Fitch Places Lombard Odier's All Roads Fund's 'Strong' Fund Quality Rating "Under Review"

Wed Aug 20, 2014 9:26am EDT

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(The following statement was released by the rating agency) PARIS/LONDON, August 20 (Fitch) Fitch Ratings has placed LO Funds - All Roads' 'Strong' Fund Quality Rating "Under Review". The fund is managed by Lombard Odier Investment Managers (LOIM). KEY RATING DRIVERS The rating action follows the departure of two portfolio managers - G.Savry and O.Blin - of the fund in August, after the departure of J.Teiletche, who was responsible for systematic investment solutions, including risk-based strategies, earlier in March. Given the fund's investment process is largely model-driven, as highlighted in the fund's report, Fitch perceives limited staff dependency. However, following the current staff turnover, the fund faces a reduction in resources dedicated to the day-to-day management as well as to model research and development. Fitch expects to resolve the "Under Review" status of the fund after six months. The agency will closely monitor the fund during this period to assess if staff departure has affected the capacity of the fund to achieve its objectives and outperform peers. The investment process of the fund remains unchanged. Fitch will monitor the fund across three key areas: firstly, the strengthening of the team that supports risk parity strategies; secondly, the stability of the fund in terms of adherence to its investment and research process and thirdly, its ability to maintain its performance track record within its peer group. Sufficient demonstration of the above would likely lead to an affirmation of the "Strong" rating. Conversely, an inability to demonstrate the above could lead Fitch to consider downgrading the fund. The daily management of the fund has been taken over by A.Storno, who is head of the 2-strong asset allocation team. Mr Storno has been involved in LOIM's asset allocation strategies since the launch of the risk parity strategies but was not involved in the day to day management of LO Funds - All Roads. LOIM is looking to add up to two members to the team over the coming weeks. LO Funds - All Roads is a sub-fund of LO Funds, Lombard Odier's Luxembourg SICAV, which is UCITS IV-compliant. Launched in January 2012, All Roads is a diversified fund with EUR130m of assets as of end-July 2014. The fund uses a risk parity approach, first developed in 2008. LOIM is the asset management division of the Swiss private bank Lombard Odier SCA (AA-/Stable/F1+). The company managed USD48bn as at December 2013, including USD5.4bn across multi-asset portfolios, of which USD2.9bn are managed on a risk-based approach. 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. For more information, please see www.fundmanagement.fitchratings.com To receive forthcoming Fund Quality Rating research, opt in here Contact: Primary Analyst Manuel Arrive, CFA Senior Director +33 1 44 29 91 77 Fitch France S.A.S. 60 rue de Monceau Paris 75008 Secondary Analyst Richard Woodrow, CFA Associate Director +44 203 530 1388 Committee Chairperson Ralph Aurora Senior Director +1 212 908 0528 Media Relations: Elaine Bailey, London, Tel: +44 203 530 1153, Email: elaine.bailey@fitchratings.com. Additional information is available on www.fitchratings.com The sources of information used to assess this rating were the public domain and LOIM. Applicable criteria, 'Fund Quality Rating Criteria', dated 19 September 2011, are available at www.fitchratings.com. Applicable Criteria and Related Research: Fund Quality Ratings Criteria: Assessing Funds’ Investment Processes and Operational Attributes here LO Funds - All Roads here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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