UK - Schemes are hindering themselves by persisting with poorly performing fund managers for far too long, outgoing NAPF investment committee chairman Ken Ayers claims.
Speaking at the association’s annual investment conference yesterday (Wednesday), Ayers told delegates that the NAPF is to survey its membership on how long they retain fund managers and the effects of those decisions to determine the scale of the problem.
And contrary to government and investment industry criticism that schemes have a short-term attitude towards investment, Ayers says sch-emes have damaged their performance by retaining underperforming fund managers for too long.
Ayers said: “Trustees need regular reports on the stewardship of their portfolios in order to see the big picture. They also need to be able to discontinue a relationship at short notice if they believe either their own requirements have changed or their confidence in the managers’ ability to deliver has deteriorated.
He added: “Managers seem to believe that the fact they are required to report performance quarterly means they are under threat if they have a poor short-term record. My own experience is that it is more likely a scheme will persist with a poorly performing manager for too long, rather than firing him too early.”
Additionally, Ayers hit out at corporate Britain and claimed some company boards and management have “forgotten who owns their company”. He said that while investors do not want to micro-manage companies, they do expect to be consulted on major policy issues.
Full NAPF Investment Con-ference report next week
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