First S&P ‘AAA’ Aust equity rating to 452
International rating and investment data groupStandard & Poor’s(S&P) has granted its first Australian fund ‘AAA’ rating toColonial First StateFirstChoice Investments’ 452 Australian Share Fund — six months after formally launching Australian fund management ratings.
S&P deemed the relationship between CFS and 452 Capital provides many of the benefits of boutique funds management while also providing the fund with the back office support of a large institution, with CFS having legal and administrative responsibility for the fund while 452 is responsible for investment management.
The 452 fund is offered exclusively to retail investors through CFS, howeverChallenger Financial Servicesstruck a deal back in November which resulted in a quarter of funds flowing into its own Australian share fund going to 452.
Factors supporting the ‘AAA’ rating include 452 founder Peter Morgan's experience, track record, and the robust and proven investment process supporting the fund.
According to S&P fund analyst Ramon Eyck, Morgan remains integral to the business and its future success with Morgan having “one of the strongest track records in the Australian funds industry, established over his 13 years atPerpetual, and has already produced strong results at 452”.
Morgan's sole focus is investment management, through running identical portfolios for all 452 clients, however as a 50 per cent owner of the group he will inevitably be drawn into corporate issues from time to time, Eyck says.
“Morgan is applying the same investment process he employed at Perpetual, although he is now managing significantly less money, which gives him greater flexibility in his investment decisions.”
Since launching Australian Fund Management Ratings back in July, S&P has rated 26 Australian equity funds.
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