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Fisher Fund's flagship investment product, the NZ Growth fund, has been downgraded from highly recommended to recommended by international ratings firm Morningstar.
Morningstar head of research Anthony Serhan said the firm still had confidence in the fund's manager Carmel Fisher but it was no longer the "stand-out pick" for investors wanting exposure to small-to-medium listed businesses in New Zealand.
The Morningstar recommendation is a fall from its last report on the sector in 2006 when Fisher Funds topped a New Zealand equities sector report on five companies.
Serhan said the decision to downgrade the company was based on its relative position to other investment managers as well as the recent staff change in the departure of chief investment officer Warren Couillault.
Couillault, who had been at Fisher Funds for five years, left the company in February after stepping down as a director on the board. He sold his 27 per cent stake in the business to Carmel and Hugh Fisher. The Morningstar report describes the Couillault loss as a blow to the company. He has since been replaced by Murray Brown, who joined the firm as a senior analyst.
Serhan said the recommendation downgrade was also driven by concerns about the level of assets under management by the company under the one investment strategy.
"We are confident they can manage it. But they are at the high end of those assets. Every manager has a capacity level at which it makes it harder to employ their style of investing."
Fisher Funds invests around $400 million in small and medium New Zealand companies across several of its portfolios, of which $154 million sits in the NZ Growth fund.
Last week the New Zealand Superannuation Fund announced it had ended its relationship with Fisher Funds and would be taking the management of the small to mid-cap portfolio in-house.
Fisher Funds managed around $150 million on behalf of the fund.
Serhan said a report due to be released in the next few weeks would reveal who it believed was now top of the sector.
