Research house Standard & Poor’s (S&P) Fund Services said it won’t change its sell rating on Colonial First State’s (CFS) 452 Australian Shares and 452 Geared Australian Shares strategies.
This comes despite CFS’s decision to replace 452 Capital with Integrity Investment Management as the underlying manager of the 452 Australian Shares strategy, while CFS Global Asset Management Core will manage the geared fund.
“Basically, there are going to be costs associated with the transition and the process has got to be managed by a transition manager,” S&P fund analyst Peter Ward said.
“We will review the funds following the completion of the transition.”
Morningstar will leave the 452 Australian Shares strategy on hold until the transition is completed and the special distribution is finalised, Morningstar’s co-head of fund research Chris Douglas said.
“We put the 452 Capital Australian Shares strategy on hold and told clients not to add any new money given the uncertainty,” he said.
“Now that CFS, as responsible entity for the funds, has acted on the uncertainty, we see the proposed changes as a good outcome for unitholders in the various 452 funds given the circumstances.
“Despite the positive developments, there are some costs involved in the transition and a one-off special distribution – details of which will be announced in the near future.
“We will be leaving this strategy on hold until the transition process is completed and special distribution finalised.”
Integrity has a Morningstar recommendation of highly recommended.
S&P has a four-star rating on Integrity.
CFS, the responsible entity of around $1.5 billion of 452 Capital’s $3 billion in funds under management, on Friday replaced 452 Capital with other managers including Integrity Investment Management and CFSGAM Core.
The move followed 452 Capital’s announcement that its management team of chief executive Lyndsey Hancock and investment directors Mary Feros and Suellen Morgan would step down after an agreed period of time.
The boutique’s board also said it was holding discussions with management and major shareholders about options regarding the future of 452 Capital.
