Onwards and upwards

Control of Assirt Research has changed hands a few times over its 18-year history, with the Sydney-based company picking up an ever growing product offering along the way.

Assirt Research started as a research house within Sealcorp back in 1986. It stayed there until September 2000 when the firm teamed up with Bourse Data and Hot Copper to form their own research group, Wealthpoint — only for the new company to be disbanded after Assirt was absorbed back into Sealcorp in October 2002. In July last year the research house was brought under the control of Sealcorp parent company St George.

This last move led to some upheaval in the research house’s management with then head, Caroline Saunders, walking away from the position because she felt the group was better aligned with Sealcorp rather than St George.

After former head of sales Rebecca Jacques took on a brief stint at the helm as interim head, Saunders was replaced as head of Assirt by Simon Ibbetson in August 2003. The group has since promised that coming under the bank’s control would not change its rating process.

In its early days, Assirt’s offering was limited to fund manager performance data. It wasn’t until 1994 that it started to produce ratings. Ten years on the research house has a stack of products on offer.

Each year the group publishes four quarterly market share reports and an adviser services level survey. The 500-page market share report details the distribution strength of fund managers, gauging where they are successful and attempts to project the size of the managed investment market. An annual subscription is just over $2,000 in hard copy while a one-off for a non-subscriber costs around $800.

But the majority of Assirt’s services can be accessed through its web site. Subscribers can view rating reports on over 1,000 managed funds, fund managers, research bulletins, managed fund profiles, as well as sector reports and a monthly portfolio monitor.

According to business development manager Mark Hyde what makes Assirt’s offering stand out is the depth and breadth of its coverage.

Assirt extends its research coverage through the fund manager down to the managed fund — something that Hyde says only one of their research counterparts does.

“You can actually drill down and have a look at the actual product structure and compare it relative to other similar funds from an asset management perspective.”

Managed fund data is received via straight through processing, which Hyde says “brings the fund manager to us”.

This greater level of coverage and access comes at a price, with a yearly subscription to the Assirt web site costing $6,600.

Like all the other research houses featured in Money Management’s Rating the Raters survey last March, Assirt came under some tough scrutiny from fund managers. Particularly because Assirt still charges fund managers to be rated.

Hyde says charging fees is all about cost recovery.

“It takes an awful long time to rate a large multi-blend fund manager. Without charging them we just wouldn’t be able to offer a service of adequate quality.”

Hyde says all fund managers which are rated by Assirt have to sign a contract allowing ratings to be published regardless of whether the fund manager is happy or not.

Besides, he says, accurately rating the fund managers is critical to the survival of the business given the huge amount of revenue generated by advisers subscribing to the Assirt web site. Over-rating a particular fund manager could result in advisers getting poorer investment returns than expected for their clients, causing them to reject Assirt’s research.

The survey also showed that fund managers were less than impressed with many of the research house’s ability to meet review delivery targets. However, Hyde is defiant.

“We’re pretty confident of the high standard of our turnaround time. We can actually rate a sector within four to six weeks.”

He says that a rating deadline is embedded in every contract to ensure timely delivery of data.

Hyde adds that because sector reviews are conducted in an ongoing fashion, newcomers will be added as soon as is deemed appropriate as opposed to having to wait for the right time in a rating cycle.

“We can pick up a new fund manager faster than the other research houses.”

A recent example Hyde gives is emerging boutique MIR to which Assirt gave a four-star rating not long after it was established.

In the future, he says, Assirt will continue to offer subscribers greater detail in managed fund analysis, placing renewed effort on providing absolute returns on alternative products.