Invesco resolves investment trust dispute

Invesco resolves investment trust dispute

Invesco will continue to run the £150m Invesco Perpetual Enhanced Income trust after resolving a much publicised dispute with the board.

As FTAdviser has previously reported, Invesco had resigned as manager of the trust in a dispute over performance fees. It had been managed by the experienced duo of Paul Causer and Paul Read.

The board of the trust responded by advertising for a replacement fund manager and said the bids it received to manage the money were more attractive than the terms previously offered by Invesco.

Invesco then requested an extraordinary general meeting of the trust and said it would use it shares to seek the replacement of the chairman.

The Financial Conduct Authority (FCA) said it is investigating aspects of the situation.

But in a statement released to the market this morning (27 June), the board of the trust said Invesco would return as manager, and will abstain on certain votes at the AGM.

The chairman of the trust, Donald Adamson is to resign with immediate effect.

The performance fee has been scrapped.  The revised management fee basis of 80bps on first £80m of net asset value, 70bps on next £70m and 60bps thereafter.

The notice period at which the board can terminate the management agreement has been reduced to three months.

The board said the changes announced reflect the wishes of a large number of shareholders.

The announcement of the dispute had  caused the trust to trade at a discount to net assets, but the share price has risen more than 4 per cent this morning in light of the news.

In terms of performance, the trust has lost 9 per cent this year to 26 June, compared with a loss of 8 per cent for the average trust in the AIC Global High Income sector in the same time period.