Alistair Lennard, who was responsible for the Unilever portfolio that is now the subject of a £130m (€213m) lawsuit between Unilever and Merrill Lynch Investment Managers (MLIM), has provided the court with insight into how he reached investment decisions which cost Unilever dearly.

He told Jonathan Sumption, QC for Unilever, that the technique of adding individual sector divergences was too simplistic to give a useful insight into a portfolio's riskiness. For example, he said, holding stocks in the property sector should hedge the risk of holding no stocks in the banking sector, at least partially, because they generally react to changes in interest rates in the same way. Accordingly, he considered that he had exactly offset his decision to hold nothing in banks by his significant overweight position in property.