Forum Archive Index - October 2000

["Malcolm Eves" <malcolm@easternasset.co.nz>]

Peter,

It may be a good idea for you spend some time talking to fund managers before making too many assumptions. Many are very active in making regular company visits and talking business issues through with the company management, but quite properly leave the running of the business to the management. However they make the calls about how long the association / investment is to last and will exit from the register if they think that management does not look to be taking care of issues that concern them. e.g. why did Armstrong Jones exit IT Capital ( for a significant profit )? - because they felt that the Singapore connection meant that the company  would lose it's focus and that management become answerable to an influence they wouldn't understand as closely as before. That is the fund mangers job, to make a return for the fund and for the funds investors (as you appear to expect), not to fix up the company because it is getting into difficulty, or make it accountable to shareholders. After all they are usually individually only a small minority on a company register and due to competition with other managers to attract funds will not work in collusion to "save" a company from incompetence.

Also, have you taken time to notice how well active fund managers in the NZ market have performed lately? Most are showing significant outperformance over the NZSE 40 index and have proven their worth in a very difficult market.

----- Original Message -----

From: P Maiden

To: sharechat@sharechat.co.nz

Sent: Thursday, October 19, 2000 7:27 AM

Subject: Re: [sharechat] FFS shareholders

.......and may they grow into large pines.

 

I do not have a direct interest interest in FFS but no doubt my 'voluntary' contributions to a super scheme are affected. However an interested observer.

 

The recent FFS events have been a fiasco. Posts to this forum have blamed many.

 

One group who seemed to have been left off the list are the institutional fund managers. I haven't got a FFS annual report so I don't know who the big investors are.

 

One of the main reasons that many NZ companies have destroyed billions of shareholder value over the past decade or so is that these fund managers have 'passively' sat on the sidelines and not made any of the (poor performing) companies they invest in accountable for their performance.

 

Most fund managers (whether passive or active) do not appear to take the value of any company they invest into account. As long as their own performance is slightly better than benchmarks and other funds they seem happy. Keep to the mainstream and mirror other funds - don't get too far out of step as to expose yourselve to others winning when you are not on the bandwagon seems to be their motto.

 

We have heard little what these big investors think about FFS - or what they are going to do about the rights issue. These fund managers appear to forget that is not their money they are investing - but a lot of many indivdual's life savings.

 

I wonder what these managers are doing - trying to get some value back into their FFS investment? smile and pay up when the money is due at rights time?  expressing their disgust or whatever (on behalf of their own investors) to the FLC board.

 

The impact goes beyond all you small/big  investors out there.

 

Ironically I think a lot of the recent investmnet in FFS also came from the windfall from FLP.

 

 

Peter