17 August 2007
One of the Local Government Pension Scheme's biggest investment managers was this week accused of a potential conflict of interest over a £360,000 donation to the Conservative Party.
Information published by the Electoral Commission shows that Fidelity Investment Management donated the money to the Conservatives in eight instalments since April 2004.
Fidelity holds mandates to invest local authority pension cash on behalf of at least 11 councils, some Tory-led.
John Gray, chair of the Greater London LGPS Trustee Network, told Public Finance that Fidelity had 'acted outside the spirit of political non-affiliation preferred by the National Association of Pension Funds'.
LGPS observers and Unison members, he said, were concerned that donations to a party that might run councils with assets managed by Fidelity 'could be a conflict of interest'. LGPS observers are appointed as scheme member representatives.
Gray said: 'Fidelity will be pitching its services to Conservative-led councils. It's not something that a large investment manager should be up to and it sends out the wrong messages to LGPS members about how their retirement money is managed.'
Peter Yandle, Fidelity's executive director of communications, said: 'We strongly deny such accusations. These donations are open and transparent and they adhere to all rules on political donations.
'Additionally, politics and investment management are viewed here as entirely separate issues and there is no connection between our donations and our business practices.'
Yandle said that Fidelity was 'generally non-partisan', but confirmed that the company makes no other political donations in the UK.
The authorities that have given mandates to Fidelity include the Conservative-led London Borough of Bromley and the county councils of Buckinghamshire, East Sussex, Norfolk and West Berkshire.
Sue Whittaker, leader of the Labour group at Conservative-led Norfolk County Council, said she was 'concerned', but Daniel Cox, its Conservative leader, told PF he was 'confident' that there was no conflict of interest.
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