S&P places Challenger funds ‘on hold’

Ratings house Standard & Poor’s has placed an ‘on hold’ rating on the Challenger Smaller Companies and Microcap funds based on the impending departure of its portfolio manager, Michael Courtney.

S&P announced the new rating today, explaining Challenger had advised that Courtney would be leaving the team in late April after two years at the helm and five years with the funds management company.

Commenting on the re-rating of the funds, S&P analyst Jane Wu said the ratings house acknowledged Courtney had maintained the investment philosophy and process that had been established by his predecessor and that he had been able to deliver returns.

“We observed in the 2007 review that the team of three had bedded down and it was expected that the two senior analysts would be in a position to bear equal load in coverage in due course to decrease ‘key person risk’,” she said.

She said that Courtney’s announced departure had prompted S&P to place the funds ‘on hold’.

Following the departure of Courtney, the funds will be managed by the team’s two senior analysts, Alex Milton and Michael Besley, in a co-portfolio-manager structure maintaining the same philosophy and approach that had previously applied.

S&P said it would be reviewing its ‘on hold’ rating of the Challenger funds in due course.