Souls Funds Management chief investment officer Frank Villante has withdrawn his resignation from the firm after Treasury Group reached an agreement to acquire the firm.

Villante said the withdrawal of his resignation was accepted yesterday morning.

"I have given some consideration as to who the party who is acquiring the shareholding is and I'm comfortable to have a working relationship with them," Villante told InvestorDaily.

Souls Funds Management operates three Australian equities funds and is well known for its investment in small companies.

"Treasury Group have a little bit more experience at managing and being involved in managing assets of this nature than was the case with the previous major shareholder, who has also lots of strengths, but it's not their core area of focus," Villante said.

"For Treasury Group the only thing they do is this business. That is kind of appealing," he said.

Souls senior analyst Andreas Stephens has also withdrawn his resignation, Villante said.

Treasury Group will disclose further details of the acquisition at its annual general meeting for shareholders today.

Souls' funds were put on hold by ratings agencies Standard & Poor's and Morningstar after Villante announced his resignation.

Morningstar said Villante's withdrawal was positive for shareholders.

"We tentatively view this as a positive development and will be sitting down with Souls to discuss the changes in the coming weeks," Morningstar fund analysis manager Chris Douglas said.

"Clearly we need to get comfortable with the new ownership structure and what it means going forward."

Standard & Poor's said it would not change its on hold rating following the sale of Souls to Treasury, but it would review the team once the acquistion has been finalised.

S&P said the new ownership structure gives Souls more autonomy, as well as the opportunity for senior managers to have greater equity ownership in the business.

Equity ownership is fundamentally a way for firms to ensure their most talented fund managers stay on board, the research house said.