CGU launches Morley fund management

Article date: 16 March 1999

The London-based asset management division of the CGU Group islaunched today as "Morley Fund Management - a member of the CGUGroup", one of CGU's three core businesses alongside its life andgeneral insurance activities.

The merger of Commercial Union and General Accident to establishCGU in June 1998 created one of the world's largest financialservices groups which now has over £120bn of assets undermanagement. Some £45 billion is managed from London, of which about60% is in equities, 33% in fixed interest with the remainder inproperty and cash.

The Morley name is one with which CGU has had excellentperformance and commercial success in winning new business in theexternal pension fund market. Morley Fund Management's objective isto achieve performance with control: above-average returns achievedwith below-average risk.

Bob Scott, Chief Executive of CGU plc, comments: "Morley FundManagement's excellent performance across a wide range of funds isunderpinned by a disciplined, low-risk investment process. This,combined with the high quality of our staff and our standards ofservice, has been winning important segregated pension fundmandates at an impressive rate. With the CGU Group's globalresources behind it, Morley Fund Management now has the investmentresources, customer-led culture and expertise across all majormarkets and asset classes to develop as a leading internationalasset management organisation."

Notes to Editors

Outline of Morley Fund Management - a member of the CGUGroup

Head office: London, UK (1 Poultry, London EC2R 8EJ)
Representative: Alan Clifton, Managing Director

Morley Fund Management is the London-based asset managementbusiness of CGU plc. In July 1998 the investment teams ofCommercial Union Investment Management Limited, GA InvestmentManagement Services Limited and General Accident Managed PensionFunds Limited were merged following the merger of the CommercialUnion and General Accident groups. As the new business identity ofthe three companies, Morley Fund Management manages externalpension funds, institutional investment funds and mutual funds aswell as insurance assets for the CGU Group.

For regulatory and legal reasons Commercial Union InvestmentManagement Limited and GA Investment Management Services Limitedremain as IMRO regulated companies, and General Accident ManagedPension Funds Limited remains as both IMRO and PIA regulated forthe time being.

Key Facts

  • £45 billion is managed from London of which about 60% is inequities, 33% in fixed interest and the remainder in property andcash.
  • Over 300 clients.
  • In excess of 300 staff of whom 80 are directly involved inmanaging assets.
  • Over £6 billion institutional pension funds undermanagement.

Key objective

To build a global asset management organisation able to competesuccessfully for the largest, most demanding and sophisticatedclients.

Key attributes

  • a consistent, well understood and articulated investmentprocess
  • a superior investment performance record which meets ourclients' expectations
  • a low risk approach to investment
  • the highest standards of integrity and ethical behaviour
  • well trained, motivated and committed staff
  • expertise in all principal asset markets
  • accurate, reliable and cost efficient processing andtransaction support systems

Investment philosophy

Morley Fund Management's objective is to achieve performancewith control: above-average returns achieved with below-averagerisk.

Four key principles underpin this:

  • Top down. A clear strategy at all levels fromasset allocation to stock selection, derived from thoroughconsideration of economic factors and investment themes.
  • Growth. We generally favour "growth" ratherthan "value" stocks - although with a degree of pragmatism inchanging market conditions.
  • Collegiate. Managers work within and as partof a team. In this way we encourage flair, skill and commitmentwhile ensuring the exchange of ideas and information andmaintaining overall management control.
  • Risk control. We use a wide variety of riskcontrol methods at all stages of the investment process. Theseencompass asset allocation, sector selection and stock selectiondecisions. As a result we have an excellent track record which hasbeen achieved without undue risk.

Performance

Morley Fund Management: Institutional Segregated BalancedPension Funds Median vs CAPS Median (Total Assets)

To 31 December 19981 year2 year5 years
%pa%pa%pa
Morley Fund Management16.615.412.2
CAPS Median12.412.810.5
Outperformance+4.2+2.6+1.7
Decile111

Source: CAPS

Outline of CGU plc

CGU plc is the holding company resulting from the merger ofCommercial Union and General Accident on 2 June 1998. The mergerwas first announced on 25 February 1998.

The rationale behind the merger was to create a world-scaleinsurance group with a strong presence in European life andsavings, a major asset manager and a leading position in generalinsurance.

The Group has a strong market position in the UK, ContinentalEurope, North America, the Asia-Pacific region and a number ofemerging markets. CGU plc is now one of Europe's largest insurancegroups.

An international group with operations in over 60 countries, CGUplc employs approximately 20,000 people in the UK and a further32,000 overseas.

Morley Fund Management is a business name of Commercial UnionInvestment Management Limited (Registered office: St Helen's, 1Undershaft, London EC3P 3DQ), GA Investment Management ServicesLimited (Registered office: 1 Poultry, London EC2R 8EJ), bothregulated by IMRO and General Accident Managed Pension FundsLimited (Registered office: 2 Rougier Street, York YO1 1HR)regulated by IMRO and the Personal Investment Authority. All areCGU Group Companies.

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