The move marked the end of a 30-year relationship, according to Reuters. “We have been unhappy with Merrill’s investment performance for some time,” Co-op group secretary Nick Eyre said in a brief statement. “In view of the recent exodus of key managers from Merrill’s and following specialist advice, we have decided to dispense with their services.”
The Co-op will shift its funds from MLIM to Legal & General Investment Management at the end of May, where they will be run on a “passive” basis tracking stock market indices, according to the report.
Last December MLIM, after eight weeks of legal wrangling in Britain’s High Court, reached a settlement with Unilever in a £130 million negligence suit regarding the management of some £1 billion in assets of the consumer giant’s pension fund between January 1997 and March 1998 (see Merrill, Unilever Fight it out in UK Court ).
The amount of the settlement, which Merrill Lynch agreed to pay without admitting liability, was not disclosed (see Unilever, Merrill Come to Terms on Landmark Suit ), but was reportedly about £75 million.
MLIM is the top active manager of pension fund assets in the UK.