BP sacks savings fund manager
OIL GIANT BP has sacked UBS-owned Brinson Partners as manager of its $970m (£678m) employee savings fund after the portfolio suffered heavy losses on its holding of Enron debt.
The $2.5bn cash management fund, in which BP is one of several investors, incurred a 1.8% loss on the Enron debt. BP declined to comment on the reasons for the switch, saying only that it would place 70% of the money with an arm of State Street Corp and the rest with Fidelity Investments.
BP and its employers contribute to the fund on a one-for-one basis. The nature of the investment has prompted questions about why the fund had such a significant exposure to Enron, whose paper was viewed as being rated too low for this purpose.
Brinson is believed to have rejected calls for compensation. In December the fund wrote down the value of the $55m it had invested in two unsecured Enron loans. It sold the positions soon after.