UBS property back in business

Research house Lonsec has taken the UBS Property Securities Fund (PSF) off ‘fund watch’ and reinstated its previous rating of ‘highly recommended’ following the appointment of Andrew McGrath as the head of the UBS PSF investment team.

Lonsec put the fund ‘on hold’ last week after its former head, John Snowden, left to head up Colonial First State’s property securities team, which was left without a single staff member in January when the whole team defected to Perennial.

McGrath steps into the UBS role having already spent four years assisting Snowden to run the PSF. More recently he has been responsible for analysing listed property trust stocks as part of the UBS Australian equities team.

“He has been involved, knows the process and has seen the process develop under John [Snowden]. Four years of experience with him [Snowden] running that fund through the period when the fund was most successful is pretty good grounding,” Lonsec senior investment analyst Pete Morrissey said.

“Internally he is the best candidate they could have put forward. They could have gone to an external candidate, but who knows how long that would have taken and at least now there’s a quick and seamless transfer to a new manager that, while he hasn’t had ultimate responsibility, has had a long period of experience with the process under John Snowden,” Morrissey added.

He feels the fund manager did not warrant a rating downgrade due to the process UBS will continue to implement in running the fund along with the manager’s commitment to the property space.

“UBS across the globe are building up their real estate capabilities so I think they’re committed to the asset class so they won’t want to see the fund do poorly. They would like to continue the emphasis put into the fund,” Morrissey said.

Lonsec will conduct its annual review of the fund in the second quarter of 2006 to reassess the operations of the PSF.

Morrissey expects other research houses to also re-evaluate their current ratings of the fund.