OREANDA-NEWS. Fitch Ratings has downgraded Fabrica Immobiliare SGR's (Fabrica) Asset Manager Rating to 'Good Standards' from 'High Standards'.The Outlook is Stable. Fabrica is an Italian real estate asset manager.

KEY RATING DRIVERS

In Fitch`s opinion, the combination of further turnover in Fabrica's staff and the weaker shareholders financial profile are inconsistent with our definition of a 'High Standards' Asset Manager Rating. Accordingly, Fitch has downgraded Fabrica to 'Good Standards' from `High Standards`.

The downgrade is driven by the turnover of key resources such as the Head of Investments/Disposals, the Head of Legal Affairs and the internal movement of the Head of Research and Valuation. Fitch believes the above departures and shuffle may exacerbate the organisational challenge already generated by the turnover experienced since the beginning of 2015 by the company. Other staff members who have taken leave since January are the CFO, two Heads of Risk Management, the Head of Strategy and Development, and the Head of Fund Raising and Investor Relations.

While the CFO and Head of Legal Affairs have been promptly replaced, no replacement has been identified as of now for the Head of Investment/Disposals, who had been with Fabrica since 2009 and is seen by Fitch as a key staff member.

The Head of Risk Management had been firstly replaced by the previous Head of Research and Valuation who consequently had been replaced by an external new resource. Also the current Head of Risk Management, who was appointed in March 2015, has resigned. Meanwhile, the Head of Compliance is acting also as the Head of Risk Management. The responsibilities of the Head of Strategy and Development and the Head of Fund Raising and Investor Relations are currently being absorbed by the CEO.

In addition, following its downgrade in May 2015 to 'B-', BMPS, which owns 49.9% of Fabrica, now has a weaker financial profile.

Asset Manager Ratings are assigned on a descriptive scale based on Fitch's assessment of the manager's investment and operational platform.

RATING SENSITIVITIES

The rating may be sensitive to material adverse changes to any of the key rating drivers. A material deviation from Fitch's guidelines for any key rating driver could cause the rating to be downgraded.

Fitch will seek to determine whether the departed staff will be replaced and whether the quality, quantity and seniority of new joiners to the firm represent an improvement or weakening of the resourcing profile. It will also assess the manager's organisational profile and its ability to mitigate the effects of staff turnover.

Fitch will also take into consideration Fabrica's overall business profile and commitment from its shareholders. A weakening or strengthening of these factors could lead to a rating change.

For additional information about Fitch's asset manager ratings guidelines, see the criteria below

Fabrica was created in 2003 and started operations in July 2004. The company is dedicated to the development, promotion and management of (closed-end) real estate investment funds for institutional clients and private savers.