Invista Real Estate Investment Management announced on Tuesday that it is to sell all its assets and return the proceeds to its shareholders. The move follows the decision by Lloyd Banking Group to transfer a £2.4 bn (EUR 2.7 bn) fund management contract from Invista to Scottish Widows Investment Partnership (SWIP).
Invista Real Estate Investment Management announced on Tuesday that it is to sell all its assets and return the proceeds to its shareholders. The move follows the decision by Lloyd Banking Group to transfer a £2.4 bn (EUR 2.7 bn) fund management contract from Invista to Scottish Widows Investment Partnership (SWIP).
SWIP is the investment asset manager for Lloyds TSB. Lloyds owns 55% of Invista.
Invista has managed funds on behalf of HBOS, and more recently Lloyds following its acquisition of HBOS, since Invista demerged from HBOS and listed on London's junior AIM market in 2006.
At end-June 2010, Invista had £5.4 bn (EUR 6.2 bn) of assets under management which generated a total annual revenue £13.7 mln. Of this the HBOS Funds contributed £2.4 bn of assets under management and £5.3 mln of revenue.
The HBOS Funds comprise a number of investment management agreements with Clerical Medical, Halifax Life and HBOS (the HBOS contracts). All but one of these were put in place for an initial term of five years at the time of Invista's admission to AIM in 2006. During September 2010, all the HBOS contracts became terminable on 12 months' notice.
Invista and Lloyds entered into discussions during the summer months about agreeing revised contracts. But, after extensive discussions, Invista was advised on 11 October 2010 that the HBOS contracts were to be terminated from October 2011.
'Accordingly, the company is currently in discussion with Lloyds to agree an orderly handover of the management of the HBOS Funds,' Invista said.
'During the course of discussions in relation to the HBOS contracts, the board of Invista has been reviewing its strategic options in the event that notices of termination of the HBOS contracts were served. The board's conclusions following this initial review are that without the revenue generated from the HBOS contracts, the interests of both clients and shareholders of Invista would be best served through an orderly realisation of value from Invista's assets, including its asset management business, with the proceeds of such realisations returned to Invista shareholders in due course.'