Colonial First State (CFS) has terminated Maple-Brown Abbott as a manager in its FirstChoice Australian Share multi-manager fund and awarded the $960 million mandate to Tyndall Investment Management's Australian share strategy.
"It has been a one-for-one change," CFS head of investment services Scott Tully told Investor Weekly.
"We had been looking at them for quite some time and with the acquisition by Nikko Asset Management it has given them a good base. All those uncertainties are resolved."
He said he particularly liked Tyndall's broad approach to the investment universe.
"They are not dogmatic about where they invest; they will include resources and small-cap stocks, so we think they are well-positioned," he said.
"It has been quite a big change, because Maple-Brown Abbott has been in the portfolio since 2002, but we decided we needed to make a change and appointed Tyndall."
He also said he changed the allocation to CFS's core strategy and split it into two, allocating half of the mandate to the CFS long/short strategy.
"Colonial First State core were managing 15 per cent of the portfolio and we have allocated half of that to their long/short strategy," he said.
"We thought it was a good opportunity to get a long/short manager in the portfolio."
Tyndall managing director Craig Hobart said the takeover by Nikko Asset Management in November last year had given the firm a solid base to expand its business.
"We are now the third largest independent investment manager in Australia and we are in the mix for a few mandates," Hobart said.
The FirstChoice Australian share portfolio stood at $4.8 billion in funds under management at the end of July 2011, of which Tyndall now manages 20 per cent, CFS core 7.5 per cent and CFS long/short also 7.5 per cent.
Other managers include CFS growth with 5 per cent, Schroder Investment Management with 20 per cent, Perennial Growth Management with 20 per cent and Perennial Value Management with 20 per cent.
According to Morningstar data, the FirstChoice Wholesale Australian Share Fund had been a second quartile performer over the past three and five years.
But performance over the one-year period to 31 July 2011 slipped to fourth quartile relative to the peer group of Australian large-cap blend funds.
