Brook downgrade after Botherway/Glass exit

Leading local fund manager Brook Asset Management has been given a ratings downgrade after the departure of its co-founders Simon Botherway and Paul Glass.

Funds rating company Morningstar says that the two men leaving Brook has lead to a "reassessment of its recommendations".

Morningstar senior research manager Chris Douglas, in a newsletter distributed this week said that it had put Brook's 'Alpha' strategy on 'hold'.

"The Alpha strategy was managed by Paul Glass for over 10 years, and is a high-octane approach with 10 - 25 holdings. Alpha is a strategy that Glass designed and implemented, and we believe investors should hold off from investing new money until the strategy's future is more clear," said Douglas.

Morningstar has also downgraded Brook's 'Tasman' strategy from 'recommended' status to 'investment grade'.

"The losses of Botherway and Glass - two clearly influential portfolio managers - will have a profound impact on the shop. Brook has indicated that it will announce a new investment hire in the near future, and that Glass will remain at the firm until December."

"Tasman remains an appropriate solution for Australasian equities exposure, given the quality of the three remaining senior team members," said Douglas. "But we need to be able to assess how Brook copes with the full impact of the departures of Botherway and Glass and evaluate the new hire before giving our unqualified backing."

Brook Asset Management officially announced the departure of fund managers and former owners Simon Botherway and Paul Glass late last week.

The pair had been widely expected to move on after they stepped down as directors in July following the sale of the rest of the business to Macquarie Bank in February.

They will finish up at the end of the year, although Chris Gaskin has been managing Botherway's portfolios since July when he left to go on a sabbatical. Brook Managing director Mark Brighouse said Botherway and Glass would be pursuing their own interests outside the funds management industry. Glass would not comment on what he or Botherway would be doing in the new year.

Brook has more than $1 billion in assets under management, including money it manages on behalf of the New Zealand Superannuation fund.


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