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Hunter Hall International says it's 'business as usual'

One of Australasia's largest ethical investment firms has reassured the New Zealand finance industry that nothing has changed despite the turmoil caused by the shock resignation of its founder and an ongoing takeover battle

Wednesday, February 1st 2017, 6:00AM 1 Comment

by Owen Poland

In response to a series of questions from Good Returns, Hunter Hall International says that although this is a time of some uncertainty in terms of who our largest shareholder will be, "other than that it is very much business as usual for us."

The drama started in late December when Peter Hall shocked the market by resigning from the company he founded in 1993, because of a "complex range of personal and family reasons." Investors were left dumbfounded when Hall sold a 19.9 per cent stake in Hunter Hall International (HHL) to the Australian investment conglomerate WH Soul Pattinson (WHL) at less than a third of their face value.

Having also agreed to sell his remaining 24.05% stake to WHL for $1 a share, Hall urged remaining shareholders not to accept the same offer. Since then a higher bid has emerged from Pinnacle Investment Management which says it'll raise its $1.50 per share offer to $2 – if it gains control.

Adding to investor angst was the fact that WHL owns a controlling stake in the Hunter Valley coalminer New Hope Corporation, and that – as a private investor – Hall said he was attracted to a number of opportunities in the resources sector.

Expressing its disappointment at Hall's actions, Australian Unity Personal Financial Services (PFS) said that selling shares at such a deep discount was not in the best interest of other shareholders in the company. It also noted that WHL did not have the same ethical investment ethos. But after a preliminary meeting with Hunter Hall, WHL says it intends to work with the company to continue the investment style and culture which has made it a success.

In a statement provided to Good Returns, Hunter Hall says "the perception is that Peter made all the decisions but in fact that is not the case". Pointing to its experienced investment team, it says "the truth is all Hunter Hall funds continue to operate as normal and with the same investment philosophy and process".

Hunter Hall manages in the ballpark of $30 million on behalf of Kiwi investors, and while there have been some redemptions since Hall's resignation the company says it is "not aware of any significant increase".

Marketing on this side of the Tasman has been undertaken by The Investment Store. Founder and managing director Matthew Mimms was not prepared to discuss the Hunter Hall fiasco, but in a prepared statement issued from Hunter Hall's Sydney headquarters Mimms says, "I have full confidence in the strong and experienced team at Hunter Hall, including interim CIO James McDonald and Deputy CIO Jonathan Rabinovitz with who I have maintained a strong and constructive relationship with over the years. Many financial advisers in NZ will be familiar with both James and Jonathan who have presented at adviser functions over the past few years."

"Hunter Hall has a tried and tested investment approach and process (active, value-orientated, small/big cap biased) and is fully committed to its ethical approach to investing in global and Australasian equities.

"I have had a relationship with Hunter Hall since November 2006; during which period their flagship Value Growth Trust has outperformed its benchmark (MSCI World Total Return Index). I currently have every intention of maintaining my business relationship with Hunter Hall."

Tags: responsible investing SRI

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Comments from our readers

On 2 February 2017 at 4:31 pm Just Saying... said:
It will be interesting to understand the advisory justification to retain the remaining “…$30 million on behalf of Kiwi investors…” – especially if the risk/return expectations are not met going forward.

In the absence of revised research, or thorough due diligence, the advisor decision to retain funds with a Manager where key individual responsibilities have diminished or departed, may present recourse repercussions for the investor.

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