S&P downgrades Perpetual Wholesale Concentrated Equity Fund


Standard & Poor’s Fund Services has removed from ‘On Hold’ and lowered to four stars from five stars its rating on the Perpetual Wholesale Concentrated Equity fund (CEF). We placed the fund ‘On Hold’ following Perpetual’s announcement that portfolio manager and head of equities, John Sevior, planned to take a six-month leave of absence from the start of July. Mr Sevior has managed the CEF since its inception in 1999. In light of his absence, Paul Skamvougeras, portfolio manager of Perpetual’s long/short Australian-equities fund, will manage the CEF.

“We have removed the fund from ‘On Hold’ and downgraded it based on the lack of certainty that Mr Sevior will resume managing the portfolio and our lower level of conviction in Mr Skamvougeras as manager of the fund,” said S&P Fund Services analyst Tom Mills.

Mr Mills added: “While we acknowledge that Mr Sevior may resume management of the fund in January 2012, we note that Perpetual has not ruled out Mr Skamvougeras continuing to manage the fund beyond this date. Although we consider Mr Skamvougeras to be a very capable investor, we note that his portfolio management experience to date has been in long/short strategies with far lower levels of funds under management (FUM).”

Since Mr Skamvougeras began managing the CEF, its size has been significantly reduced as a result of some redemptions, and largely by institutional clients reallocating their investments to other Perpetual strategies. As a result, Mr Skamvougeras will be in charge of a more manageable level of FUM, which provides us with greater comfort in the fund in his hands and over its capacity in general.

“Despite our lowered conviction in the CEF, we remain comfortable with Perpetual’s well-proven process, and the breadth and depth of its large and experienced team, which has significant input into portfolio composition,” concluded Mr Mills.

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