Morningstar puts ‘avoid’ rating on 2 Brook funds

Morningstar puts ‘avoid’ rating on 2 Brook Asset funds after managers poached

By Paul McBeth

May 31 (BusinessWire) – Morningstar put an ‘avoid’ rating on two Brook Asset Management funds after one of the firm’s founders lured away fund managers to his new investment vehicle.

Morningstar put the rating on Brook’s Alpha and Tasman fund strategies after Paul Glass, who founded Brooke with Simon Botherway and later sold the company to Australia’s Macquarie Group in 2007, poached Mel Firmin, Chris Gaskin and Slade Robertson to join his new firm, Devon Funds Management.

The research group said the remaining analysts in the Tasman fund were “capable and experienced” but lack portfolio management and are a clear risk of leaving Brooke as well.

“Brook Tasman has been one of our premier trans-Tasman options, so the departures are a major disappointment,” Morningstar said in a report. Investors in Brook Alpha and Tasman have done very well over the years. But a host of other options are available to investors which we think will more than meet their needs.”

A spokesman for Brooke wasn’t immediately available to comment. Glass returned from gardening leave earlier this year, buying Goldman Sachs JBWere Asset Management (NZ) Ltd. in March, and flagging his intention to have the biggest investment team in the country.

Firmin was Brook’s executive director, while Gaskin and Robertson managed the Tasman and Alpha funds respectively.

Morningstar said without Robertson at the helm of the Alpha fund, which is a high-risk, high-return investment, it has “real questions about Alpha’s viability as an ongoing vehicle.”

(BusinessWire)

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