Van Eyk not toeing the line on Rothschild rating
Van Eyk Researchhas placed a hold onRothschild Australian Asset Management’s (RAAM)International Equities fund, going against decisions earlier in the week by both Assirt and Morningstar to retain the fund’s existing rating.
The announcement by RAAM of its intention to seek an equity partner to help expand its presence in the Australian market prompted the research house to take action and place the International Equities fund on hold.
Meanwhile, according to van Eyk Research director Rob Prugue, domestic asset classes have retained their existing ratings because RAAM chief executive Peter Martin has been able to lock in key staff.
In an official statement, Van Eyk Research said although Putnam Investments has confirmed their willingness to continue as the RAAM manager of offshore assets, the decision as to its continuation will ultimately depend on the new owner.
Prugue says while RAAM is one of the few managers it rates highly across a number of asset classes, the existing equity search does have the potential to create new implications for the fund.
The statement confirms the uncertainty does not lie with RAAM, but rather with its eventual buyer. If the buyer has its own international asset manufacturing capabilities, the temptation would be to cease Rothschild’s current outsourcing agreement with Putnam in an effort to recoup some costs from the acquisition.
Prugue says while he did agree with Morningstar that Putnam Investments could be the new equity contender, he says this is now unlikely given the events of September 11 and the effect it has had on many businesses to reassess their near term plans.
He is confident the hold will not be in place for long.
“I think the situation will be resolved relatively quickly, like the next three months,” Prugue says.
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