CFS loses entire listed property team to Perennial

Research houses are urging investor caution after yesterday’s shock announcement by Colonial First State (CFS) that it had lost its entire listed property team.

CFS head of property securities Stephen Hayes ended an eight year stint at the Commonwealth Bank-owned fund manager last Friday when he left to prepare to head up Perennial’s new foray into listed property.

And in a major coup for Perennial, the remaining five members of CFS’s property have followed Hayes to the IOOF-owned fund manager.

CFS’s domestic and international listed property funds will now be managed by other divisions of the company including the Australian equities team and its chief investment officer until replacements for Hayes and his team can be found.

“We are confident the funds will continue to be managed effectively under this interim arrangement and we have initiated the recruitment process for a new leader for this business,” CFS said in a statement released to its staff yesterday.

Melbourne-based research house Lonsec said the departures had “major ramifications”.

“CFS’s property funds are somewhat rudderless until a permanent arrangement for their management is put in place.”

It did note, however, that CFS’s Australian equities team has previous listed property experience and that the global securities fund would still be managed in conjunction with Collier’s International.

Standard and Poor’s has placed the funds ‘on hold’ pending further investigation.

A spokesperson for Morningstar said a rating update for both the CFS local and global listed property funds would be published either later today or tomorrow morning.

Perennial’s new listed property division will operate as a separate boutique-style business and will manage both local and global property securities.