ABI’s investment unit to join IMA

ABI’s investment unit to join IMA

The Boards of the Association of British Insurers (ABI) and the Investment Management Association (IMA) have agreed in principle to merge the investment activities of the ABI with the IMA.

The merger would include the Institutional Voting Information Service (IVIS), which provides advice to fund managers on how to exercise votes at company meetings.

The final stages of the discussion are ongoing. The merger, which is expected to be complete by the end of June, will ultimately lead to the creation of a trade body with a new name and chairman. It will cover the entire range of investment management activity with a “single, stronger and more coherent voice.”

The ABI said it will continue to represent insurers as asset owners. IMA chief executive Daniel Godfrey said the IMA and ABI hope to sign an agreement in the next few weeks.

Speaking to Global Investor/ISF, Godfrey explained that the IMA always evaluates how any structural changes such as this fits in with its purpose as a trade association.

“Our purpose is to help our members do really important things for real people in the economy. We do that if we can deliver good investment returns over long periods of time. Real people have investment horizons that tend to be measured in decades.”

Godfrey said the integration of the ABI’s investment activities with the IMA would help to achieve that purpose because “good stewardship, good engagement, and efficient capital markets are all really important in delivering sustainable long-term returns”.

Some of the IMA’s biggest members are insurance companies. The IMA’s members have total AuM of around £4.5trn ($7.5trn) of which £1trn is insurance company money.

“The IMA has been doing a lot of work with the ABI and UK National Association of Pension Funds (NAPF) to improve culture around long-term thinking in the ecosystem, which means asset owners such as insurance companies and pension funds, and asset managers like our members and the corporates they invest in.”

The ABI has naturally built up capacity in investment affairs in recent years. The division looks at governance and stewardship issues, and also market issues such as initial public offerings, rights issues and allocations.

Godfrey said that bringing ABI’s division into the IMA will create a “stronger, more unified, consistent, and joined-up voice”.

“We’ve always said that the people making the buy and sell decisions - portfolio managers – can’t be divorced from the stewardship and engagement. So it made sense to bring the two together.”

Godfrey will continue to act as chief executive of the IMA, and the chairman of the new trade body is expected to be appointed by July. The chairman will replace Dougie Ferrans who had announced before that he would step down this year.

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