Case | HBS Case Collection | July 2002 (Revised August 2003)

Unilever Superannuation Fund vs. Merrill Lynch, The

by Andre F. Perold and Joshua Musher

Abstract

In 2001, the Unilever Superannuation Fund sued Merrill Lynch for damages of 130 million British pounds. Over the period 1977 to 1998, the Unilever Fund had significantly underperformed the benchmark, and its trustees contended that the poor returns resulted from negligence by the fund manager, Mercury Asset Management (which Merrill Lynch had subsequently purchased). In response, Merrill/Mercury argued that although they may have made some poor judgments, they had not been negligent, and abnormal market circumstances had been the cause of the underperformance. The court case was expected to have ramifications for the entire pensions industry.

Keywords: Investment; Lawsuits and Litigation; Performance Evaluation; Agreements and Arrangements; Customer Relationship Management; Risk and Uncertainty; Asset Management; Risk Management; Legal Liability; Financial Services Industry; United Kingdom;

Citation:

Perold, Andre F., and Joshua Musher. "Unilever Superannuation Fund vs. Merrill Lynch, The." Harvard Business School Case 203-034, July 2002. (Revised August 2003.)