SQM revamps managed fund research team

SQM Research has restructured its fund research team, by adding two sector heads, several analysts and creating a new ratings committee.

Paul Saliba has been appointed to the position of sector head, equities and fixed income and Chetan Trehan has been promoted to the position of sector head, real assets, alternatives and multi-asset funds/SMAs.

Former head of research Rob da Silva has left the firm in the restructure.

"We just were starting to notice that we were having some capacity issues. And we needed to deepen the team, we needed the sector heads so we can better manage the respective asset classes," founder and managing director Louis Christopher told Industry Moves.

"It's essentially a bigger team. And over and above that we're putting more oversight in by creating a ratings committee."

The sector heads will put ratings recommendations on new ratings, ratings changes, and any ratings they have doubts on, along with any urgent withdrawals or holds, to the ratings committee. The two sector heads, Christopher and two external independents will sit on the committee. SQM has appointed James Purvis to the committee and is in the process of finalising the final independent member.

Saliba started in the role on Monday and points out that SQM Research is one of the only houses offering ratings on Separately Managed Accounts (SMAs).

"One of the things that SQM provides is ratings of a whole lot of SMAs which other providers don't do because of the conflicted consulting and [their] own SMA solutions," he says.

"SQM pretty much stands alone in terms of providing ratings of SMAs and that is attractive for platforms and trustees of superannuation funds in terms of a comfort that an independent third party with the experience and necessary skills has provided a view on the SMA that they may be admitting to their platform."

Saliba believes that this, along with SQM's willingness to provide ratings on new fund managers slightly earlier in their business cycle, has provided opportunities for SQM to grow.

"Waiting three or four years for track record may not be best, either for the investor as often in the first few years a fund manager can do quite well, and there's a lot of alpha opportunity for good managers," he says.

SQM has recently launched a new fund explorer tool which provides data and analytics on over 10,000 funds.

It has a fee-for-rating model but the fee needs to be paid upfront, prior to any ratings being provided, which Christopher says reduces the potential for conflict.

"The other thing too is will never go down a path of consulting. You only have to look at the auditors to see where that goes," he says.