IMA urges reformers to focus more on investment banking

Michael Bow
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THE Investment Management Association, the fund manager lobby group, yesterday called for investment banks to face more scrutiny to prevent poorly judged merger and acquisition deals.

The group said last month’s government-backed review into equity markets, led by economist John Kay, missed an opportunity to focus on the role of investment banks in botched M&A deals.

Kay’s report said UK corporate governance failures could have been prevented by more engagement from asset managers to vote down bad deals.

But IMA chief executive Richard Saunders said investment banks held more sway over such deals and should have faced more scrutiny in the report.

He said: “I find it puzzling that the report focuses on the asset management industry – particularly given the initial diagnosis of poor merger strategy leading to corporate failure.

He added: “I for one would have liked to see a little more focus on the role of investment banks.”

IMA corporate governance director Liz Murrall added: “The Kay Review was a missed opportunity. It fails to look at M&A deal and how they could have been motivated by investment bank strategies.”