Hatfield departure fuels tentative recommendation by research house

ColonialFirst State’s (CFS) hedge fund of fund product has been removed from the recommended list byInvestorWeb Researchin its latest review of the sector, following the recent departure of hedge fund chief Damien Hatfield.

Meanwhile, four hedge fund managers —Basis Capital,BT/Grosvenor,PlatinumandPM Capital— were left unchanged on the research houses ‘recommended’ list.

Despite Colonial being taken off the recommended list, InvestorWeb maintained its ‘buy’ rating for the manager.

“While Hatfield’s replacement, David Bell, should fill the role well, we would like to assess how well the new team structure operates before reassigning it to our recommended list,” InvestorWeb says.

The products recommended by InvestorWeb were Basis Capital (other strategy), BT/Grosvenor (fund of funds), Platinum (long/short equities), and PM Capital for its Absolute Performance Fund and Australian Opportunities Fund (both long/short equities).

Basis Capital, which received InvestorWeb’s Hedge Fund of the Year award for 2003, has generated double-digit returns with volatility under five per cent per annum.

While PM Capital’s and Platinum’s funds are more analogous to traditional equity products than hedge funds, InvestorWeb claims both managers’ ability to short sell equities differentiates the products and consequently they were rated as part of the hedge fund review.

BT’s hedge fund of funds product is considered high quality, given the depth of personnel and rigorous manager selection process employed.