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Amvescap and Invesco raise Millfield holdings

Amvescap and subsidiary Inv-esco Perpetual have increased their holdings in Millfield to almost a quarter of the firm.

Last week, Invesco bought 100,000 shares in Millfield, increasing its holding to 19.06 per cent. Amvescap owns 5.05 per cent, giving a total group holding of 24.11 per cent.

Owning such a big percentage of the distributor means the better than best rule – which prevents IFAs placing business with provi-ders owning more than 10 per cent of their firm unless they can demonstrate it is the best product available – is in play and Millfield advisers will find it difficult to recommend Invesco funds and still comply with FSA regulations.

Bates Investment Services head of investment strategy James Dalby questions the investment, pointing to Inv-esco&#39s last quarterly briefing which showed that the Millfield Group was one of the five worst-performing stocks in its income fund.

In July last year, Invesco star fund manager Neil Woodford was criticised by IFAs when he pumped £10.5m into Millfield.

Millfield, which is mer-ging with Inter-Alliance, showed a fall in operating loss this year from £12.6m to £9.3m, with a 60 per cent rise in turnover from £26.1m in 2003 to £41.9m.

Invesco would not comm-ent on whether the investment is a move to buy up distribution.

Dalby says: “It is odd if Millfield is not selling Invesco funds as it is one of the top 10 retail fund houses and its high-income fund is the second-biggest retail fund in the UK.”

Bestinvest head of communications Justin Modray says: &#39This strikes me as a strange and high-risk investment.”

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