By Leo Bland The Perpetual brand is to be kept for the Isa season next year in the wake of its £1bn...
By Leo Bland
The Perpetual brand is to be kept for the Isa season next year in the wake of its £1bn takeover bid by Amvescap, parent company of Invesco.
No decision has yet been made on the long-term future of the Perpetual name in the UK retail market, although Invesco and Perpetual's leading to the situation where the will run alongside eachother for at least the first three months of next year.
Amvescap does have a track record of retaining some brands from companies it has taken over; it continues to use the Aim name in the US after it took over the group in the late 1990s. However, it merged the GT brand with Invesco in all of the markets it operates in apart from Germany after its takeover of LGT in 1998.
The Perpetual deal, which Amvescap is looking to complete by the end of the year, will give the parent company around £291.8bn under management and will make the group the second largest unit trust provider in the UK behind Fidelity.
Perpetual has around £11.8bn in funds under management. Amvescap said it is looking to retain Perpetual's Henley headquarters, particularly for fund administration, although it could not confirm whether funds will continue to be managed from the Oxfordshire base.
Charles Brady, executive chairman of Amvescap indicated Perpetual's fund managers may be able to continue to run money from Henley, as he pointed out the group has fund management offices in the US in cities such as Nashville and Pittsburgh. He added that a centralised location for fund managers has become less important with the advent of the virtual office.
Market commentators believe the key Perpetual individuals who Amvescap will look to retain will include chief investment officer Bob Yerbury, Neil Woodford, who manages Perpetual Income and Perpetual High Income, Stephen Whittaker, who manages Perpetual UK Growth and the joint heads of fixed income Paul Causer and Paul Read.
Amvescap said packages are being put together to try and ensure that Perpetual's top fund managers stay with the enlarged group.
Brady said: "The combination of Perpetual, one of the largest and most respected retail fund managers in the UK, with Invesco's rapidly growing UK business creates a market leader with the scale, range of products and depth of resources to succeed in this growing dynamic market."
Martyn Arbib, chairman of Perpetual said: "Through this combination Perpetual is able to offer our clients access to Amvescap's global product range, resources and strong distribution capabilities.
"Our employees will benefit from the considerable career opportunities which exist by joining one of the world's leading independent investment management companies."
Arbib and Perpetual's directors, who between them hold around 42% of Perpetual's shares, have agreed to the bid, which will be binding even if another group makes an offer for Perpetual. The remaining shares are held by institutional and private investors.
IFAs have given a cautious reception to the deal. Jason Hollands, deputy managing director of IFA group Best Investments, said: "It is an odd combination of businesses. There is the risk of duplication of funds as both groups have a lot in the Europe, UK growth and equity income sectors and if there were fund mergers some of these funds could get very big.
"The groups also have a quite different investment approach - Invesco's has been a combination of momentum investing, growth investing and buying technology, media and telecom stocks while Perpetual has concentrated on value.
"But there is a possibility that the combined group might run a range of value funds run by Perpetual and range of growth funds managed by Invesco."
Nick Hollings, head of managed funds at Principal Premier, said one of the strengths of Perpetual has been its penetration in the smaller IFA market, while much of Invesco's success has been more focused on the discretionary advisers and the institutional market.
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