UK - Wendy Mayall said in the High court Wednesday that she told Alistair Lennard to "get on" with managing the UK equity portion of the Unilever Superannuation Fund.
In the case brought by Unilever against Merrill Lynch Investment Managers (MLIM), the pension fund’s CIO recalled a lunch in October 1996 at which Mercury Asset Management’s (MAM) fund manager Lennard and his boss co-director Carol Galley attended.
Mayall said that Lennard started talking to her about his views on the market and he was particularly enthusiastic about the industrial sector.She said: “What I said was along the lines of ‘you are the fund manager, get on with it.’”
MLIM’s barrister Ian Glick QC is trying to prove that Unilever was aware of the risks being taken in the portfolio by Lennard, that it was guilty of contributory negligence.
Mayall admitted she knew Lennard was “running a concentrated portfolio” and that it was underweight in financial stocks and overweight in cyclicals and industrials.
Mayall however qualified this by saying: “I never thought it was my job to interfere with a manager.”
Mayall also contradicted previous witness Hugh Stirk, former chairman of the trustees. In his testimony Stirk said that he was the only trustee aware of the -3% downside risk benchmark when it came into effect in January 1997. But Mayall said that all trustees were aware of the downside risk even if they were not aware of the exact percentage.
MLIM bought MAM in December 1997. Unilever is suing MLIM for £130m, which it believes will compensate for the alleged underperformance of the fund during 1997 and 1998.
By Paul Sanderson