A large number of Australian equity small cap managers are underperforming due to high levels of staff turnover, according to a new sector update by Standard & Poor’s (S&P).
The report compiled by the research house revealed over 25 per cent of managers in this space had suffered in performance because of staff movements in the past six months, with the median manager in the sector failing to achieve its benchmark return.
S&P fund analyst Ben Sheehan feels the trend is in part due to the increasing numbers of small cap managers in the market having to draw upon a limited staffing pool in the sector.
In particular, he identifies the growth in the number of boutique managers as a main contributor to the phenomenon.
On the whole, Sheehan believes the high staff turnover levels are reflective of a buoyant employment environment for investment professionals.
