Deutsche global fund hit with hold rating

Three years of uncertainty at the Deutsche Asset Management (DeAM) international equities division has come to a head, with Assirt Research placing its Global Select Fund 'on hold' following the recent departure of the senior portfolio manager.

Stephen Barrow resigned from the manager in late 2004 after 15 years with DeAM, leaving the less experienced Charles Martyn-Hemphill at the helm of the London-based Global Select team, which picks the 40 'best ideas' from DeAM's worldwide analyst pool for the fund.

An Assirt analyst said Martyn-Hemphill had just two other analysts working with him on Global Select at the moment, and even this pair were dividing their time between other sector responsibilities.

"The team is very small and Barrow's departure is critical," the analyst said.

DeAM has had a torrid time with its global equity teams. The enhanced international equity team it inherited after its purchase of BT was withdrawn after poor performance, while the 'thematic' team it bought from Scudder Investments stayed less than a year before decamping to Lazard Asset Management in late 2003.

The Global Select fund was instituted shortly afterwards, in what the Assirt analyst viewed as DeAM's "final attempt" to convince investors of its global equity credentials.

"[DeAM's international equity offering] has had such significant changes in the past three years, it gets to the point where you question how many more things it can try before investors lose all confidence."

Assirt is awaiting further information from DeAM about the future of Global Select, but the analyst expressed "little confidence that this team will continue successfully".

The fund is understood to only have Australian investors, with the retail component amounting to just under $11 million.

DeAM was unavailable for comment as Money Management went to press.