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Investors warned off Macquarie-owned Brook Asset management

Monday 31st May 2010

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Investors are being warned to steer clear of two Brook Asset Management funds after one of the firm's founders lured away fund managers to his new investment vehicle.

Morningstar has put Brook's Alpha and Tasman strategies on ‘avoid' after Paul Glass, who founded Brook 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 Brook 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 is available to investors which we think will more than meet their needs."

Glass returned from gardening leave in March, buying Goldman Sachs JBWere Asset Management, 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."

 



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