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(August-2001) BT gets much needed ratings boost
BT Funds Management’s hiring of Marcus Fanning has earned it brownie points from van Eyk Research, which has given the fund manager’s beleaguered Australian equities capabilities a much needed ratings boost.
The ratings promotion lifts BT from a ‘Hold’ to a ‘B’ in van Eyk’s reckoning, but still leaves it well outside the top group of domestic equities managers in Australia.
Fanning joined BT from AMP to replace Rohan Headley as head of Australian equities in May, but has already overseen the introduction of a number of measures to tighten portfolio construction and risk management, including placing hard limits on stock liquidity and the size of stock and sector bets.
The changes have resulted in BT reversing its previous over-exposure to the telecommunications sector and under-exposure to the banks, with the group’s underweight position to the banking sector falling to 3.5 per cent compared to 20 per cent at the beginning of the year.
But, according to van Eyk, the steps taken so far by BT place it only on an even keel with the rest of the funds management industry, with BT yet to prove its ability to add significant value under the new regime.
“We fully believe that BT is enthusiastic about its new direction,” van Eyk managing director Stephen van Eyk says.
“But you have to be careful because there are other managers that already have the runs and the process on the board, and we will have to wait and see if BT over time can come out in front of them.”
Van Eyk will be reappraising BT, along with 30 other Australian equities managers, over the next two months, but doesn’t expect BT’s new investment process to be fully bedded down for another six months.
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