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Tales of the river bank

Philip Scott joins the fund managers of Invesco Perpetual at their tranquil Henley-on-Thames headquarters to find a culture very much based on the maxim: ‘If it ain’t broke, don’t fix it’.

Invesco Perpetual has a very definite philosophy about investment – that it has no philosophy.

Money Marketing visited the firm at its oasis in Henley-on-Thames and after speaking to a number of the UK equities team, it becomes clear that there is not a group investment philosophy. “And that has always been very deliberate,” explains group marketing director Rick White.

He says: “This is one of the things we have always said, which is why we always have to be very careful with meeting people. We believe it is an area which differen-tiates us from other organisations and we see it as a strength.”

But if there were to be a group maxim, it would probably be on the lines of: “If it ain’t broke, don’t fix it.”

When questioned on what Invesco Perpetual could be better at, White asserts that the group is content with its lot. It has assets totalling around 17bn in retail mutual funds and the group is the second-biggest retail manager in the UK behind Fidelity.

White says: “If you look at our core product areas, for example, UK equities and corporate bonds, which have been very successful for us, there is very little that we feel we need to do to extend or improve upon. The consistency of our long-term performance shows we are achieving very good investment results for clients and we want to continue to do that.”

There are no planned forays into popular investment styles such as fund of funds or multi-manager. White says this is a question which is put constantly to group chief investment officer and chief executive Bob Yerbury. He says Invesco Perpetual has fund of fund prop-ups but they are fettered schemes and this peripheral involvement in the multi-manager arena suits the firm fine.

“We are satisfied operating fund of funds at that level. Where we do not believe we can add significant value as an investment house is in selecting funds which are not managed by our fund managers. That unfettered space is a universe in which we feel we really do not wish to compete,” he says.

But White stresses that the group will always listen to client opinion and demands.

“The key objective is to stick to our knitting. We know what we are good at and what we want to ensure is that we do not get distracted by the latest fad but continue investing in our business and delivering the results expected from us. We will obviously always pay attention to what key clients are telling us about our investment products and how we are performing and if they feel that we ought to be looking at a particular sector,” he says.

White believes the appeal of the firm is having a well-spread product range that is understood by advisers and being able to demonstrate strong long-term investment performance. He says: “IFAs have over the years felt that an organisation like ours can deliver results and are prepared to support us more when perhaps some other organisations have fallen by the way.”

Distribution is focused on the adviser market. White sees intermediaries’ position strengthening and points to data from the Investment Management Association showing a trend in terms of adviser sales rather than the direct or tied channels.

“Following a number of difficult years for investors, be they investment managers, advisers or consumers, we are now certainly witnessing some strong evidence that generally investor sentiment is picking up and we as a group are seeing a lot more business coming from advisers than for some while,” says White.

With regard to the debate over performance-related fees, White says Invesco Perpetual has found no real demand from retail customers for performance fees. He says: “I think, like most other providers in this space in the market, we feel that the existing fee arrangements that apply work well on both sides.”

Invesco Perpetual’s bonus and remuneration scheme for fund managers does have a direct link to investment performance, being weighted strongly towards their longer-term performance.

A-Day is expected to open up an abundance of opportunities for organisations such as Invesco Perpetual, providing routes to develop distribution channels but, unlike fund firms such as Jupiter, Invesco Perpetual has no plans to launch its own Sipp.

White says: “With the emergence of Sipps, that sector is going to become much bigger for us. We will not become a provider of Sipps directly but we are very happy to provide the investment component within a Sipp wrapper wherever that service is delivered by another party, whether it is a life company, a network or some other provider.”

White believes there is too much regulation and the problems are coming not just from the UK but also from Europe. “We think there could be more thought, more consultation with the industry generally than there has been in the past, particularly before things from continental Europe emanate in our direction. Mifid would be a good example of that.”

He says the key objective for developing the business over the next three to five years is to continue doing exactly what it is doing today. “We want to continue to deliver value to our clients and ensure this is a repeatable process which will continue. I think if we do that, we will continue to grow assets under management, deliver results for our clients, be they the end-consumer or the IFA, and continue to build a profitable business for shareholders.”


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