Lord Mandelson has called for a shake-up of takeover rules and a greater emphasis on long-term investing from fund managers and other institutional investors.
Delivering his Mansion House speech on Monday evening in London, Mandelson set out a number of changes that he would like to see made to takeover rules following Kraft’s £11.7bn hostile take-over of Cadbury.
The Business Secretary also stressed that “duty of engagement and long-term stewardship” must be central to fund manager thinking and said there is a case for making fund managers publish the terms under which they are paid and the goals they are working to.
Suggested changes to take-over rules outlined by Mandelson included raising the voting threshold for securing a change of ownership to twothirds of shareholders, lowering the requirement for disclosure of share ownership during a bid to 0.5 per cent from 1 per cent and greater transparency on advisers’ fees and incentives.
Turning to fund managers, Mandelson said their decisions may be skewed by short-term goals. He said: “The decisions about what to own and when are made by fund managers whose incentives may require them to deliver returns on short timeframes, even if they manage pensions for people whose key interest lies in the long term.”