Advance Asset Management said it has begun conducting a formal review of the underlying fund manager within its Concentrated Australian Share Fund, MIR Investment Management.
Advance is a member of the BT Financial Group (BTFG), the wealth management arm of Westpac, Australia’s second-biggest bank by market value.
The review follows research house Standard & Poor’s (S&P) move to put the fund on hold after MIR’s decision to restructure its investment team and process.
“Advance continually assesses the appropriateness of the underlying managers within its funds based on a wide range of criteria, including performance and external ratings,” a BTFG spokesperson said.
“As a result of the key changes to the qualitative team and process, a formal review of the manager is currently being conducted.”
The Advance Concentrated Australian Share Fund lost 8.10 per cent per annum in the three years to November 2009, compared to the S&P/ASX 200 Accumulation Index’s 0.7 per cent annualised decline in the same period.
Earlier in the week, S&P said that following a period of disappointing performance MIR reviewed its investment process and decided to restructure its qualitative research approach.
“Changes include a smaller Australian qualitative analyst team, resulting in the departure of two of its members including Derek Ovington, the team’s former head,” S&P said.
MIR’s Australian qualitative team will consist of Phil Hudak and a second analyst who is yet to be recruited, S&P said.
“MIR believes that this restructure will lead to an improved investment process, however S&P has some concerns over the impact of these changes, including the effect on team continuity and stability,” S&P said.
S&P said it would meet MIR in February 2010 as part of its Australian equities large-cap sector review, when a thorough evaluation of the investment capability and the restructured qualitative investment approach will be undertaken.
MIR had approximately $4 billion in assets under management as at 30 June 2009. MIR did not return requests for comment by deadline.
