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| Share Name | Share Symbol | Market | Stock Type |
|---|---|---|---|
| Invesco Enhanced Income Limited | IPE | London | Ordinary Share |
| Price Change | Price Change % | Share Price | Last Trade
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|---|---|---|---|---|
| 0.00 | 0.00% | 73.80 | 01:00:00 |
| Open Price | Low Price | High Price | Close Price | Previous Close |
|---|---|---|---|---|
| 73.80 |
| Top Posts |
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Posted at 01/3/2021 07:50 by speedsgh Proposed Merger with City Merchants High Yield Trust Ltd - The Board of Invesco Enhanced Income Limited (the “Company&rdquo It is proposed that IPE will be merged into CMHY and the current fund manager of both IPE and CMHY, Rhys Davies, will continue as the fund manager of the enlarged entity which will be renamed Invesco Bond Income Plus Limited (“BIPS”) which, based on the existing net assets of IPE and CMHY, would have net assets in excess of £300 million. (The above proposals are referred to herein as the “Proposals&rdq The Board believes that the Proposals will enable IPE shareholders to benefit from greater economies of scale that are expected to result from the enlarged asset base of BIPS whilst retaining the same investment approach and manager. Benefits of the Proposals to IPE Shareholders The Board believes that the Proposals have a number of benefits for IPE shareholders: ~ Greater scale through the combination of similar investment portfolios: Shareholders will be able to continue with the same fund management company and investment manager with a similar investment style. Rhys Davies currently manages both funds with a good track record and does so with a similar investment objective of high income and a focus on high-yield fixed-interest securities. There is a high degree of overlap between the two investment portfolios. ~ Lower management fee arrangements: In connection with the Proposals, it has been agreed with Invesco Fund Managers Limited (“IFML”) that the management fee will be reduced to an annual amount equal to 0.65 per cent of the total assets less current liabilities to reflect the larger size of BIPS. This is a reduction from the IPE tiered annual management fee with a current blended rate of 0.76 per cent of IPE’s net assets; other costs will be spread across a larger asset base resulting in further economies of scale. ~ Sustainable income level: It is anticipated that the income yield payable to IPE shareholders will be placed onto a more sustainable basis as a consequence of the transaction. In addition, IPE shareholders will be paid a special pre-liquidation dividend of 0.75 pence per IPE ordinary share ahead of the transaction. ~ Increase in scale and improved liquidity: The Board expects that the enlarged entity will benefit from greater liquidity in its shares. ~ Potential for strong share price rating: The Board believes that the above benefits should assist the shares in maintaining a strong rating as the greater scale of BIPS is expected to result in broader market appeal. The Proposals will be subject to the approval by the shareholders of both IPE and CMHY in addition to regulatory and tax approvals. A timetable and further details of the Proposals will be announced in due course... Dividend Policy In connection with the Proposals, it is proposed that BIPS adopt a dividend policy to target an annual dividend of 11.0 pence per share over a three year period following the implementation of the Scheme by way of 4 quarterly dividends of 2.75 pence per share. This is approximately equivalent to an annual dividend of 4.25p per share for IPE shareholders[1]. It is anticipated that dividends will be substantially covered by net income from the portfolio, although BIPS will support the target dividend over this period through the use of revenue and capital reserves if necessary. Thereafter, the Board of BIPS shall give consideration to its ongoing dividend policy, taking into account the annualised net income from its portfolio and the market environment at that time. This proposed dividend policy has been agreed between the Board of IPE and CMHY in recognition of the differential in income distribution ratios adopted by each of the two companies and is intended to provide a path towards a longer-term sustainable income distribution to shareholders of BIPS. Whilst the target dividend of 11.0 pence per share would result in a reduction in the annual dividend income for IPE’s shareholders compared with IPE’s historical dividend pay-out, IPE shareholders will be paid a special pre-liquidation dividend of 0.75 pence per IPE ordinary share ahead of the transaction, which is expected to be approximately equal to the reduction for the first year following the merger. IPE’s dividend has been supported by the use of revenue reserves for several years. As noted in IPE’s 2020 Annual Financial Report, the medium term effects of Covid-19 will likely bring a prolonged period of very low interest rates, in light of which the Board would be reviewing whether the dividend policy is sustainable, balancing the need for current income against the requirement to preserve investors’ capital to earn that income in coming years. The Board of IPE has taken this into account when considering the dividend proposals set out above and believes they will continue to provide an attractive level of income for IPE shareholders over the long-term... Expected timetable It is currently envisaged that a shareholder circular and notice of the general meeting setting out the details of the Scheme and seeking shareholder approval will be sent to shareholders in April 2021. The relevant general meetings are also expected to be convened in May 2021. The Chairman of IPE, Kate Bolsover , commented: “We believe the combination of the two trusts to form Invesco Bond Income Plus (“BIPS”) to be beneficial and appropriate for IPE shareholders given the greater scale and lower ongoing charges. The Board believes the Proposals will provide an attractive and sustainable level of income for IPE shareholders over the long-term whilst also promoting greater liquidity in its shares and a strong long-term share price rating. The continuation of investment approach which will be led by the same fund manager and fund management house underpins the clear rationale for the merger, allowing shareholders to benefit from the manager’s strong track record.” |
Posted at 27/11/2020 11:52 by cc2014 Not much to say is there. I don't really care about the split between income and capital but I suspect 90% of investors do and that the share price will fall when it happens based on what's I've seen happen in similar situations.I don't think IPE is the only one in this situation. NCYF looks far more ready for a cut than here but they don't seem to worry about capital deprecation. I shall hold my shares here. If they do fall on a dividend cut I'll consider that a buying opportunity. |
Posted at 27/11/2020 10:31 by speedsgh A warning in today's results that the current dividend policy is to be reviewed...Annual Financial Report - "In the current economic and market environment, your Board continues to believe that shareholders place great value on the Company’s consistent dividend stream and has prioritised revenue generation through investment in relatively high-yielding and considered debt positions. Market yields remain at historically low levels but, despite this, your portfolio managers have generated a net revenue return of 4.54p per share. During a period when many companies have been forced to suspend dividends, the Board has maintained the 5.00p annual dividend for the year and a fourth interim dividend of 1.25p per share was declared on 22 September 2020. The shortfall of net revenue earned versus dividend paid was 0.46p which is the equivalent of £793,000 (2019: £525,000). This has been funded from revenue reserves which the Company has accumulated over a number of years. Our dividend policy has served investors well, but the medium term effects of Covid-19 will likely bring a prolonged period of very low interest rates. With that in mind the Board will be reviewing whether the policy is sustainable, balancing the need for current income against the requirement to preserve investors’ capital to earn that income in coming years." |
Posted at 17/8/2020 15:13 by speedsgh ‘Buy’ Invesco Enhanced IncomeInvestors’ disappointment at the decision of star bond fund managers Paul Causer and Paul Read to step back from Invesco Enhanced Income (IPE) has created a buying opportunity in the Jersey, high yield bond investment company, says Numis. Analysts at the broker placed a ‘trading buy’ on the £115m fund after its shares slipped to a 9% discount following the announcement last month that Causer and Read’s deputy, Rhys Davies, would take over the portfolio with the help of Edward Craven. The discount has narrowed to 7% since Numis published their note last week but is still wider than the 1% average of the past year. Lovett-Turner said the changeover would not have a ‘significant impact on the way the portfolio is run’ as Davies had worked with Causer and Read since 2014. Shares in the 7.5% yielder have fallen 8% this year, despite the 1.7% gain in the underlying net asset value. Over 10 years shareholders have received a total return, including dividends, of 141% from a portfolio that Lovett-Turner said balanced a core of quality high-yield bonds with low default expectations with more speculative positions subordinated bank and insurance company debt. The discount ‘looks excessive’ and the yield is ‘attractive&rs |
Posted at 12/6/2018 15:27 by speedsgh ... Over at IPE – Invesco Perpetual Enhanced Income the battle is intensifying ahead of an EGM on 20 July. There are resolutions to remove two directors: Donald Adamson (Chairman), and Richard Williams (Chairman of the Management Engagement Committee), and two appoint two new directors, Hazel Adam and Howard Myles. As many of us suspected Invesco have confirmed that the row was not only about fees but also “concerns about Board governance”. Numis reports that Invesco thought the board was “overly aggressive” in the fee negotiations, serving a 48 hour ultimatum, and attempting “to insert additional, material changes to the investment management agreement that had not previously been discussed”. Invesco confirms that prior to its resignation, it had already agreed to cancel the performance fee and to reduce the annual management fee (albeit that it was in favour of keeping the performance fee)”.The IPE board has hit back with its own circular which states that it “has behaved correctly” in attempting to renegotiate fees with Invesco and then initiating a “competitive and fair process for a new investment manager when Invesco chose to resign”. However, it is “now being pressured by a very large asset manager” in a “cynical attempt to use concentrated voting power against retail investors” who constitute the majority of the share register. The Board believes the Requisition is “an attempt to subvert the rights of the independent Directors to run the Company in the best interests of Shareholders”. Personally, although I have some sympathy for Invesco’s position – it had done a good job – I’d be voting with the board simply as a matter of principle. I’m also deeply worried about its attempt to remove the directors which strikes me as overly vindictive. I think the move to renegotiate fees was entirely reasonable although one has a suspicion that the process might not have been handled brilliantly. It’s also clear that other investment management groups seem eager to bid for the mandate – assuming Invesco doesn’t try and grab back control. Overall, I’d argue that neither side comes out of this slightly sad affair smelling of roses but the row does present an opportunity for income-based investors. The funds’ managers have delivered an NAV total return of 102.2% over the past decade versus 64.2% and 78.0% for the IA High yield and IA Strategic Bond sectors, respectively. Crucially the shares have fallen significantly since Invesco’s resignation, and are currently trading at a discount to NAV of 0.8% versus a premium of c.9%. That strikes me as a potential opportunity to buy back into a well-managed portfolio of bonds at a reasonable price. The running yield is now closer to 6.8% per annum which strikes me as a reasonable number, as long as the new managers are up to scratch. |
Posted at 11/6/2018 08:51 by speedsgh @CWA1 - Yes, it seems the gloves are now off. Difficult to know who to believe in these situations. There's always two sides to every story and the truth doubtless lies somewhere in between...IPE publishes Circular to shareholders - Situation overview The situation may be broadly summarised as below: · A requisition has been served on the Company by Invesco Perpetual and Practical Investment Fund asking that Donald Adamson, Chairman, and Richard Williams, Chairman of the Management Engagement Committee, be removed as directors of the Company and Ms. Hazel Adam, and Mr. Howard Myles, be appointed as directors of the Company. · The Board believes that this Requisition is firmly against the interests of the Company's shareholders. · The Board started negotiating the terms of its Investment Management Agreement with Invesco in November 2017, most notably around the level of management fees being paid and the removal of the performance fee. Despite good faith negotiations, Invesco subsequently resigned as the investment manager in April 2018. They did so after initially agreeing in writing to a new fee arrangement. · Following Invesco's resignation the Board invited proposals from leading fixed income managers. Invesco were offered, but declined, the opportunity to participate in this competitive process. · On 22nd May 2018, the Company received the aforementioned requisition demanding removal of Donald Adamson and Richard Williams. It is the Board's view that if Invesco had fully engaged with the Board during this process, it would understand the purpose of, and need for, an independent board for the successful running of a company. Invesco's actions would appear to clearly demonstrate that this is a lesson they are yet to learn. · The Board believes Invesco Perpetual is using its clients' ownership position to disrupt the tender process for a new manager. · The strong proposals received by the Board from a number of high-quality potential managers demonstrate the untenable nature of Invesco's position. Every proposal received would result in lower management costs as compared to what it currently pays. No party has proposed a performance fee. Furthermore a preliminary review of 5-year performance suggests that, when measured on a like for like basis against IPE's unleveraged performance, Invesco's historical performance is at approximately the mid-point of the performances quoted in the proposals. · Costs matter - they go directly to Shareholder returns: They influence how much income the Company can distribute and what investment performance can be achieved. A further consequence of the lower fees offered by prospective managers is that dividend cover could potentially be fully restored and a positive contribution to reserves restarted, improving the long-term sustainability of the yield the Company offers. · The Board has behaved correctly. It first attempted to renegotiate fees with Invesco and then, when that process was rejected by Invesco, initiated a competitive and fair process for a new investment manager when Invesco chose to resign. · The Board is now being pressured by a very large asset manager. This is a cynical attempt to use concentrated voting power against retail investors who as platform registered owners or wealth management clients constitute the majority of the share register. · The Board believes the Requisition can only be seen as an attempt to subvert the rights of the independent Directors to run the Company in the best interests of Shareholders. · The Company is responding to a request for information from the FCA about the circumstances surrounding the requisition. · The Board understands that, based on previous conversations with Invesco Perpetual, Invesco Perpetual has historically very rarely voted its shares at company general meetings. Given this past prudent behaviour, the Board would expect them to take a similar approach on these resolutions to ensure that the will of independent shareholders is not prejudiced. |
Posted at 22/5/2018 08:33 by cwa1 Just in case anyone had missed yesterday's after hours announcment of results:-In which, amongst other things, this was said:- Termination of Management Agreement Shareholders will be aware of the announcement released by the Company on 23rd April 2018 stating that Invesco had decided to step down from the management of the Company. The announcement also acknowledged the good service provided to the Company by Invesco over the years. I would like to take this opportunity to provide some further context around this development and the Board's role in relation to it. It is a key responsibility, indeed, duty of an independent board to keep the commercial terms under which the investment manager is engaged under review to ensure that they fairly reflect current market circumstances and practice. This is precisely what your Board has been doing. Shareholders will also be aware that the Directors together own 1,282,227 shares in the Company providing strong alignment with shareholders' interests generally. In reviewing the terms of the investment management agreement which were last changed in 2014, the Board has noted the following particular matters: i) The elevated level of the high yield market has created an environment where costs inevitably absorb an increasing proportion of gross returns. The results for this period demonstrate the point. Investment management costs constitute the largest proportion of total costs. ii) A detailed review of fee structures for comparable vehicles, supported by our advisers, demonstrated that since 2014 commercial terms for managers have been moving distinctly to favour shareholders more. In addition, performance fees have been eliminated by many investment companies. iii) The FCA review of the asset management industry has made it very clear to those charged with the governance of investment vehicles that they must be able to satisfy themselves that investment management fees represent good value for money for investors. Having taken relevant advice and carried out detailed research, the Board concluded that the current arrangements with Invesco needed to be adjusted. A further point in tackling the Company's cost structure rests on the improvement to dividend cover which cost reductions can be expected to make. This will improve the long term sustainability of the income which can be offered. This point is particularly relevant in that our dividend is not currently fully covered by earnings albeit that the Company has significant levels of revenue reserves. The Board and the Management Engagement Committee sought to reach a suitable accommodation with Invesco which we believed would reflect current market conditions. Despite detailed efforts by the Board and its advisers over an extended period, it was not possible to reach a satisfactory agreement and Invesco decided to step down and have subsequently declined an invitation to participate in the investment manager replacement process described below. Invesco will continue to manage the portfolio until a replacement is appointed under the 12 month notice period provided under the existing agreement. Investment Manager Recruitment Process The Board and its advisers believe that improved terms from suitably qualified managers will be available in the market. JP Morgan Cazenove has been retained to co-ordinate this process and I am able to confirm that in addition to the planned approaches being made to a number of leading bond managers, significant unsolicited interest from a variety of experienced bond managers has already been expressed and will be considered as part of the detailed process being carried out. Board Composition Had negotiations with Invesco, which commenced in November of last year, been successfully concluded it would have been my intention to retire from the Board. However, given the difficulties experienced I have remained as Chairman in order to see this very important matter completed in the interests of all shareholders. In any event, I will stand down on or before the next Annual General Meeting of the Company Outlook The market outlook is as earlier described. The Board is optimistic that with the recruitment of a high quality and experienced bond manager and a lower cost structure, the prospects for the future will be significantly improved with enhanced dividend cover and higher net returns for any given level of portfolio return. Donald Adamson |
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