It took Mercury Asset Management five months to mull over the risk levels of the underperforming pension portfolio of Anglo/Dutch consumer products giant Unilever.

Peter Stanyer, head of risk management at Merrill Lynch Investment Managers (MLIM) (formerly Mercury) admitted the delay on his third day of cross-examination at London’s High Court yesterday [Tuesday]

Acting on behalf of Unilever, Jonathan Sumption QC asked Stanyer what extra knowledge he gained after January 1997 which meant that it was not until May that the risk level was seen to be too high. Stanyer answered: “I think that probably the honest answer is the passage of time, the evolution of opinions and just a sinking-in.”

Furthermore, in 1996 Mercury failed to predict the extent of the fund’s future underperformance despite the accessibility of information to suggest it.

Unilever has sued MLIM for £130m (US$184m), accusing the fund managers of negligence during the time they controlled part of the company’s pension fund.