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‘Sudden resignation’ by Invesco in fight over fees leaves trust hunting for new manager

The Invesco Perpetual Enhanced Income investment trust is weighing up bids from new managers after Invesco unexpectedly resigned from the mandate over a dispute around fees.

The board of Invesco Perpetual Enhanced Income Limited says it has received “a significant number of highly credible proposals” from investment managers wishing to take over the trust.

It has narrowed down four proposals in particular which it will investigate further. The pitches have been kept anonymous, but proposed charges range from 0.35 per cent NAV to 0.65 per cent NAV. Figures as high as 0.83 per cent were proposed by those that did not make the top four. No manager asked for a performance fee.

Management and performance fees paid to Invesco for the 2017 financial year amounted to 0.93 per cent, with around £12.3m paid to Invesco between 2007 and 2017.

While most managers showed significant experience with listed closed-ended investment companies, others had none, and fixed income assets at the companies submitting the top four proposals ranged from £11bn to $370bn (£279bn).

Invesco Perpetual Enhanced Income Limited says: “Every proposal received would result in lower management costs than those currently incurred by the company and indeed almost all the fee proposals are lower than those that the board thought it had agreed with Invesco before their sudden resignation.

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“The board intends to progress the process of appointing a new manager, and notwithstanding their previously indicated refusal to participate in an open and competitive process, the board would consider a revised fee proposal from Invesco in the context of a withdrawal of the requisition notice.

“The board believes the responses received fully vindicate its position that significantly more attractive management terms are available in the market from managers of comparable quality and standing to Invesco.”

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