Manager Research

The Nedgroup Investments Property fund was initially rated as a Tier 1 offering in June 2014. This positive rating was predicated upon an experienced portfolio manager implementing a differentiated strategy in a simple and largely homogenous sector. This strategy was supported by a business for which this was seen as the best representation of their philosophy.

The fund was downgraded to Tier 2 in mid-2019. This meant that we remained of the opinion that the fund was a good option but that investors needed to be aware of some concerns with the fund. Specifically, we underestimated the extent to which the fund’s philosophy had impeded its ability to deliver returns in a risk cognisant way (as we had identified with the remainder of the Bridge funds). In addition, concerns around research depth reduced our confidence level in the manager’s ability to add value in future.

As previously discussed, where we had identified potential issues in early 2018 and investigated each, we did not see the need to change our outlook and rating.  In retrospect this was an error and we should have moved to Tier 2 in early 2018.

After re-engaging with Bridge on numerous occasions in the past 6-months to monitor the concerns we had identified, we have unfortunately resolved to downgrade the fund from Tier 2 to Tier 3.  The additional concerns relate to:

• The manager’s ability to manage their portfolio according to the stated investment strategy, given how liquidity in their underlying investable universe has declined.  


• The manner in which the manager can protect clients from liquidity-based risks, given the concentrated nature of holdings. 


• The potential for the fund to change in its approach, given these issues. 

In simple terms, we cannot at this point positively recommend the fund to investors, given these risks.

We do hope to continue our engagement on the fund and will be monitoring its progress over the coming weeks and months as we work through a difficult time for property shares.