Assirt has slapped a hold notice on Paladin property trusts following the decision by Norwich and Paladin minority shareholders to offload the group to Deutsche Asset Management.
The research house says the decision to place the two property funds rated by Asirt on hold was based on uncertainty about Deutsche’s intentions to merge the trusts with its own funds management operations.
“In Assirt’s opinion, investors should refrain from further investment in these products until advised otherwise,” states a notice from the group.
Norwich announced it would sell its 50.1 per cent stake in property funds manager last Thursday. At the same time, Paladin’s minority shareholders also agreed to sell the remaining 49.9 per cent stake. The sale follows the merger between Norwich Union and UK Insurance Group, CGU. The new company viewed Paladin as a non-core investment.
Assirt rates two Paladin property funds, the $327 million Paladin Property Securities fund and the Paladin Property Securities Pooled Superannuation trust.
Paladin also manages two listed property trusts, the Paladin Commercial Trust and the Paladin Industrial Trust. Deutsche will merge the commercial trust with its own office trust, and the industrial trust with its own industrial trust.
Deutsche says it will merge the unlisted trusts into its funds management group.
Assirt says it is unclear how Deutsche will integrate Paladin’s operations into its own. “Notwithstanding Deutsche Asset Management’s claim that their property securities investment style is similar, the future management process of the Paladin products cannot be guaranteed until we are advised of the future structure of the funds and the team,” the statement says.
“Additionally, Assirt has not reviewed the operating capability and structure of Deutsche Asset Management.”
