Invesco Perpetual hits back in trust bust-up

Boxing Gloves

The war of words between Invesco Perpetual and an investment trust it manages reached a new pitch Monday with the fund manager taking aim at the “overly aggressive” negotiation style of the trust’s board.

In an open letter to shareholders of Invesco Perpetual Enhanced Income (IPE), Paul Read and Paul Causer, who recently resigned as managers of the trust, set out the reasons for their resignation.

Read more: Invesco embroiled in a row with former fund after refusing to lower fees

They rejected the idea that Invesco had resigned from the management of the trust because of an argument over fees, instead blaming the board’s negotiating style.

“Our decision to resign was due to the breakdown of our relationship, as manager, with the board and our concerns about board governance. The manner in which the board engaged with Invesco in the fee negotiations was, in our opinion, overly aggressive, culminating in the issuance of a 48 hour ultimatum, served to us on the Monday of Easter week,” they said.

After its resignation as manger of the fund, Invesco, as a shareholder, alongside fellow shareholders Practical Investment Fund and Gam Star Credit Opportunities, requested a general meeting of shareholders and called for the resignation of the board’s chair Donald Adamson and the chair of its management engagement committee Richard Williams.

Read more: TalkTalk walk walk? Invesco filings baffle investors

IPE issued a letter from Adamson to shareholders today alongside a summary of the situation.

Adamson called the requisition a “cynical attempt to use Invesco’s concentrated voting power against small private investors”.

"This Invesco-led requisition, served against the board chairman who is retiring at or before the next AGM, and the one board member with extensive experience as a practitioner in fixed income investment management, is therefore considered by your board to be entirely vexatious in nature,” he added.

In its summary the trust noted that Gam had withdrawn its request for a vote and also said the Financial Conduct Authority (FCA) had asked it to provide information about the breakdown in relations between it and Invesco.

The shareholder meeting is taking place in Jersey on 20 July.

Full story: Invesco Perpetual hits back in trust bust-up: City A.M.

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