UK – The UK arm of Merrill Lynch Investment Managers has admitted losing £3bn (€4.7bn) of institutional business this year in the UK but claims the losses are the result of the trend by pension funds towards specialised asset management and away from Merrill’s main product range- pooled funds.
According to the Financial Times, MLIM has won £9bn of gross new business this year, despite the losses. Moreover, it claims that the wins – mainly for specialised business – produce higher margins than the mandates it has lost.
The losses include a £500m active mandate at the Co-Operative Group and a £500m mandate at the Bath & Northeast Somerset pension fund. Others including GKN, the engineering manufacturer, and the Church of England are reviewing their relationship with MLIM.
Though all the pension funds claim any manager changes are the result of investment strategy reviews, the Co-op has said it is considering suing MLIM over its historic performance in relation to the Co-op’s fund and the Bath & Northeast Somerset fund says MLIM’s performance could have been better.