(The following statement was released by the rating agency)
PARIS/LONDON, July 24 (Fitch) Fitch Ratings has downgraded LFP Europe Alpha's
Fund Quality Rating (FQR) to 'Weak' and resolved the 'Under Review' status where
it was placed on 28 January 2013. Fitch has subsequently withdrawn the rating as
the fund is no longer considered by Fitch to be relevant to the agency's
Despite the actions taken by management after the fund's severe underperformance
in 2012, Fitch views the ability of the investment process to generate a
consistent performance as structurally questionable, and expects LFP's 'alpha'
process to be structurally rethought. Fitch notes that management is already
working on strengthening firm's equity process and on repositioning the fund.
Fitch placed LFP Europe Alpha's 'Satisfactory' FQR Under Review in January 2013
following the deterioration in its performance in 2012, reflecting the
volatility of alpha, as outlined in LFP Europe Alpha's Full rating report dated
10 February 2012.
The volatile performance has materially impacted the fund's long-term track
record, causing the three-year Lipper score to fall to 1 in September 2012. It
has continued to lag its benchmark and peers in 2013 year to date (at end-June).
YTD (at end-June) the fund returned +0.58%, versus +4.08% for its benchmark, the
Stoxx600, its Lipper leader scores remaining at 1on one year and three years
since September 2012.
The fund is managed by La Francaise des Placements (LFP), an entity of La
Francaise AM, an asset management group, 86% owned by Credit Mutuel Nord Europe
(a euro-regional bank mainly present in northern France with branches in Belgium
(BKCP) and Luxembourg (UFPB)). The group managed EUR37bn as of end-June 2013,
through La Francaise Real Estate Managers and LFP ('High Standards' asset
manager rating by Fitch).
Fitch's Fund Quality Ratings combine Fitch's experience in qualitative fund
analysis with rankings and performance data from Lipper, a Thomson Reuters
company. Fitch's Fund Quality Ratings offer an independent, forward-looking
assessment of a fund's key performance and risk attributes and consistency of
longer-term returns, relative to peer group or benchmarks. The ratings focus on
the fund manager's investment process, key fund performance drivers, risk
management, and the quality of the fund's operational infrastructure.
For more information, please see www.fundmanagement.fitchratings.com
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Media Relations: Hannah Huntly, London, Tel: +44 20 3530 1153, Email:
Additional information is available on www.fitchratings.com
Applicable criteria, 'Fund Quality Rating Criteria', dated 19 September 2011, is
available at www.fitchratings.com.
Applicable Criteria and Related Research:
Fund Quality Ratings Criteria: Assessing Fundsâ Investment Processes and
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