Alastair Lennard, the rising star at Mercury Asset Management who managed £1bn of pension fund assets for Unilever, disregarded investment guidance which he was himself instrumental in forming, the High Court heard yesterday.
Mr Lennard's actions are now the subject of a multimillion-pound law suit between Mercury and Unilever over the underperformance of the consumer goods group's pension fund, which yesterday saw Carol Galley take the stand for a second day as Mercury's star witness. Ms Galley was grilled about why she allowed Mr Lennard, a protégé who took over running the Unilever fund from her, to create positions in stocks which were out of line with advice given by an investment committee which he sat on.
Mr Lennard, who was 27 when he first took over the Unilever portfolio in 1993, "was sitting on a committee making proposals for the rest of Mercury which he had already dispersed with", Jonathan Sumption, Unilever's QC, told the court. Mr Sumption argued that the freedom given to Mr Lennard was particularly remarkable when Ms Galley kept other members of a small group of managers known as the Select Team within stricter guidelines. Adhering to the house views on sector strategy "was indeed the process at Mercury and was observed in every case except Mr Lennard", Mr Sumption said.
Ms Galley countered that she monitored Mr Lennard "at all times". She admitted that her decision not to tell Unilever or its chief investment officer, Wendy Mayall for two years that she had passed its portfolio on to Mr Lennard was a mistake. "I wish I had told them. It makes us look as though we weren't being straightforward," Ms Galley, who is 53, said.
Meanwhile, Mercury was granted leave by the presiding judge, Mr Justice Colman, to request more documents from Unilever which it hopes will establish that the group's trustees were kept well informed about its actions between 1993 and 1996.Reuse content