The winners of Standard & Poor’s Fund Manager of the Year Awards were announced at a gala ceremony in Melbourne, but there was one unwanted guest.

The awards are supported by the new look Australian  and its upgraded business pages. As this story explains, S&P puts a lot of work into its selections:

“A key criteria was to look at managers doing well, but they got more points if they had more than one product doing better than average and at least one stand-out,” S&P’s director of investment consulting Simon Ibbetson says.

“Of all the managers out there the finalists are the ones we have the most confidence in in the next 12 months, based on their skills, the market and the climate.”

When the finalists were announced last month in the various category, the following were named in the category for “Alternative Strategies”:

Alternative Strategies

Basis Capital – Single-Manager Multi-Strategy
Deutsche Asset Management – Multi-Manager Multi-Strategy
Gottex – Multi-Manager Multi-Strategy
Mellon – Single-Manager Multi-Strategy

But very quietly that list was narrowed to three. Can you guess which one was dropped?

The unwanted guest in the back of the room last night was Basis Capital, which could very well be the biggest Aussie loser from the subprime mess. It’s lost 80% of its capital on one of its funds, or so a letter to investors 10 days ago explained. That’s a big oops.

Given the criticism of roles of rating agencies like Standard & Poor’s in the creation and maintaining of the dodgy subprime based credit securities called Collaterised Debt Obligations (for which they were paid), the selection of Basis is a bit rich, as is the agency’s involvement in some sort of “blessing” of fund managers through an awards system.

No matter which way you look at it, its a form of endorsement of those named as finalists and winners by S&P and by The Australian, although both will deny that.

It’s the look to outsiders that counts, including potential customers of those fund managers selected.