Tower soothes clients
Tower is hoping its announcements on Wednesday will persuade FundSource to remove its negative ratings watch from its funds.
Tuesday, May 27th 2003, 1:51AM
Tower is reassuring investors and advisers that their managed funds and risk policies aren’t affected by the company’s profit warning issued late last week.
The company said that it is likely to report, on Wednesday, a loss of $180 million for the six-month period to March 31.
It is also downplaying a decision by managed fund research house FundSource to put all its recommended funds on negative ratings watch, pending further analysis of Tower’s position.
General manager marketing health, risk and investment products Richard Baker says move is to be expected given the company’s announcement.
He notes that major competitors in the funds management and risk businesses have also been placed on negative watch recently.
While Tower’s corporate problems don’t impact on the investment and risk products it does create concern amongst customers.
Baker says the company has been receiving calls from worried investors, but this time around the number of calls has decreased.
He points out that about half of the money invested in Tower funds is actually managed by other companies.
Tower group managing director Keith Taylor reiterated that the company is operationally profitable and financially sound. It has sound reserves and is well ahead of required solvency rates. The net asset backing per share is around $3.15.
Baker says the changes the company has announced, including to-be-detailed capital raising are part of the “renewal” of Tower.
Although things have been difficult fund outflows are decreasing and the company is recording good inflows.
He is confident that once the company’s announcements on Wednesday will address market concerns and that FundSource will be able to positively reassess its position on Tower.
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