UK - Trustees of the £700m Surrey County Council Pension Fund will discuss possible legal action against Merrill Lynch Investment Managers (MLIM) at their meeting next month.
A Surrey County Council spokesman said: “The topic of the Unilever out of court settlement will be discussed. But I am not aware that they will definitely decide to sue.”
MLIM reached a settlement with Unilever last month following a protracted High Court wrangle. MLIM is believed to have paid Unilever £70m - but without admission of liability.
Surrey is weighing up its own options.
The spokesman added: “We have been following the court case and the implications of the settlement. We have been making our own investigations as regard to our own underperformance with Mercury Asset Management between 1990 and 1998.”
MAM - which was bought by MLIM in December 1997 - was subsequently sacked by Surrey after concerns about the underperformance in 1998. Industry experts believe trustees will decide to seek their own settlement with MLIM if they believe they have a case to make.
Trustees, as well as MLIM, are unlikely to want the costs and damaged reputations that emerged when Unilever decided to sue. Also, Surrey trustees are likely to follow the example of the J. Sainsbury scheme which is also looking to reach an out of court settlement.
Unilever took MLIM to court last October after its UK equity portfolio exceeded its -3pc underperformance benchmark in late-1996 and throughout 1997.
Another scheme considering action, AstraZeneca, is expected to come to a decision in March once trustees have met.
An MLIM spokesman said: “This time of year everyone has trustee meetings and all trustees will review their position. They have a fiduciary duty to look at this situation for their members. But as far as the Unilever situation is concerned, it was a unique relationship and a unique contract. We know of no basis for any other claim.”
By Paul Sanderson
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