Schroder's pension funds down $30bn
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Your support makes all the difference.European pension funds managed by Schroder Investment Management lost almost a third of their value in the 18 months to December 2001 due to tumbling stock markets and the loss of clients, according to a study published yesterday.
Mercer Investment Consulting, which published the survey, also said pension money entrusted to Merrill Lynch Investment Managers declined by 23 per cent during the same period to $83bn (£55bn). Schroder's funds stood at $70.26bn, from $100.4bn.
Both companies have been in the spotlight for poor investment decisions at their pension fund businesses. Schroder's reputation suffered when it was one of the few companies not to pile clients into technology stocks in the late 1990s.
The company was also thought to have less able fund managers than some of its rivals and its control of risk taken in investment decisions was judged to be not as well managed. As a result, Schroder lost clients in 2000 and 2001.
Merrill's pension fund business hit the headlines last November when it embarked on a high-profile legal battle with Unilever's pension fund, which successfully sued Merrill for underperforming its benchmark and won £70m in compensation.
Merrill also agreed an out-of-court compensation settlement with J Sainsbury over its own £2bn fund and is rumoured to be in talks with Surrey County Council about whether it is in line for compensation.
All three cases date back to when Mercury Asset Management managed the funds in the 1990s. Mercury was subsequently bought by Merrill.
Schroder fell from number three to seven in Mercer's table of top 20 managers due to the shrinkage of its funds under management. Merrill fell from number two to number five.
A spokesman for Schroder said: "These figures reflect our weaker period of the late 1990s, which had an impact on the firm in 2000 and 2001. The performance has recovered since then, so that in the three years to June 2001, 75 per cent of retail funds were above their benchmark."
Schroder admitted it had lost clients as a result of its performance in the late 1990s, but said that nearly 75 per cent of the drop in its assets in the period considered by Mercer was due to the fall in the stock market.
Barclays Global Investors, Britain's largest passive manager, retained the number one slot in Mercer's table and Legal & General jumped from fifth to third place. Deutsche Asset Management moved from fourth to second position, reflecting its acquisition of Bankers Trust assets.
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