Changes to Perennial Investments’ real-estate investment team have prompted managed-funds research firm Zenith Investment Partners to place Perennial’s Australian and global property funds under review.
An “under review” flag means the research firm needs further details of the substance of the changes and the likely effect they will have on the manager’s investment process, and hence performance.
The research firm says investors in a fund under review should not invest additional money into it, but there is no need to withdraw. Funds generally do not remain under review for long and Zenith says it is confident of being able to issue a definitive rating for each of the Perennial funds in the coming weeks.
The funds affected are the Perennial Hedged Global Property Wholesale Trust, Unhedged Global Property Wholesale Trust and Australian Property Wholesale Trust.
Where you lead, I will follow
In February, managing director and head of Perennial Real Estate Investments, Stephen Hayes, resigned. He was a founder and equity partner in the real estate business and originally joined Perennial from Colonial First State Global Asset Management (CFSGAM).
Perennial appointed David Kivell as managing director and head of Perennial Real Estate Investments to replace Hayes.
Hayes announced in August that he was joining CFSGAM as head of property securities, replacing Andrew Nicholas. A number of CFSGAM staff subsequently departed.
In September, a senior Perennial portfolio manager, Stuart Pearce, also quit the manager’s real estate team. This week Colonial announced that three other members of the Perennial team will be joining Hayes at CFSGAM: Tuan Pham (regional head, Asia Pacific, and a portfolio manager of Perennial’s Australian REIT fund), Boudewijn van Loen (regional head, Europe) and Joseph Daguio (dealer and analyst).
CFSGAM has also appointed a former property-securities portfolio manager for CBRE Investors, Daniela Lungu, as a senior portfolio manager.
Brian Thomas, head of retail funds for Perennial, says the performance of the funds in question has improved since the beginning of this year, when the management changes began.
“Given the quality of the people that David is already talking to to come on board, and the improvement in the performance that we have seen since David started in January, we are very excited about moving on from here,” Thomas says.
He adds that Perennial is “very close” to several new hirings.
“You can’t make announcements until people have signed on the dotted line, but there are three appointments that we are close to bringing on board,” Thomas says.
Zenith says it is concerned by the staff departures from Perennial, and by the changes to a team at CFSGAM that it considered to be strong, prompting it also to place an under-review flag on the CFS Wholesale Colliers Global Property Securities Fund.
“Zenith intends to meet with David Kivell and any incoming senior investment staff to ascertain more details surrounding the departures and procedure going forward,” it said.
Of CFSGAM, Zenith said: “Given both the breadth and significance of the changes implemented by Hayes… Zenith will seek to meet with both Hayes and the broader investment team to get a better understanding of the possible benefits of such a significant restructure.”