UK - The UK's fund management companies could soon become nothing more than marketing machines in the wake of the Unilever versus Merrill Lynch case, according to ex-Phillips & Drew CIO Tony Dye.
His comments came as part of a debate, sponsored by ratings agency Standard & Poor’s and the UK Society of Investment Professionals, on the landmark case which sent jitters concerning spin-off litigation throughout the pensions industry.
Addressing around 400 delegates, Dye pointed to these and additional pressures on fund managers leading to greater indexation “which is bad for the market.”
He said the industry would isolate areas of investment which run the risk of litigation and outsource them: “Functions where it could prove a problem will be outsourced.”
Dye - now chief executive officer of Dye Asset Management - was due to be called as an expert witness during last year’s case. An out of court settlement was reached before he was able to address the court.
Dye forecast that fund management houses would increasingly focus on marketing and processing, outsourcing research to independent research providers. He also predicted that anxious trustees would seek comfort in working with large asset managers, who would be more profitable to sue if things went wrong.
He said: There will be a bull market in lawyers. The lawyer/fund manager ratio will go through the roof. It may even become a bubble.
By Madhu Kalia
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The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
Private sector defined benefit (DB) schemes were 96.3% funded on a Pension Protection Fund (PPF) compensation basis at the end of July, according to the lifeboat fund's monthly index.
Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.