Manager Research
all members of our manager research team have over ten years of investment experience.
We have sent out various updates over the past year on Cadiz and the significant business issues that they have been facing. There have been significant changes in shareholding and the business over the past year. The latest changes have been the outsourcing of the back office which has materially reduced the staff headcount and the fairly recent purchase of the Blackstar stake by Stellar, a JSE-listed investment holding company.
Our main concern over the last year regarding the Cadiz Absolute Yield fund has been around the team. We rate the team very highly and believe that they run a very good fixed income investment process. However, we were concerned the impact all the business changes may have on their focus in managing the fund and the risk of individuals in the team leaving. The team had incentives in place with lock-ins until March 2016, but we still had concerns. Adenaan Hardien, the economist in the team, recently left the business.
Unfortunately, we were notified yesterday that Jonathan Myerson, Bronwyn Blood and Vaneshen Naidoo (the three key individuals in the fixed income team) have resigned from Cadiz to join RMI Holdings. They will continue managing the fund until they leave Cadiz – a minimum of 3 months but at the latest 31 December 2015. There is significant uncertainty as to what happens post that date and we believe it is appropriate to change the rating to Tier 3.
Cadiz Absolute Yield Fund – Change from Tier 2 to Tier 3
29 Jul 2015