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Perpetual in motion

In September, Perpetual unveiled its plans to launch into the group personal pension market, ahead of the £1.05bn takeover by US fund manager Amvescap.

The takeover deal was finally agreed at the start of last month but followed six months of stop-start talks and speculation. If all goes well, the deal will be finalised by Christmas.

Following months of uncertainty, Per petual&#39s pensions outfit is optimistically awaiting a positive IFA reaction to its new incar nation alongside Amvescap&#39s UK brand Invesco.

Invesco and Henley-n-Thames-based Perpetual will retain separate brand identities until the end of the next Isa season. From Jan uary 2001, a core range of funds from both the Perpetual and Invesco range will be laun ched and, with 14 funds overlapping, fund mer gers are expected.

Perpetual&#39s stated philosophy has been to recruit experienced fund managers with strong track records to work in six independent teams, split on a geographical basis.

It describes its investment strategy as aiming to combine top-down and bottom-up investment analysis. Follow ing the recent ann ouncement that Invesco and Perpetual will retain different brand identities, this looks set to stay.

Perpetual made a break for the corporate GPP market, intending the product to be a path-beater for money-purchase occupational schemes, as well as a stakeholder launch ahead of April 2001.

The GPP offers access to a variety of pension funds and unit trusts, a choice of life-style investment products and a “pay as you go style” charging structure.

The GPP also offers stakeholder style features, inclu-ding flexibility to allow for switching, transfers and red ucing or suspending contri-butions without being stung by penalties.

At the time of the GPP launch, Perpetual pensions development director Fiach Maguire said: “The Perpetual GPP has been designed to offer investors the dual benefit of our investment record and superior administration. Unlike many pension providers we have been able to structure and develop new systems around our pension product.”

The high-profile launch is aimed at repeating Amves cap&#39s success in the institutional market for 401(k) plans in the US, where it has been a major player for the last 12 years.

Based on its US experience, Invesco says it is well placed to make its mark in the post-stakeholder environment, believing it has prior knowledge of the shape of pension provision to come in the UK market.

IFAs may wonder whether the takeover with Invesco will water down the administrative slickness that Perpetual&#39s pensions have boasted to date.

Maguire says: “Invesco targets the institutional end of the market while we focus more on the mid-range with the GPP. The linking with Invesco broadens and deepens the range of services available to our clients.

“Invesco currently uses Scottish Life as its third-party administrator. This will not be disrupted in the near future, although in the longer term you might expect Inv esco to build on our administrative strength.”

But are IFAs convinced that Perpetual is worthy of their confidence in the group personal pension market? It has been reported that some IFAs see the bringing tog ether of players as big as Invesco and Perpetual as a messy process.

This may not inspire int-ermediary confidence at a time when more established group pension brands are falling over themselves to curry IFA favour.

Maguire says: “For the time being, we do not have the problem of integrating two back-office systems. We hope that IFAs will take comfort in the takeover now the ownership has been decided after the uncertainty and see the move as a strong commitment to the market.”

IFAs appear to be willing to give Perpetual their support throughout the merger.

Torquil Clark pensions development manager Tom McPhail says: “Perpetual still have a pretty good investment performance in spite of some drifting. It made a bold move into the retail pension market ahead of many of its competitors and its experience will stand it in good stead.

“The pension market more generally will focus much more on investment performance, perhaps at the expense of life offices, whose performances have not exactly been sparkling in the past.

“Perpetual has good people and although every merger has its problems and challenges, if you accept a brief hiatus it does not have to be a problem.”

Advisory & Brokerage managing director Gareth Marr says: “Arguably, other prov iders have overtaken Perpetual but the takeover by Amvescap could broaden the range of growth and value funds available.

“The merger also makes for improved financial str ength with Amv escap being one of the strongest investment hou ses in the world. In the end, a lot of this comes down to performance and, if anything, the takeover is not detrimental but will improve Perpetual&#39s performance.”


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