PAC Capital ‘refused’ to give trading data to ratings firm
PAC Capital declined to provide a ratings agency with underlying data on the returns by one of its funds, a step that could damage investor confidence.
SQM Research on Thursday withdrew ratings from two of the investment house’s funds, including its heavily promoted esports computer gaming fund, and downgraded ratings on two more to 3.25 stars, steps that signify to financial advisers that they should not recommend the funds to clients.
PAC Capital’s offices on Macquarie Street in Sydney. Louise Kennerley
After The Australian Financial Review reported on unusually big swings in the esports fund during the last months of 2021 and early 2022, SQM Research sought information from PAC Capital that would explain the performance.
“This request for attribution information was denied by the management of PAC Capital,” the firm said. “As a result, SQM Research has current heightened corporate governance concerns surrounding the operation of all the presently rated funds.”
It is extremely rare for asset managers not to provide ratings agencies with their underlying performance data, such as the timing and number of stock trades, when asked for the information, which can be used to verify returns.
Another concern raised by SQM Research was the decision by PAC Capital’s chief investment officer for shares, Sunny Bangia, to resign three weeks after he joined in July. Mr Bangia has not explained his departure.
Although there is only $55 million in the affected funds, according to Morningstar data, the downgrades are a blow to the ambitions of PAC Capital’s 37-year-old owner, Clayton Larcombe, who has spoken of his plans to become a force in the funds management industry.
Mr Larcombe did not immediately respond to a request for comment
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