Unilever's 'junior stock' exposure

UNILEVER'S pension fund had more than 8% of its UK equity portfolio invested in companies worth less than £400m at the end of 1996, the High Court was told today. Unilever's counsel Jonathan Sumption QC said these junior stocks accounted for eight of the 39 companies held in the portfolio managed by Mercury Asset Management.

Carol Galley, who ran Mercury at the time, told the court on her fourth day of evidence that she did not know this then, but was not surprised to hear it today. Earlier, Galley had conceded the Unilever portfolio was 'one of the most focused' she had seen.

Questions about the degree of risk contained in the Unilever pension portfolio run by Mercury have emerged as central to the bid by the company to recover £130m of compensation from Mercury over the poor performance of the fund.

Galley also told the court that Mercury, which was paid more than £1m a year to manage the £1bn fund, did not believe the portfolio needed to be restructured to meet the terms of the new mandate awarded by Unilever in late 1996.