OREANDA-NEWS. Fitch Ratings has placed Parvest Equity High Dividend Europe 'Good' Fund Quality Rating 'Under Review'. The fund is managed by BNP Paribas Investment Partners (BNPP IP).

KEY RATING DRIVERS
Fitch has placed the fund's rating 'Under Review' to assess the impact of recent and planned changes in the portfolio management team. These changes are implemented as part of the transfer of the fund's management responsibilities to Paris, primarily to address performance issues and organisational streamlining objectives. Fitch expects to resolve the 'Under Review' status of the fund after a period of six months.

Portfolio management is now under the oversight of Gaetan Obert, who has taken over direct responsibility for the high dividend equity team following the departure of the former team head, Wouter Weijand, in early September. Mr Obert has been heading the sustainable thematic equity division, which includes high dividend equity investment, since end-2014. He will ultimately become the lead portfolio manager of the fund, with Pierre-Marie Piquet as back-up. Both are seasoned European equity portfolio managers with past experience in managing high dividend equity strategies.

Improvements to the investment process and closer integration of the existing and future portfolio management teams have already been initiated over the past year. This included refinements to stock screening, with the support of BNPP IP's financial engineering team, and stronger working relationship with the Paris research team to form a fundamental view on stocks. Future planned adjustments will aim at a stronger, more systematic integration of environment, social and governance (ESG) factors for stock selection and portfolio construction, which may be challenging to reconcile with the high dividend objective of the fund.

The front office tools, operational workflow and broader resources available to the funds, and Fitch's assessment thereof, are unlikely to be materially affected by the portfolio management changes.

Parvest Equity High Dividend Europe is a sub-fund of the Parvest Luxembourg SICAV, with EUR625m of assets at end-August 2015. BNPP IP (rated 'Highest Standards' by Fitch) is the asset management arm of BNP Paribas banking group (A+/Stable/F1). BNPP IP had EUR532bn assets under management at end-June 2015, of which EUR78bn were in equities globally and EUR3bn in high-dividend equity strategies.

RATING SENSITIVITIES
The rating may be sensitive to material changes in the investment or operational processes or resources dedicated to the fund. A material adverse deviation from Fitch's guidelines for any key rating driver could result in a downgrade.

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.