Merrill Lynch Investment Managers (MLIM) has settled its dispute with the Co-operative Group, the ethical company that last year sought legal advice after its £2bn (€2.8bn) pension fund experienced a period of underperformance in the late 1990s.

The move follows a settlement for an undisclosed amount over similar claims brought by the J Sainsbury pension fund. In a UK High Court case in 2001, MLIM denied a charge of underperformance brought by the Unilever pension fund but settled for around £75m. The case centred on an alleged period of underperformance at MLIM during 1997 and 1998.