BP investments are mostly held in pension funds: Who will pay for the spill?

[Jeffersons Ghost]

Oil spill: BP shares fall 5% after Obama attack

Shares in BP fell a further 5% on Tuesday after US President Barack Obama launched his most strident attack yet on the oil giant.

The company - in which most of the UK's pension funds invest - has seen its shares tumble almost 40% since April's oil spill in the Gulf of Mexico.

President Obama said earlier he would have fired BP chief executive Tony Hayward over remarks he made. Some analysts have called for the BP boss to announce plans to step down.

http://news.bbc.co.uk/2/hi/business/10271012.stm

I have been informed by a fellow DUer that US Pension Funds are also controlled by BP:

"Shareholding in the USA and UK are almost identical @ c. 40% each. In the case of the USA JP Morgan Chase hold 27% of BP's entire stock. The great majority of BP shares worldwide are held in pension funds of some description. So its not just the retirement of UK's it will hurt those in the USA equally."

Having said that the actual drop in their shares is down to the March 2009 level. This affects their overall market value : not their balance sheet on which it has no bearing whatsoever.

Let me add that it has no effect YET.

[mdmc]

1. seems like many of us own BP stock after all

and we don't want to give up our cars..

[HereSince1628]

2. I'm only pretty sure where it will not come from...

and that place is executive compensation.

[Jeffersons Ghost]

3. i hope you're right

[Scuba]

5. Dreamer

[TexasObserver]

4. Many pension funds are no longer holding BP stock, for good reason.

What kind of pension fund manager wouldn't have unloaded their BP stock as soon as this gusher hit the news? Minimizing risk and stabling revenues are the job of the pension fund manager, and getting the funds out of inordinate risk is a key part of that job. If they failed to do their job, they should have bailed from BP earlier.

Anyone holding BP stock is out of their damn mind. Get as far from it as you can, and let the pension fund managers worry about the pensioners. They're paid well to do so.

While it is certainly true that pension funds invest in a broad port folio that typically includes such stocks as BP, the fund's manager has a job and that job is to cull the bad investments as soon as they appear to be a problem. The pension fund should not be taking the kind of risks an ordinary investor can make. They can't afford to take untoward risks, and that means culling stock such as BP when there's a disaster. Minimizing risk to pension capital is Job One for the Pension fund manager. Job Two is producing an even stream of revenues. There is no Job Three for keeping BP's stock value artificially high.

[Scuba]

6. You're assuming they're honest...

...my guess is that small investors will find out their funds were in BP but larger investors will find their funds were not.

Does that make me cynical or just a realist?

[Jeffersons Ghost]

7. so you're disputing the BBC news article?

Judging from the article plenty of fund managers decided to ride it out.

[TexasObserver]

8. Do you really believe the majority of pension funds are still invested in BP?

I suggest you stand back from this piece of what you believe to be journalism and ask yourself "what themes is this piece attempting to promote?"

Someone fed this story to the story's author, and they have a purpose. Their purpose is to convince people that pension funds are invested in BP, so you should want BP to succeed and you should not worry about BP stock losing value.

I never said all pension funds got out BP. Smart ones did. Big ones, however, such as those associated with major brokerage houses, were more cavalier. They tend to believe their own rhetoric, and some of them have ended up keeping their clients in bad investments because of it.

I don't believe the majority of American pensioners hold BP stock, I don't believe the majority of pension funds are still invested in BP stock, and I believe those who are still invested in BP stock are trying desperately to manipulate mainstream media with stories such as this one.