FDs back Myners' 'intervention' call
Two-thirds of finance directors favour proposals in the Myners' review of institutional investment for fund managers to intervene more often when companies under-perform.
And as many as 70% of FDs polled by Barclays Global Investors said fund managers should intervene in companies where they had reservations about potential causes of under-performance.
Three-quarters of FDs agreed that fund managers should make greater use of their voting rights in seeking to maximise value for their shareholders.
Paul Richardson, finance director at global communications group WPP, said pension fund trustees should consider the ‘full range of investment opportunities for their pension funds across all major asset classes, including private equity’.
‘By devoting more specific attention in the future to strategic asset allocation, the outcome will be beneficial not only for the decision makers but most importantly the pension funds themselves,’ he said.
Only 3% of the FDs polled in the survey disagreed with the Myners’ report.
The report, by Paul Myners, chairman of Gartmore Investment Management, has recommended scrapping the minimum funding requirement – legislation introduced after the Maxwell pensions scanda. It also proposes that fund managers take greater care and skill in their decision-making responsibilities and make more frequent use of their voting rights on issues that may affect the value of the planned investments.
In addition to the Myners’ report, FDs said ‘costs, FRS 17 and bear markets’ were the other key issues facing UK pension funds.
Miles O’Connor, head of business development at Barclays Global Investors, said the concerns of FDs reflected a ‘growing awareness in the industry of the need to focus on minimising investment cost as well as performance and risk’.
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