Money managers under the microscope
Spare a thought for the UK Pensions Regulator: is losing its CEO next month (to a new agency set up to educate the UK public on money and financial matters) right at the time when its actions will be scrutinised.
Iberia and BA are telling the markets they want to merge, but the 3.7 billion pound BA pension deficit is also telling one or two things to the shareholders and investor squad. That is why what the Pensions Regulator says to BA’s plans to face the pension black-hole is very important.
Will it approve the plan? Will it require more cash? Will Iberia stomach any additional contributions?
Whatever it does, the regulator is bound to attract criticism and in the full glare of international publicity: if it asks for more assets and Iberia leaves, it will be blamed for scuppering the deal. If it agrees to the BA recovery plan, some will say it let the air carrier off the hook.
Warren Buffet may think Kraft isn’t doing a good deal by taking over Cadbury. With Kraft shares falling, Cadbury’s shareholders may not think the deal too sweet either and some disgruntled British consumers may be appalled that a much loved brand will be sold to a non-British group – and one that sells chocolate symbolised by a lilac cow at that.
But one party is sure to get a good deal: the Cadbury pension fund trustees.
While Cadbury fans are digesting the takeover news, the trustees have lost no time in seeking a dialogue with Kraft to make sure they do get a good deal for the workers they represent. Call it fiduciary duty if you like but be sure pension trustees, used to a sponsor that “stood behind the pension fund for more than a hundred years”, will give Kraft a hard and cold look to assess its credentials as a sponsor – what the pension industry calls in vaguely biblical terms “the covenant”.
Hedge fund stories from the past 24 hours from Reuters and elsewhere:
Renaissance CEO Simons to retire – Reuters
Swiss bank fund of funds adds Harvard chief risk officer – Finalternatives