In a truly David and Goliath battle fund manager Carmel Fisher is writing to all the unitholders in the Prudential Emerging Companies Trust (ECT) suggesting they move their money to her $27 million Fisher Funds NZ Growth Trust.
As an incentive Fisher Funds is offering investors who switch free entry, bonus units and it has reduced its minimum amount from $10,000 to $1,000.
In her letter Fisher says investors who switch before March 31 and make no withdrawals for 12 months will be given additional units to the value of 1 per cent. Fisher Funds Management will pay for these units.
The catalyst for this offer is Colonial's takeover, last year, of Prudential.
Colonial First State Investments chief executive Bruce Abraham said in October that following the takeover the range of Prudential funds, which included three NZ equity funds, would be rationalised.
It was likely the NZ funds would be replaced or closed, as they didn't fit within Colonial's trademark "truly active" Australasian philosophy, he said.
Fisher in her letter, apologises to investors for invading their privacy, but says she wanted to put before them an alternative fund that was similar to the ECT (which she managed for Prudential from inception in November 1991 through to April 1994).
She says the Fisher fund employs the same methodology as the she used for the ECT.
Colonial is unimpressed by the Fisher's direct approach to its unitholders.
"We...are appalled by this intrusion into the private affairs of investors," Abraham says in a letter to unitholders.
"The public has a right to expect the financial services industry to exercise responsible behaviour in this regard, particularly given the heavy reliance of the industry on self-regulation. We believe that this approach taken by Fisher Funds Management is not consistent with this expectation."
Abraham points out that the Colonial Group manages $55 billion globally, while the Fisher fund is "virtually a one person company operating, we believe, from Carmel Fisher's home".
Retail marketing manager Jackie Emmas says Colonial is concerned that the letter is a "violation of adviser/client relationships".
The company is also concerned the offer may disadvantage some existing Fisher Funds unitholders.
While the Fisher approach appears to be legal, she says, it is "a questionable marketing tactic".
As for the rationalisation of Prudential's funds, Emmas says Colonial is still considering its options. The key criteria are selecting the "best of the best" and having funds which enable investors to benefit from Colonial's "truly active" Australasian management approach. The story which started it all.
In a truly David and Goliath battle fund manager Carmel Fisher is writing to all the unitholders in the Prudential Emerging Companies Trust (ECT) suggesting they move their money to her $27 million Fisher Funds NZ Growth Trust.