S&P gives AMP Capital Equity Fund ‘sell’ rating

Standard & Poor’s Fund Services (S&P) has placed a ‘sell’ rating on the AMP Capital Equity Fund following the resignation of Simon Fitzgerald, who is the fund’s financials and listed property analyst.

His departure is the sixth in the space of nine months, and S&P believes it reflects the AMP Capital Investors manager’s ongoing struggle to retain staff.

In November 2009, the team lost its resources analyst, Gary Armor, with equity analysts David Flynn and Kelli Meagher separately deciding to take 12 months’ personal leave.

A month earlier, the manager had appointed senior portfolio manager Greg Barnes to assume team leadership duties. Barnes was also given the resources sector research responsibility following Armor’s departure.

S&P then decided to place the fund ‘on hold’, awaiting clarity from the manager on its planned process improvements, team restructure and recruitment.

Two further departures from the AMP Capital team occurred earlier this year, resulting in a ‘sell’ rating for its Small Companies Fund.

S&P fund analyst Justine Gorman said the announcement of Simon Fitzgerald’s departure this week indicated that the manager’s efforts to stabilise the team had not been successful.

Gorman also expressed concerns about the inability to fill opened positions within a reasonable period of time.

“Given the manager’s broad market coverage approach, S&P considers the current team of four to be under-resourced,” she said.

AMP Capital has indicated that it is committed to the Australian equity large-cap market, although it acknowledges the challenge ahead in rebuilding the business and improving its standing with research house and the investing community.

Gorman noted that, from this point on, any review of the fund’s rating would be driven by AMP Capital.