CFS property rebuilds with UBS bricks

Research house Morningstar has not lifted its ‘avoid’ rating on Colonial First States’ (CFS) global property securities fund, despite the Commonwealth Bank-owned fund manager appointing two more former UBS analysts to fill the hole left by the departure of its entire team of six to Perennial.

Former UBS property researchers Andrew Nicholas and Miranda Moran this week followed in the footsteps of former boss at UBS John Snowden, who joined CFS to head up their listed property funds operation in February.

Snowden went to CFS to replace Stephen Hayes, who ended an eight-year stint at CFS to head up IOOF-owned Perennial’s new foray into listed property, taking his whole team with him.

A spokesperson for Morningstar said they were currently in discussions with the CFS team and would lift the ‘avoid’ rating if it deemed the new team capable of running the fund well.

“Clearly the strategy is going to be different and we need to assess how and what we think of it. We’re not at a firm grasp yet, but we’ll be looking into it,” said Morningstar head of research Justin Walsh.

“[the two new appointments] will help but it doesn’t solve the puzzle just yet. There were five in the original team and now there’s still just three, and the previous five were all hand picked by Stephen Hayes.

Andrew McGrath is still in charge of the UBS property team, which had its ‘highly recommended’ rating reinstated by Lonsec from a ‘fund watch’ rating applied after Snowden’s departure.

At CFS, Nicholas becomes a senior portfolio manager, while Moran becomes a property investment analyst.

CFS listed property funds still have a ‘fund watch’ rating from Lonsec and an ‘on hold’ rating from Standard & Poor’s.