The Investor Forum – the new body charged with improving investor-corporate dialogue in the UK – was formally launched today, with the top two roles taken by senior asset management figures Simon Fraser and Andy Griffiths.
Fraser, the former Chief Investment Officer of Fidelity Worldwide Investment who currently chairs Foreign & Colonial Investment Trust, will chair the body that was proposed by Professor John Kay in his review of UK equity markets and short-termism.
Griffiths, the former Senior Vice President at US fund management giant Capital Group and deputy head of research with Prudential M&G Investment Management, will be the forum’s Executive Director. He is currently an advisor with Corsair Capital, the private equity firm that focuses on financial services.
“The Investor Forum will help facilitate better engagement between UK public companies and their shareholders to support long-term value creation opportunities,” said Fraser. Business Secretary Vince Cable said it was a “welcome step” towards more effective collective engagement by investors that would “bring about a shift in the culture of equity markets”.
The idea is that the forum will be independent of any trade association and be open to all investors, whether based in the UK or elsewhere, who have an interest in UK companies. A shareholder ‘forum’ has existed in one form or another in the UK since at least the mid-1970s with varying degrees of success and designations. Most recently, in 2011, the trade body-backed Institutional Shareholders Committee morphed into the Institutional Investor Committee.
The new forum is being formed following recommendations made by a working group formed by the trade bodies the Association of British Insurers (ABI), the National Association of Pension Funds (NAPF) and the Investment Management Association (IMA) that was chaired by Baillie Gifford partner James Anderson.Legal & General Investment Management’s Director of Corporate Governance Sacha Sadan headed up the forum’s ‘implementation team’.
It’s hoped that participants will be asset managers and asset owners such as pension funds, life assurers and sovereign wealth funds.
“Promoting cultural change throughout the investment chain”
There has been scepticism about how effective the forum could be, with some leading figures worrying it could turn out to be ‘talking shop’. Another criticism has been the lack of asset owner involvement.
Fraser and Griffiths will now finalise the forum’s constitution and operating model, and assemble its board and stakeholder groups. It is expected the forum will hold its first meetings in September.
One of the stated objectives is “promoting cultural change throughout the investment chain”. The body will form ‘engagement groups’ – where a “critical mass” of investors will seek to drive change at firms.
NAPF Chief Executive Joanne Segars said the forum could be an important development in facilitating effective collective engagement amongst institutional investors: “This vehicle for greater collaboration should further assist the focus on developing sustainable long-term value creation for asset owners and, in turn, pension savers.” The forum has the support not only of the investor bodies but corporates such as Pearson, Marks & Spencer, and Barclays.
It comes after the IMA (to be renamed The Investment Association) said it would merge with the Investment Affairs division of the ABI, which includes the IVIS voting advisory service.