Although Alistair Lennard, the investment manager charged with overseeing the £1 billion mandate had been labeled a wild card by USF lawyers, Mayall instructed him to continue managing the money, saying “you’re the fund manager, get on with it,” according to the Financial Times.
In USF?s negligence suit against MLIM, formerly Mercury Asset Management (see Merrill, Unilever Fight it out in Court ), Lennard’s management of the pension fund?s £600m UK equities portfolio between January and May 1997 has emerged as the primary reason why the fund trailed its benchmark by 10.5%.
In her testimony before the court, Mayall contended that she did not regard it as her job to tell fund managers how to do their job ? she therefore did not scrutinize a crucial performance report prepared by Mercury, too closely. Despite being asked by the fund to examine it, Mayall conceded that she had only “cast her eye over it”.
It emerged that the fund’s trustees had not discussed the details of a new underperformance threshold established by Mayall in November 1996, which stated that the fund should not lag the benchmark by more than 3% in any four successive quarters. Mercury failed in this regard and was sacked in March 1998.
– Camilla Klein firstname.lastname@example.org
Read more at: Unilever Trustee Says Managers Should Monitor Risk