’s has also announced ratings of Fidelity Investments Australia’s global equities fund and Australian equities fund.

The research house has assigned the group a strong rating, after reviewing Fidelity’s business management and operating capabilities.

The global equities fund was rated four stars, while the Australian equities fund was assigned a three star rating.