Invesco has announced it will no longer manage the £150m Invesco Perpetual Enhanced Income trust after it failed to agree a fee structure with the board.
The board of the trust announced to the stock market this morning (23 April) that Invesco had sent it a letter announcing it would terminate the investment management agreement.
The board of the trust said the announcement comes despite it having made “detailed and extended” efforts to reach an agreement on the fee it pays Invesco to run the trust.
The board said it has now appointed JP Morgan Cazenove to find a replacement for Invesco Perpetual.
Invesco’s notice period is one year. The board said it believes it can get better terms from suitably qualified managers at other firms that it has been paying to Invesco.
The trust is managed by Paul Causer and Paul Read, who have been running it since 2004, and Rhys Davies, who has been a named manager on the trust since 2014.
Mr Causer and Mr Read together manage a range of bond funds at Invesco.
The trust has returned 75 per cent over the past three years to 23 April, and has a yield of 6.2 per cent and trades at a premium to net assets of 8 per cent.
Data from FE Analytics shows the total fee paid by investors in the trust is 1.17 per cent.
Investment trusts have independent boards of directors, who then subcontract out the investment management and all other functions to various companies.
Under the current managers, the trust invests in bonds, with the largest exposure being to bonds with a credit rating below investment grade.