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Early last year BT had a tough time. German bank Deutsche Bank bought the global BT business and said it was going to keep the Australasian operations. Then it changed its mind and said they were for sale. Westpac Banking Corporation was about to buy those parts of the business then pulled out at the 11th hour. Finally the business was sold to US-based Principal Group.
Throughout this process research houses in Australia and New Zealand downgraded BT and warned investors against putting new money into BT funds because of uncertainty over the sale process.
Consequently, funds flow in the first half of the year dried up to a trickle.
Since then many research houses lifted the holds and recommended BT products again.
IPAC Securities lifted the hold on some of the funds such as Global Bonds, New Zealand Shares and Pacific Basin, however kept hold recommendations on key trusts including International Shares.
IPAC's concerns with the international fund centred on "a degree of management change and weak subsequent performance."
Holds were kept on some of the other funds such as NZ bonds and managed growth as they weren't performing as strongly as expected.
However, late last year after visiting BT's offices in Sydney, IPAC lifted the holds on some of these funds, notably International Shares.
IPAC general manager David van Schaardenburg says he is more comfortable with some of the aspects that previously caused concern.
BT has in the past year gone through a number of changes in how it manages money, particularly with implementing greater risk controls.
Van Schaardenburg says the changes have moved BT from being an aggressive and innovative money manager to one that is more mainstream.
"The culture has changed," he says. "They are more constrained now."
BT has a more structured approach to investing and doesn't take as big bets as before.
Van Schaardenburg says the changes have moved performance "down a notch" on the risk/return scale, however they are generally still above index.
He says BT are no longer held up on a pedestal for the high returns they achieved from its aggressive investment approach, rather it is now a firm which is a good quality mainstream manager.
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