Van Eyk queries new BT head

The influentialvan Eykresearch group has reinforced its existing recommendation that advisers consider pulling clients with medium-term outlooks out ofBTfunds, following the appointment of Crispin Murray as BT’s new head of Australian equities.

In a statement to its subscribers, van Eyk said Murray’s appointment was “yet another strange twist of fate in the BT/Sagitta/Westpacsaga”.

BT announced last week that Murray would take over as the group’s head of Australian equities following news that Sagitta’s Andrew Brown, who held the role since the merger of BT and Sagitta by their parent Westpac, would leave the combined group.

The nature of Brown’s departure is still a matter of dispute between Brown and BT.

The van Eyk group says Murray, formerly BT’s head of European equities and the combined BT/Sagitta/Westpac group’s head of equity research, has an impressive record in international equities and fixed interest.

But the research house expressed a level of doubt over Murray’s lack of experience in the Australian equities asset class.

“The most worrying aspect of Crispin Murray’s ability to [start adding values in portfolios] in the short-term will be his apparent lack of experience in Australian equity analysis. It will be hard to restructure portfolios with a view to making an immediate impact on performance, without a thorough knowledge of those companies,” van Eyk says.

The research house adds that its current B rating of Sagitta, which makes up the majority of the combined group’s funds management capabilities, was “based largely on a lack of confidence that they would be able to add value over the next two years”.

Van Eyk says Sagitta would be hampered by its ongoing integration with Westpac and BT, its apparent lack of team cohesiveness following the Westpac buyout and question marks over its philosophy and process.

“We continue to believe that our B rating is appropriate, and advisers should consider shifting those clients with medium-term outlooks out of BT Funds into more highly-rated managers on review,” the van Eyk research group says.

However, theLonsecresearch group has delivered a more upbeat assessment of Murray’s appointment, although it too has kept its existing “Redeem” rating on BT’s Australian equities funds, and continues to keep all of Sagitta’s Australian equity funds off its recommended list.

Lonsec says while Murray has a lack of direct Australian equity portfolio management experience, the underperformance of Sagitta funds under Brown was of greater concern.

“The underperformance of the former [Sagitta] Australian equities portfolios had been so poor recently, without any major mitigating circumstances, that a change of portfolio management appears prudent,” Lonsec says.

“Lonsec actually sees an initial benefit in having a review of the portfolio from a relatively unbiased viewpoint with few preconceptions,” the research group adds.