Challenger small caps ‘on hold’ as Ring departs
Standard & Poor’s has placed four Challenger small and micro cap funds ‘on hold’ following the resignation of senior portfolio manager James Ring.
Standard & Poor’s fund analyst Kenneth Ostergaard said the company’s three small cap products — Challenger Smaller Companies, Challenger Smaller Companies Fund, and Challenger Smaller Companies Wholesale — had previously been rated ‘four stars’.
“That rating was really carried by James Ring and based on his experience. We commented quite positively on him in our sector report [in November 2005],” Ostergaard said.
Ring, who established the fund manager’s small cap investment process and has been with the company for more than six years, will be leaving in May. His second-in-command Michael Courtney will be promoted to take over as lead portfolio manager.
Courtney joined the Challenger Australian Equities team in 2003 as a smaller companies analyst, bringing 10 years investment experience to the role. Prior to joining Challenger, he was a smaller companies analyst at ING.
Ostergaard said Courtney is currently responsible for the newer Challenger MicroCap Fund, previously rated ‘three stars’, which the researcher understands operates with a slightly different process from the small cap funds.
Ostergaard said all four funds had been placed ‘on hold’ because of uncertainty about what would happen when Courtney takes over from Ring in May.
“We have sought a meeting as soon as possible with Michael Courtney to clarify just how things are going to be run going forward and, basically, as soon as we know that we will take any necessary ratings action if we feel that that’s appropriate,” he said.
Morningstar head of research Justin Walsh said Morningstar had not yet made any changes to its ratings of the funds and did not intend to review its ratings until after meeting with Courtney in the next few weeks.
“We’re certainly fairly comfortable with Michael. Having said that we do agree that the loss of James is a big loss. He was very central to the fund and, while Michael has had the experience of working with him for a couple of years, that’s good, it does raise concerns.
“The other point is that the strategy is closed to new money … if this was a live strategy and taking money, we would possibly have a different view,” Walsh said.
Recommended for you
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
