Standard Life

[WhipLash]

I’m just wondering if anyone here is a with-profits holder in Standard Life? What are your opinions on the float? Should they float or stay mutual? I received all the literature about a week ago but haven’t read it all or returned it yet. I’m not sure that claims of 6/7k for shareholders would be true, probably more like 2k or less for the smaller investor. What I do know though is the guy (name?) in Monaco who’s started all of this stands to earn 250k. A handy little earner for him indeed.

[Tony]

From previous floatations of such financial institutions in the UK, the short-term advantage is that all members will receive a number of shares in the company, usually in the range £2,000-£6,000, depending on certain factors. Long term though, the ex-mutual society usually ends up with decreased returns on investment. That’s not a very desirable result if you’re a serious long-term investor with the institution.

[Anders]

I have a pension fund with them. If I get a bunch of shares that I can sell I'll go for it. I was gonna pull out of that pension fund anyway, so I don't really care where they are headed after demutualisation.

[Tony]

That’s a rather gung-ho attitude you have there Anders. Its all well and good taking that stance, but what if your pension was a serious investment with Standard Life and voting for de-mutualisation meant you be receiving diminished returns? I'm sure you wouldn't be too happy about it then. But you’re dead right to want all you can get if you’re pulling out anyway. There are some people, however, who cannot think past the short term, and will incorrectly vote to de-mutualise, collect their shares, and then complain several years later about the drop in their returns on investment.

[Anders]

I'm thinking the shares will somewhat make up for the abysmal performance of that pension fund. I'm in general very negative towards Irish pension funds because you pay a lot of charges and get f all for it. These funds are excited about achieving 9% per year. Even a monkey would have achieved 5 times that in the last couple of years.