UK - Blacket Research, the firm set up to evaluate trustee decisions and investment consultants' advice to pension funds, has gone into liquidation after heavy losses.

Edinburgh-based Blacket had counted the Scottish & Newcastle, J. Sainsbury, ITV and the London Borough of Newham funds among its clients.

Blacket was set up by former Scottish Widows Investment Partnership executives Roger Brown and Kevin Sime. Coal Pensions chief executive David Morgan was non-executive chairman until he stepped down this year.

According to the firm's 2005 accounts, it made a pre-tax loss of £213,535 (€317,961) on turnover of £17,743.

"A-day cost us quite a lot," Brown told IPE. "In our first year of trading people's minds were absorbed with A-day. The second major factor was that we did not concentrate enough on the trustees. We were not on the trustees' agenda."
 
Brown said that competition was not in the least the problem. "There is no competition in this field. Nobody is providing assessment of investment consultants. It is always toughest to be the first."
 
However, Brown is convinced that Blacket has "woken people up to the importance of assessing investment consultants".

He said that in the last talks with pension funds many had shown interest in this topic. "Pension schemes are very conservative in the way they operate and they are slow to adapt. But that is beginning to change."
 
Given this development re-starting Blacket research or a similar company is something Brown and his team are "looking into at the moment", he said.

When he joined the firm, Morgan said he was attracted to it because it was the only firm systematically measuring consultants.

He said at the time: "One of the biggest challenges facing trustee boards today is assessment of their investment consultants.

"In years to come, we'll regard independent measuring of consultants as even more important than the independent measurement of managers that we take for granted today."

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