Ex-Invesco trust chairman quits board

Ex-Invesco trust chairman quits board

The attempt to remove Invesco as manager of the Invesco Perpetual Enhanced Income trust has resulted in the trust’s former chairman, and another director, resigning, having received criticism for their handling of the matter. 

The board of the £145m Invesco Perpetual Enhanced Income trust were in dispute with the trust’s investment manager, Invesco, about the fees payable by investors in the trust.

The dispute culminated in Invesco returning as manager, but without the performance fee and with a shorter notice period, meaning the board could more easily replace Invesco if it wished.

As a result the chairman of the trust, Donald Adamson, resigned as chairman and as a director.

At an extraordinary general meeting vote held on Friday (20 July) the majority of shareholders abstained and the vote did not support removal.

Richard Williams, whose role had been to manage the relationship with Invesco, also resigned from the board.

Earlier this month FTAdviser reported that the premium at which the trust trades to its net asset value had halved since the dispute between the board and the investment manager began.

Peter Yates, the trust's new chairman, said: "The board is pleased by the outcome of today’s general meeting, and wishes to thank shareholders for their support. It is an encouraging demonstration that retail and smaller shareholders can play an active role in corporate governance and make their voices heard.

"We now look forward to [the trust] being able to focus fully on continuing to deliver value and outperformance for its investors."

Guy Foster, head of research at wealth manager Brewin Dolphin said the fees on the trust were "high", so the board was sensible to seek a reduction.

He said the performance fee structure encouraged "excessive risk taking".

Two other investment trust professionals, speaking on condition of anonymity to FTAdviser, agreed the board was correct to seek a lower fee, but were critical of the board’s decision to then seek a cut to the notice period.

The Invesco Perpetual Enhnanced Income Trust is managed by bond fund managers Paul Cause and Paul Read. It has returned 0.17 per cent over the past year.

This article was corrected on 23 July. The extraordinary general meeting did not result in Donald Adamson and Richard Williams being sacked from the board. They had resigned prior to the shareholders' vote, which did not support their removal. We apologise for the error.