Fidelity Investments funds the Tories

According to the Electoral Commission website, fund manager Fidelity Investments gave the Conservative Party £40,000 in February this year. Overall in the past three years they have given the Tories over £350K. To check it out use the website below -

http://www.electoralcommission.org.uk/regulatory-issues/regdpoliticalparties.cfm

I am not a Conservative supporter (!) but I don't think that fund managers should donate to ANY political parties. Political donations of this kind are no no in the corporate governance world, and many fund managers vote against companies they invest in when they try to do exactly this.

Worth checking out if your pension fund has any relationship with Fidelity. Let's try and get them to get rid of this partisan political stance - or lose our business.

Fund managers claim to be transparent

According to the Investment Management Association (trade body for the UK asset management industry) fund managers are becoming more
transparent in respect of voting and engagement activity. Its annual
survey of fund manager engagement was published this week and is worth a read. You can download it here. It should really be read alongside the recent TUC and LAPFF reports.

Here’s some of the IMA’s blurb:

*FUND MANAGER TRANSPARENCY CONTINUES TO INCREASE*

IMA's latest annual survey on fund manager engagement with companies shows that the level of transparency is increasing. The survey is the most comprehensive of its kind covering 33 firms, managing £640 billion of UK equities, representing 68% of the market. The trend is increasingly for engagement to be integrated into the investment process, complemented by regular dialogue with senior management and monitoring which allow firms to vote and engage objectively on an
informed basis.

All 33 firms in the survey have a policy to vote all their UK shares.
All now report to clients providing explanations of their decisions - especially when they have voted against the Board - together with details of engagement other than voting.

Firms are also increasingly making details of voting and engagement public by putting them on their websites with 16 currently doing so (representing 53% of the sample in terms of ownership of UK equities), and others planning to do so in the future.

Other survey findings include:

* all the firms have policy statements on engagement, 26 of which are made public on their websites;
* 24 firms include their policy on voting in both new and existing agreements, compared to 21 in 2005 and 19 in 2004;
* engagement is integrated into the investment process - in 18 firms final voting decisions on controversial issues are taken at a senior level and in a further 14 the portfolio managers are actively involved;
* the majority of firms have staff dedicated to engagement with these resources increasing by just over 5% over the last year and in the previous two years by just over 10% per year; and
* 27 firms provided details to IMA on how they had voted which showed that there are fewer votes against the Board or conscious abstentions than in previous years, suggesting that regular engagement is improving understanding between companies and investors.

Two plugs

Super-quick update to plug the rather good GMB pensions site here.

And John Gray's ace post on workers' capital here.

US union investor group dislodges CVS/Caremark director

I blogged a while back about the Change to Win campaign against Roger Headrick. Having provoked a significant shareholder rebellion against Headrick, the CtW Investment Group had called for him to step down. And now they've finally got their man -

July 3: CtW Investment Group Statement on CVS/Caremark director Headrick’s resignation

Last night, CVS/Caremark shareholders succeeded in removing embattled director Roger Headrick from the company’s board of directors and, in so doing, holding him accountable for his past failures to protect Caremark shareholders. As lead independent director and audit committee chair at Caremark, Mr. Headrick bears principal responsibility for approving a sweetheart deal with CVS that nearly cost shareholders $3.3 billion and for the ongoing DOJ and SEC investigations into possible stock option backdating.

Mr. Headrick’s resignation required extraordinary efforts after the CVS/Caremark board initially failed to respect the shareholder vote in its May 9 director election. In addition to communications from major institutional shareholders—including the California Public Employees’ Retirement System, New York City Comptroller William C. Thompson, Jr. and North Carolina State Treasurer Richard H. Moore—members of the House Committee on Financial Services questioned SEC Chairman Christopher Cox regarding the impact of the broker vote on Mr. Headrick’s tainted election during last Tuesday’s hearing on investor protection and market oversight.

The adoption of majority vote standards in director elections by hundreds of companies, including CVS/Caremark, should finally make director elections meaningful. The extraordinary measures required to remove Mr. Headrick, however, underscore the need for swift SEC approval of the NYSE proposal to eliminate the broker vote in all director elections to ensure their integrity going forward.

NAPF defends private equity tax treatment

There's a particularly craven letter from the NAPF in today's FT about the taxation of private equity partners. Read it here.

The broad messages are:

"what do we care about the growing wealth gap".

A successful private equity manager takes home amounts that are often 10 and sometimes 100 times what a middle-ranking executive earns in a public company, let alone the cleaner. Such sums are an easy target for the envious (and that means most of us, at least some of the time), but irrelevant to institutional investors.

"we have no choice but to hand over your money to these brilliant people"

in a world awash with financial capital, those of us with nothing else to trade must pay up for access to the intellectual capital of the best groups.

and "did we mention how weak at the knees we go in the face of these amazing business giants"

our chief regret is that we find it difficult to keep enough money invested. General partners' habit of giving our money back to us, before we have another use for it, is inconvenient for us, but evidence of their sharp focus. We need them on our team.

Pass the sick bag.

Schroder climate change fund

Just spotted this, though it's a few weeks old. First retail investment fund I have seen that focuses on climate change.

Schroders announces the launch of the Schroders Global Climate Change Fund which opens to investors in September 2007*. The fund is the first of its kind in the UK, offering investors exposure to companies involved in mitigation of (measures to reduce carbon dependency), or adaptation to (changes to adapt to the consequences of), the effects of climate change on a globally diversified basis.

The aim of the Schroders Global Climate Change Fund is to provide long term outperformance of the MSCI World Index from a concentrated portfolio of 50 to 80 stocks comprising the best stock ideas from the fund’s joint managers, Simon Webber and Matthew Franklin.

Stocks will be selected and weightings determined independently of the Index.

Simon Webber, Joint Fund Manager of Schroders Global Climate Change Fund commented: “Investors simply can’t afford to ignore the realities of climate change. Across all sectors, climate change will have a broad and lasting impact along the value chain. For the mainstream equity investor, now is the time to adopt a global approach to what will be a major investment theme for the foreseeable future. Crucially, Schroders has the capability to take a global approach to a global challenge – enabling us to identify the broadest possible opportunity set”

Schroders has established a proprietary database of companies where the effects of climate change have a significant impact on the long-term investment case. Having established the investment universe, the team will focus on the very best ideas that have been identified by Schroders global equity team and locally based equity portfolio managers and sector specialists.

Simon Webber and Matthew Franklin (Joint Fund Managers) will be supported by a team of climate change specialists, global sector specialists as well as Schroders’ wider global network of 80 experienced large and small cap analysts.

Mike O'Brien is new pensions minister

According to press reports last week Mike O'Brien is our lastest pensions minister. See the Indie for example.

Here's his entry on They Work For you.

And this bit on The Grauniuad website.