Fidelity and the "premier supporter group of the Conservative Party"

Ahh.... Fidelity, the lure of right-wing British politics is just too strong for you isn't it?

I've blogged previously about the latest Fidelity link to the Tories - their involvement with the Leaders Group. According to the Conservative Party's own website this is the "premier supporter group" for the Tories, with an annual membership of £50,000.

As if you were in any doubt about which party Fidelity were rooting for in the General Election, the Q1 2015 disclosure of which "major donors" attended Leaders Group meals in the first quarter shows that both Barry Bateman and Simon Haslam represented Fidelity (FIL Holdings in the list). It isn't clear if the were both at one meeting, or if more than one was attended. As well as being a board member of FIL, Simon Haslam is of course also chair of Colt, where Fidelity is the major investor.

Of course the Conservative Party has embarked on a major assault on trade unions since the election, something that was trailed in their manifesto. If you are a trade unionist who is a pension fund trustee or otherwise has some involvement in this area you might want to choose asset managers who don't fund attacks on you. 

Another Fidelity - Conservative Party link

I've blogged a lot previously about the many links that exist between the asset manager Fidelity and the Conservative Party. I've just discovered a new one that provides a bit more insight into how significant the relationship is.

The Leader's Group is one of the Tories' donor clubs. In fact, according to their own blurb, this is the "premier" supporters group:

Annual membership: £50,000 Chairman: Howard Leigh
The Leader’s Group is the premier supporter Group of the Conservative Party. Members are invited to join David Cameron and other senior figures from the Conservative Party at dinners, post-PMQ lunches, drinks receptions, election result events and important campaign launches.

It's not cheap either, at £50,000 for an annual membership. Helpfully the Tories provide some data on who meets who in this club, and look who turns up in their disclosure for Q4 2013:

FIL Holdings (UK) Ltd (represented by Barry Bateman, Director )

I had vaguely heard of Barry Batemen so I had a google around, and it turns out he's the vice-chairman of the UK business. This is a very senior position in the firm.

So in addition to funding the Conservative Party, employing a Conservative MP, sponsoring meetings of the Conservative Party's business liaison organisation and voting in favour of PLCs making political donations to the Conservative Party, Fidelity had one of its most senior UK people at an event organised by the Conservative Party's "premier supporter group".

Fidelity "steers away from" own previous views?

Just a quick update, as I noted in a previous post Fidelity says it has "deliberately steered away from" addressing the question of scale/size/amount (or as they say "quantum") of executive pay.

This hasn't always been their view. It turns out that Fidelity told the Parliamentary Commission on Banking Standards that in the banking sector "both the quantum and structure of incentive awards were wholly disproportionate to the economic benefit being generated." (see Para A4 here)

Fidelity also told the PCBS that its proposals for exec pay reform would help tackle the scale of pay, and that "reducing the overall size of awards" was something that "needs attention".

"In the case of Career Shares or ex-ante performance vesting, once shares are awarded they really do belong to the recipient and hence it should be possible to achieve the same motivational effect with a lower quantum of shares. This could make a contribution to reining in the overall size of awards which is another area which needs attention." (Para C4).

So they used to think the scale of pay mattered, at least for banks, but apparently no longer do.

Fidelity, the Tory-friendly fund manager

As the latest info from the Electoral Commission reveals, Fidelity is still funding the Tories. £25,000 donated in November took their total for 2014 up to £120,000.

They are also still paying Tory MP Sir John Stanley for advice on "business opportunities and risks" at the rate of £1,800 a month (so around £20K a year). As I've noted before his constituency is where Fidelity is based, so will be interesting to see if they continue this relationship with Sir John's  successor as he stands down at this election. It's a very safe seat so will return another Tory.

For those new to this story, it's worth noting that Fidelity have also - 

Voted in favour of political donations to the Tories by PLCs in which they are a shareholder

Sponsored meetings of the Tory business liaison group the Enterprise Forum

Donated £50,000 to the No campaign in the AV referendum

So, if you don't want to fund the Tories by accident you might want to check out if you have any savings managed by them and see if you can switch. I shifted our family savings away from Fidelity several years ago because of this. I continue to try and make non-Tories, including pension fund trustees, aware of this link between Fidelity and the Tories. It's up to individuals to decide if they are happy with it, or if they think it constitutes any kind of conflict, but they should at least be aware of it. 

Caledonia gives up on the Tories?

An interesting little snippet, today the investment trust Caledonia Investments issued its notice for the forthcoming AGM which includes the list of resolutions that will be put to the meeting. The thing I looked for straight away was if they were seeking authority to make political donations, as the company has been a regular Tory donor in the past, and quite noisy about it.

But there's nothing there - no such resolution. And this is, of course, the last AGM before the election where the company could seek such an authority. It looks to me like they may have, finally, backed off. For completeness, I checked whether the Cayzer Trust, the major shareholder in Caledonia, was still making donations, and indeed it is.

But the majority of Caledonia shareholders are not linked to the Cayzer family, and that's why I've always thought it was inappropriate for the company's money to be spent supporting a particular political party (though others - like Fidelity - obviously disagree).

So, hopefully, it looks like common sense has prevailed.

Fidelity's voting conflict

I blogged previously about the the tricky spot that Fidelity Investments puts itself in by making political donations to the Conservative Party. Digging around a bit I've found a second (here's the first) example where it voted in favour of a resolution seeking authority to make political donations put forward by a PLC that made political donations to the Conservative Party.

The 2010 annual report of Enquest is available here. If you turn to page 44 (or just search for 'Conservative Party') you can find the following statement:

Political and charitable donationsThe Company made charitable, social, community-related and political donations totalling US$71,145 during the year, which includes a political donation of US$13,300 to the Conservative Party.

Faced companies that make party political donations, many shareholders will oppose resolutions seeking authority to make them. But I have checked Fidelity's voting disclosure for May 2011 - which was the opportunity to vote against the company - and it voted for the resolution on Enquest's AGM agenda seeking the authority to make donations.

It should be noted that many shareholders did not feel the same way. The AGM results are no longer available on the company's website but I blogged at the time that the vote against was 30%. (For completeness, Enquest now states that it makes no party political donations, see page 17 here.)

So we have two real life examples of an asset manager that makes donations to the Conservative Party voting in favour of political donation authorities put forward by companies that made donations to the Conservative Party.

Doesn't look great does it?

Conflicts of interest of political donor shareholders

The more I think about it, the more troublesome I find it that Fidelity, and other institutional shareholders that make party political donations, have the right to vote on resolutions put forward by companies seeking authority to make political donations.

The important question is, how objective can an organisation that funds the Conservative Party (or any other party) be when voting on resolutions seeking authority to donate to the Conservative Party? In a real-life test case, we can see that Fidelity voted in favour of such a resolution. 

I am sure the intention behind giving shareholders a vote on political donations was not that politically networked asset managers could assist companies in making party political donations. So I think this does need dealing with.

I think there are two simple steps that would address this - 

1. Fidelity should disclose in its Stewardship Code statement that it has a conflict of interest when voting on resolutions relating to political donations. (It currently makes no mention of this conflict as far as I can see)

2. Fidelity should outsource the vote on such resolutions to a third party.  

This model could be applied to other asset managers faced with the same conflict.

More generally, maybe it would be a good idea for Fidelity and others to poll their clients on political donations. I suspect the large majority are unaware that it makes them. Given ongoing reforms to the funding of political parties, such as those relating to the unions' funding of the Labour Party, it seems a little odd that conflicts in financial relationships like those between Fidelity and the Conservatives are not being addressed. 

Fidelity bungs the Tories another £75,000

A quick update on "generally non-partisan" fund manager Fidelity. A quick look on the Electoral Commission register of donations reveals that they gave the Tories £75,000 during 2013, comprising three donations of £25k in April, August and November. This compares to £100,000 donated during the year before.

The drop in donations probably doesn't mean a lot, they seem to be a bit erratic. Also, if previous experience is anything to go by, we might see their donations rise quite a bit this year to help fund the Tories' 2015 campaign. In the year up to the 2010 general election Fidelity gave the Tories £300,000.

Also worth keeping a eye on Caledonia Investments. They have previously sought shareholder approval to make donations to the Tories. But I wonder if the Cayzer family are the sort who might switch to UKIP? Or simply give up of the Tories?

Another Fidelity/Conservative snippet

Doing a bit more digging around on links between the Conservative Party and Fidelity, I came across this piece on Open Democracy (from last March) which lists peers' financial interests related to healthcare reform. It includes a little bit on Lord (Bob) Edmiston -

Lord Edmiston: Shareholdings in Bupa Finance plc where Baroness Bottomley is a director. Bupa provides health insurance, private hospital and care group in direct competition with the NHS. Shares in Fidelity International Ltd, which acquired Telehealth Solutions Ltd in 2011. Telehealth has partners in the NHS and private health-care - and has several contracts with the NHS.  Telehealth is rapidly expanding and works to give people treatment from home, and is seen by Health Secretary Andrew Lansley as a way to save the NHS millions.

A quick look on the Electoral Commission register of donations shows that Lord Edmiston (who became a Lord in 2010) has - like Fidelity - been a big Conservative donor in the past, giving them £250,000 in 2004, though donations have been rather smaller lately (£9,000 in 2011). He also famously lent the Tories money. In 2006 he was also revealed to be one of the members of the Midlands Industrial Council, a business group that funds the Tories. These financial links to the Tories meant that a few eyebrows were raised when he became a peer.

But how did he end up with shares in Fidelity International? I found this profile piece from the Birmingham Post in 2011, which looks like part of a list of top regional business leaders. In it there is reference to a sale of properties to Fidelity:

His business – the IM Group – had a difficult recession in both its car import business and property interests, affecting the value of the business. Net assets of the two sides of the group amount to around £280 million.

The Coleshill-based business sold a portfolio of properties to Fidelity International in August, and that sale realised £22.7 million. The buildings are let to 13 tenants, including Severn Trent, Allied Dunbar and Staffordshire Police as well as a range of industrial clients.

So it's possible - note: possible, I am just guessing here - that shares in Fidelity were part of the deal.

For the sake of completeness, note that Lord Edmiston's parliamentary profile does not list shares in Fidelity in his register of interests. So presumably he sold them.

UPDATE: if you scroll down here, you can see that Lord Edmiston's interest in Fidelity was deleted in 2011.

The Fidelity/Conservative connection

I was Googling around on Fidelity and the Tories last night and came across this story from 2007. What caught my eye was this comment -

“We do not comment on our political donations. We do not endorse political candidates and generally we take a non-partisan approach with politics.”

I still think the "non-partisan" claim is hilarious, frankly, but the bit that struck me was that line about not endorsing political candidates. As far as I am aware this is true. But Fidelity does have a Conservative MP it employs as a consultant who seems to be paid pretty much every month.

Sir John Stanley's register of interests is here. Here are the Fidelity contributions:

2. Remunerated employment, office, profession, etc.

Consultant on financial services to FIL Investment Management Ltd (formerly known as Fidelity Investment Management Ltd), Oakhill House, Hildenborough, Kent TN11 9DZ.

£1,800 received for attending meetings as necessary and advising on business opportunities and risks. Hours: 7 hrs. (Registered 23 May 2012)

£1,800 received for attending meetings as necessary and advising on business opportunities and risks. Hours: 8 hrs. (Registered 27 June 2012)

£1,800 received for attending meetings as necessary and advising on business opportunities and risks. Hours: 6 hrs. (Registered 20 July 2012)

£1,800 received for attending meetings as necessary and advising on business opportunities and risks. Hours: 5 hrs. (Registered 21 August 2012)

£1,800 received for attending meetings as necessary and advising on business opportunities and risks. Hours: 6 hrs. (Registered 2 October 2012)

£1,800 received for attending meetings as necessary and advising on business opportunities and risks. Hours: 5 hrs. (Registered 29 October 2012)

£1,800 received for attending meetings as necessary and advising on business opportunities and risks. Hours: 5 hrs. (Registered 21 November 2012)

£1,800 received for attending meetings as necessary and advising on business opportunities and risks. Hours: 7 hrs. (Registered 24 December 2012)

£1,800 received for attending meetings as necessary and advising on business opportunities and risks. Hours: 6 hrs. (Registered 29 January 2013)

£1,800 received for attending meetings as necessary and advising on business opportunities and risks. Hours: 7 hrs. (Registered 22 February 2013)

£1,800 received for attending meetings as necessary and advising on business opportunities and risks. Hours: 8 hrs. (Registered 25 March 2013)

£1,800 received for attending meetings as necessary and advising on business opportunities and risks. Hours: 6 hrs. (Registered 16 April 2013)

(Note Fidelity now appears as 'FIL' rather than 'Fidelity' both here or when making donations).

I think in the old days we used to describe MPs who were supported by individual unions as "sponsored"...

Fidelity still funding the Tories

Another £25,000 donated in April, search for "FIL Holdings Ltd" on the Electoral Commission site.

As I blogged previously, Fidelity have changed the name under which they make donations several times. Surely not embarrassed?

On the trail of a big Tory donor

Readers of long standing may know that I've blogged a fair bit in the past about the financial and political relationship between asset manager Fidelity and the Conservative Party. On the Peter Cruddas scale, Fidelity are a "Premier League" donor. For example, they gave the Tories £300,000 in the year running up to the 2010 general election. Last year they gave them £100,000. They also employ the MP Srir John Stanley as a consultant. (They also chucked £50,000 at the No2AV campaign in 2011).

Oddly, over the years the way that Fidelity donates to the Tories seems to have changed. So up to 2008 they were listed as "Fidelity Investment Management" with the company reg number 2349713 or sometimes 02349713. 

But from 2008 to the start of 2012 they started appearing as "FIL Investment Management", again using the same company reg number. Then, for the remainder of 2012 (three donations of £25,000), they appeared as "FIL Holdings", using the company registration number 6737476. 

Since the start of 2013, however, there have been no donations have been reported using any of the previously used names or company registration numbers. Maybe they've stopped, or maybe they are reporting under a different name and company registration number? Or maybe they just didn't donate in Q1? Anyway, I'm keeping an eye on it.

Fidelity Tory funding update

It's been a long time since I blogged about Fidelity. They are still funding the Tories - according to the Electoral Commission register Fidelity gave them £100k last year, and according to They Work For You they continue to employ Sir John Stanley as an adviser (looks like he got about £20k off them last year). They don't seem to have sponsored any more Enterprise Forum events.

Fidelity update

It's been a while since I've blogged about the Fidelity-Tories interface, so here's a quick round-up of cash donations etc since May 2010.

Direct cash donations from Fidelity to the Tories (you need to search for 'FIL' as the donor name on the Electotal Commission register) declared since the election stand at £150k. This compares with £300k donated in the year up to the election. Fidelity also donated £50k to the No campaign in the AV referendum last year, though obviously that was not a Tory-only campaign.

Fidelity also continues to employ Sir John Stanley as a consultant at £1,800 a pop. He's declared 23 days consulting with them since the election, totalling £41,400. In comparison, median annual full-time earnings are now abour £26k. According to the register of members' interests, the payments are for "attending meetings as necessary and advising on business opportunities and risks". To put in context, Sir John is MP for Tonbridge and Malling, and Fidelity's HQ is (still, I think) Tonbridge. So you may not think it's unreasonable that he works with a large local employer.

Finally, Fidelity has also sponsored a meeting of the Conservative business liaison group the Enterprise Forum:

Thursday 12 May 2011
Pension Reform
Breakfast Briefing
Steve Webb MP - Minister of State for Pensions
Kindly sponsored by Fidelity International

Again, to be fair all kinds of organisations get involved in this kind of activity, though I wonder if Fidelity also supports similar Labour events? 

Political donations & shareholders

1. Big vote last week against EnQuest on the resolution seeking authority to make political donations. It was 30% against, which is waaaay above average. But in this case there was a reason, as the company gave the Tories £8,500.

2. Latest Electoral Commission disclosures reveal that Fidelity is still funding the Tories, with another £25,000 handed over in Feb. Search for "FIL Investment" here.

Fidelity provides post-election Tory cash

A further £25k donated to the Tories in August. Search under donor name 'FIL' here. Will have a look at sponsored MP John Stanley's consulting fees later.

Fidelity's pre-election donation

Just to note that Fidelity gave the Tories a further £150K in February this year. Search under 'FIL Investment' in the donor name field on the electoral commission register. According to the commission's records, Fidelity has given the Tories about £825,000 since 2004. That doesn't include payments to Tory MP John Stanley who has done 4 or so days' worth (38 hours) of consulting for Fidelity between November and April.

Fidelity donates £125K to the Tories

Woah! Where did that come from? After a long period of relatively small donations (£25K or £30K a quarter), Fidelity gave the Tories £125K this September. Search for "FIL" under "donor name" here. Maybe it's a sign that they think the Tories have the election in the bag? Who knows.

According to a Bloomberg report it's because: "We see donations as part of our ongoing business activities... We live in a very highly regulated environment. Government has a big impact."

Fidelity has also been getting a few days out of MP Sir John Stanley recently. According to They Work For You he has spent about 3 full days (25 hours) "attending meetings as necessary and advising on business opportunities and risks" since July. To be fair, this might just reflect improved disclosure (he didn't used to disclose either the fee level or the amount of time spent working for Fidelity).

Fidelity is still funding the Tories

I had thought that Fidelity had stopped funding the Tories. Afterall, if you search for 'Fidelity' in the Electoral Commission register of donations the last entry is for £30K in May last year.

But this week, whilst looking at something completely different, I stumbled across the fact that they are indeed still funding the Dark Side, only they don't use the name 'Fidelity' anymore, the cheeky scamps!

Try searching the register for 'FIL'. You should pick up a donation from FIL Investment Management for £30K in September last year, and a further £25K this June. The address is clearly Fidelity's address, and, if you need more proof, the company registration number - 2349713 - is the same.

That takes Fidelity's total donations to the Tories since April 2004 to £550,000.

Fidelity and the Tories

It's been a while since I posted about Fidelity, mainly because they seem to have stopped funding the Tories (having given them £500k since 2004). But some links persist. Fidelity recently hosted an Enterprise Forum meeting on the future of financial services. It also still has its own sponsored Conservative MP - Sir John Stanley.