Investments 

Four firms vie to manage £150m ex-Invesco trust

Four firms vie to manage £150m ex-Invesco trust

Four managers have lodged expressions of interest in managing the investment trust formerly known as the Invesco High Income.

As FTAdviser previously reported, Invesco resigned as the management company for the trust following a dispute with the board over fees.

Investment trusts are investment funds listed on the London Stock Exchange, they have boards of non executive directors whose role is to act in the interests of shareholders. The board appoint the fund management company, and also the companies to perform marketing, PR, and administrative functions.

The board of the Enhance Income trust, which is a fixed income fund, reported in an announcement to the stock exchange this morning (29 May) that they have bids from for firms to manage the money.

The fee level at which each of the four firms are seeking to manage the money vary from 0.35 per cent to 0.65 per cent. The firm that has offered to manage the trust for 0.35 per cent a year has no previous experience of managing an investment trust.

The previous fee level was as high as 1 per cent. None of the firms to have bid for the trust want to charge a performance fee.

The board of the trust said the decision to dispute the fee level for the trust has been “vindicated” by the fact it has received offers to manage the trust at a lower fee level than was previously the case.

None of the firms who have bid to manage the trust are seeking a performance fee. The board of the trust welcomed this, saying performance fees incentivise risk taking, which may not be in the interests of shareholders.

David.Thorpe@ft.com

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