Galley defends colleague on Unilever
CAROL Galley today spent more than two hours defending Alistair Lennard, her former colleague at Mercury Asset Management, saying the young fund manager was entitled to contravene house investment guidelines.
The ex-head of Mercury said portfolio weightings recommended by the sector strategy group, to which Lennard belonged, were not mandatory and he was allowed to use his discretion. But Galley said the Unilever pension portfolio managed by Lennard would have done better had he not rejected the strategy group's recommendations in 1996.
On the witness stand for the third day, Galley was told repeatedly by Justice Colman to answer the questions asked by Unilever counsel, Jonathan Sumption QC.
Unilever is suing Mercury, now owned by Merrill Lynch, in a bid to win £130m compensation for the poor performance of a £1bn slice of its pension fund in 1997 and 1998.
Galley defended Lennard's decision to hold no banking shares despite the strategy group recommending portfolios be just 15% under the index's weight in the sector. She also stood up for his decision to be six times overweight in property and invest 45% of the Unilever funds in industrial stocks. Galley added Mercury struggled in 1996 to anticipate the stock market.
