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Morgan Grenfell outperforms pension fund heavyweights

Peter Rodgers Financial Editor
Monday 27 January 1997 19:02 EST
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Morgan Grenfell was among the top performers among big name pension fund managers last year, while the controversial PDFM funds made a late spurt in the fourth quarter to regain a little of the ground they had lost earlier in the year.

Morgan Grenfell, employer of Nicola Horlick, the fund manager who quit this month, was in sixth place overall, beaten by several much smaller funds, according to a survey of pension funds by CAPS and the actuaries Bacon & Woodrow published today

But of the larger pooled pension funds it showed the best return, of 12.2 per cent. Morgan has pounds 934m under management.

Pooled pension funds tend to be a small proportion of a manager's total funds, but since their performance is publicly measured by surveys they are used as shop windows for their companies.

The survey also shows that Scottish Amicable, which next week gives more details of its plans to demutualise, had well below average performance last year.

Its rate of return was 8.5 per cent, compared with the median of the 71 pooled pension funds surveyed of 10.7 per cent.

ScotAm's performance was held back by a negative rate of return of 0.2 per cent in the fourth quarter, compared with PDFM's growth of 2.7 per cent during the same period, taking PDFM's annual rate of return to 8.1 per cent.

PDFM has been under the microscope since Tony Dye, its top manager, took his funds heavily into cash in the belief that the stock market was about to crash. Its rate of return remained near the bottom of the league table of large fund managers last year, even with the late spurt.

Nigel O'Sullivan of Bacon & Woodrow said PDFM's style of selecting stocks for value paid dividends in the last quarter.

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