AN ALL-PARTY parliamentary group examining the true cost of demutualisations among life assurers and building societies has called for legislation introducing an independent check on demutualisation windfalls, reports The Financial Times .
According to the paper, the group said this independent analysis of the pros and cons of demutualisation, to be conducted before members voted on demutualisation proposals, was needed to ensure that members' interests were being protected.
The group said too many people in previous demutualisations had not been clear on the benefits or otherwise of the proposals from mutuals and had not had sufficient evidence to make an informed decision. The call for an independent assessment comes ahead of Standard Life's planned demutualisation this year.
STANDARD LIFE HAS stepped up its drive to inject more blue-chip experience on to its board of directors, as momentum ahead of a vote on its planned demutualisation builds, reports The Scotsman.
According to the paper, the Edinburgh-based life giant yesterday unveiled a string of board changes that catapults executives with wide-ranging City experience into the top jobs.
Gerry Grimstone, the former vice-chairman of Schroders' worldwide investment banking business, has become deputy chairman. The previous incumbent, David Newlands, has stepped down with immediate effect after seven years at the firm.
Kent Atkinson, a former finance director of Lloyds TSB, has assumed the role of chair of the audit committee, while Keith Skeoch, chief executive of Standard Life Investments (SLI), has joined the main board - a move that highlights the growing role of the fund management business within the overall group.
Newlands' departure means that only three of the 12 current directors were on the board at the time of a staunchly-defended vote on demutualisation in the summer of 2000, on the back of a campaign spearheaded by Fred Woollard.
Chairman Sir Brian Stewart said Grimstone's "deep experience of the City, equity capital markets and government" would prove "extremely useful to us as we go through this important stage in our history".
Atkinson's experience would be "equally invaluable", he added. He joined Standard as a non-executive director in January last year and has since sat on its audit committee. Skeoch's promotion, meanwhile, recognises the greater role SLI has been playing in the fortunes of the group: it is now likely to be the most profitable part.
Profits statistics will be not be unveiled until members receive a demutualisation prospectus this spring. But SLI notched up a 132% surge in sales to £7.3bn last year, with UK institutional sales more than doubling to £3.3bn. That made it the country's fastest-growing pensions manager.
HENDERSON GROUP is under pressure to explain why it entrusted a private equity fund looking after the money of two million Pearl policyholders to a relative novice in private equity, The Times has learnt.
Roger Greville, a former civil servant and economist from New Zealand with a mainstream investment background, was put in charge of the £600m mandate and embarked on what has so far been a disastrous investment strategy. The private equity fund, set up in 1999, has lost more than £100m during a golden era for private equity when most rival players have produced spectacular profits for their investors.
Hugh Osmond, the entrepreneur who last year bought the Pearl, is locked in an escalating dispute with Henderson over its patchy record in private equity and other investment classes.
Osmond told The Times: “We are still in the process of investigating the private equity performance, but it appears that Roger Greville had limited experience in the asset class before being assigned to run the Pearl portfolio.”
Greville’s division, Henderson Private Capital, made some poor investment calls, in one case investing in Wellnet, an Italian fitness clubs business where the chief executive was already facing fraud charges. Other investments in German food manufacturing and a UK slot machines business have also proved disappointing.
Osmond, who is trying to get a better deal for Pearl policyholders, is putting the various private equity deals under the microscope to see if proper due diligence was always done.
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