Invesco Perpetual trust row resolved

A war of words between Invesco Perpetual and one of its investment trusts has been resolved following agreement to permanently lower Invesco’s management fees.

The agreement will also see the departure with immediate effect of Donald Adamson, chairman of the Invesco Perpetual Enhanced Income trust.

In a separate development, Richard Williams, chairman of the trust’s management engagement committee, has announced that he will stand down as director of the company with immediate effect.

The Jersey-registered trust said today that it would reappoint Henley-based Invesco as its fund manager after reaching agreement to permanently lower management fees on the same terms “as those agreed temporarily this year”.

The row over fees started in April when Invesco, one of the UK’s largest fund managers, announced it would step down as manager of the £153 million (€174 million) trust, which specialises in sovereign and corporate fixed income.

Invesco denied reports that it had refused to cut its management fees, countering that its decision to resign was because of the trust’s “overly aggressive” negotiating stance.

As a 17% owner of the trust, Invesco later called for the trust to hold an extraordinary shareholder meeting on whether to remove Adamson and Williams.

Under the agreement, a performance fee has been removed and the trust will pay 80 basis points on the first £80m of assets, 70bps on the following £70 million and 60bps thereafter.

A statement released on behalf of both companies said that the arrangement would be backdated to the beginning of the year.

The extraordinary general meeting, scheduled for July 20, will go ahead on the basis that Invesco has undertaken to abstain from voting on resolutions.

The statement said: “Invesco has also clarified to the board that whilst it has an overriding duty to exercise votes attaching to securities in client portfolios in the interests of those portfolios, it would not normally anticipate voting in respect of future IPE director elections and re-elections.”

The trust’s board will on an interim basis be led by the chairman of the trust’s audit committee Peter Yates until a replacement independent chairperson is in place.

©2018 funds europe

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