UK – Nearly two thirds (64%) of finance directors of some of the largest UK companies ‘broadly’ support the proposal of the Myners report on institutional investment in the UK, according to a survey commissioned by Barclays Global Investors (BGI).
More than 70% of the surveyed directors support one of the key points in the report, that fund managers should intervene more often and exercise voting rights as company shareholders.
The survey reveals that the big issues facing UK pension funds are considered to be costs, FRS 17, the Myners report itself and the effect of a bear market.
But there is very little concern for topical issues such as socially responsible investment (SRI), the study says.
Only 1% of respondents ranked SRI as a priority for pension funds.
Miles O’Connor, head of business development at Barclays Global Investors, comments: “ Clear concerns expressed about cost and FRS 17 reflect a growing awareness in the industry of the need to focus on minimising investment costs as well as performance and risk.
“ Although it is accepted that socially responsible investing is climbing up the agenda, the lack of concern from finance directors would demonstrate that it faces strong competition from other commercial issues.”
The Myners report also revealed that more than half of pension fund trustees received less than three days’ training when they became trustees.
Almost all respondents (95%) to the BGI survey feel that trustee education is a good idea, however, 36% are against remunerating them for the job.
Almost half (45%) of those surveyed think that fees for actively managed investment funds were not justified by their performance, only 12% feel that the fees are justified, and 43% remain neutral on the issue.
According to 62% of the finance directors, strategic asset allocation needs more attention than stock selection.
Paul Richardson, finance director of communications group WPP, says: “ One of Mr Myners’ recommendations for transparent and efficient institutional investment is that money managers, consultants and pension fund trustees must consider the full range of investment opportunities for their pension funds across all major asset classes, including private equity.”
The survey had 76 responses – a 31% response rate, including more than a quarter of the one hundred largest British stock exchange listed companies.