UBS property funds ‘on hold’ as head goes to CFS

Melbourne-based research house Lonsec has placed the UBS Property Securities Fund on hold, following the exit of UBS property head John Snowden to Colonial First State (CFS).

Commonwealth Bank-owned CFS announced on the weekend that Snowden, UBS’ head of real estate and global real estate securities for Australia, New Zealand and Asia, had been appointed as its new head of property securities.

Snowden, who will join CFS in mid-February, replaces Stephen Hayes, who joined Perennial Real Estate Investments, a new foray into listed property, earlier this month.

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

The walkout by the global listed property team follows CFS Global Asset Management’s restructure in October 2005, which brought the firm’s direct property, infrastructure and private equity businesses under one roof.

The loss of CFS’s entire property securities team attracted ‘hold’ and ‘fund watch’ ratings from research houses Lonsec and Standard & Poor’s (S&P), as well as an ‘avoid’ rating from Morningstar, its lowest rating.

Lonsec regards Snowden as one of the top property securities managers in Australia, the UBS Property Securities Fund being Lonsec’s top pick in this sector.

A Lonsec media release today said it was “impressed with the calibre” of Snowden’s appointment, who managed the UBS Property Securities Fund since his arrival from JP Morgan in May 1998.

The researcher described the appointment as an “indication of CFS’s commitment to the ongoing successful management of their property securities products”.

Lonsec believes Snowden’s move has “major ramifications, most notably for UBS’ Property Securities Fund, due to his instrumental role in its development, operation and continued success”.

It said it has been “informed” that other members of the UBS property securities team, Andrew Nicolas and Miranda Moran, will be remaining at UBS at this stage.

UBS has informed Lonsec that the experienced Andrew McGrath, part of UBS’ Australian Equities team, will most likely take responsibility for the UBS Property Securities Fund.

McGrath assisted Snowden with the management of the Property Securities Fund prior to the introduction of UBS’ Real Estate business (Australia, New Zealand and Asia) in 2005.

“McGrath therefore has considerable experience with Snowden’s approach to managing property securities and appears a capable replacement,” the Lonsec statement said.

Lonsec will meet with CFS and their new head of property securities to discuss the fund’s future direction as soon as Snowden has commenced his new role.

Antoinette Plater and Jewel Bennett have taken interim responsibility for the CFS global and domestic property securities funds respectively since the departure of Hayes, overseen by chief investment officer David Dixon.

Plater is thought likely to continue with CFS, assisting Snowden with CFS’s global property product, while Bennett will resume her role within CFS’s Australian Equities Core team once Snowden has commenced his new role.