By Robert Stock The 6 April merger of the Invesco and Perpetual fund range, which will consolidate i...
By Robert Stock
The 6 April merger of the Invesco and Perpetual fund range, which will consolidate it to 33 funds and will see the implementation of core and growth options in the major equity markets.
Until 6 April the two fund ranges will retain separate identities.
Obtaining approval from unitholders means that the funds are unlikely to be physically merged until the last quarter of 2001, however on 6 April the funds will come under the management shown in the accompanying chart.
In order to avoid forced selling within the portfolios the managers will then have a substantial amount of time to realign portfolios before the physical merger, a strategy that Invesco used during its merger with GT.
The planned changes will see core and growth equity offerings for Europe, UK, UK smaller companies, US, Japan, and International.
The core offerings are designed to be less volatile by remaining closer to benchmarks, will have a greater number of holdings than the growth range, and will invest in a broader spread of sectors. The growth funds will offer a different risk reward profile and greater freedom for managers to move away from their benchmarks.
Mike Webb, chief executive of Invesco's retail business, said that the proposed merging of the two ranges reflects Invesco's desire to preserve the investment styles of both houses and retain and augment the existing fund management teams in Henley and London.
The combined fund range also preserves the UK equity income expertise of Neil Woodford of Perpetual and Graham Kitchen of Invesco in three UK equity income funds.
After 6 April Woodford will continue to run his High Income fund under the new name of Invesco Perpetual High Income and his Income fund under the name Invesco Perpetual Income. Kitchen will manage the Invesco Perpetual Income & Growth Fund.
Unlike the core and growth equity ranges, the equity income offerings from the two men differ principally because of their styles and at times the composition of the funds could be very similar.
All of the other high profile names at Invesco and Perpetual feature prominently in the range which includes 18 Standard & Poor's rated funds out of the total of 33 funds.
The merger will also give Perpetual access to Invesco's worldwide proprietary resear-ch. In European equities Rory Powe, Claire Griffiths and Margaret Rodden all head up funds.
In the UK Andy Crossley, David McGillveray, Jon Sweet, Robert Moss, and Stephen Whittaker form the team of named managers.
In bonds and fixed interest, Perpetual's Paul Read and Paul Causer feature as co-managers on every fund as well as managing the Invesco Perpetual Money Fund.
In the US arena a question mark hangs over the Invesco Perpetual US Core fund after the departure of Perpetual's Ian Brady, Grant Cowley and Philip Chappell to Schroders. The three, who made up the entire Perpetual US team, will continue to run the Perpetual fund for up to three months while Invesco makes a decision on who will manage it.
In total 10 Invesco funds and five Perpetual funds will be merged into the combined range including Invesco French Growth, which the group tried to close last year.
The charging structures of the two fund ranges will also be merged, although Webb said that the details could not yet be released. Initial charges for both ranges are typically 5.25%, although they vary between individual funds.
No decisions have yet been taken on the small offshore and investment trust business of Perpetual, although an announcement is expected in the next few weeks.
Two global vehicles
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