After courting Amvescap for a period longer than many marriages last, Perpetual looks like it is fi...
After courting Amvescap for a period longer than many marriages last, Perpetual looks like it is finally getting to the alter.
Ever since M&G was bought by Prudential in March 1999 the future of the Henley-based group has been a matter for speculation and this has coincided with a period when its fund performance has been a little off the boil.
If the extended honeymoon period of consistent outperformance Perpetual provided in the early 1990s has come to an end there remains the question of what the Invesco link up means for all those who have put their clients into Perpetual funds over the years.
Its High Income unit trust has £2.3bn, Income some £682m and UK Growth around £1.19bn. Not a lot in global terms but a tribute to its success in the UK retail market over the years.
The Perpetual brand will remain for the forthcoming Isa season but whether preserving a narrowly focused UK retail brand is a priority for a global business which has spent heavily on its own UK profile remains to be seen. At a guess this is not top of Charlie Brady's list and the bride and groom will end up with the Invesco surname.
Brand aside there is the going to be usual issue of which house the new couple end up in. Investors are going to be wondering about the relative merits of Henley or London, who ends up running the money, whether key staff can be retained, and whether the Invesco and Perpetual processes can be successfully blended, or if indeed there is a cunning reason for keeping them apart.
One reason for keeping the two separate means it would be possible for the combined group to offer investors a range of value and of growth products across major markets, a tactic that some larger mutual funds groups in the US have already put into effect.
So far there seem to be no answer to these questions but unit holders in both Perpetual and Invesco are going to want to see some pretty soon, especially what happens to the likes of Neil Woodford and Stephen Whittaker on Perpetual's UK desk.
The absorption of Perpetual into Amvescap will mark the end of one of the great success stories in the UK retail unit trust market but also offers a cautionary tale on what happens when a boutique operation gets beyond a certain scale. Ultimately it got large enough to be too small to survive and perhaps remained single and shunned a partner for too long.
It looks like being a cheaper marriage than it might have expected two or three years ago. As for Amvescap, on course to become the second largest player in the UK retail funds market behind Fidelity, it is clear that polygamy is alive and well and it gets results.
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