Invesco seeks to reassure investors: Maria Scott and Vivien Goldsmith look at changes at the fund manager

INVESCO MIM, the investment manager fined pounds 750,000 by the City regulator Imro, is trying to reassure its thousands of small investors this weekend that it can still be trusted with their money.

Investment advisers were largely reassured, but some feel that they will have to avoid Invesco MIM funds because their clients will not accept them after the adverse publicity.

Nicholas Guyatt, a director of Invesco MIM Unit Trust Managers, said the management of the Invesco group had changed substantially since most of the problems leading to the fines had arisen. The administration systems and controls had also been radically overhauled.

'We are committed to the private investor and we are a company they can safely invest with.'

Invesco has about 250,000 unit trust investors and 100,000 personal equity plan investors. The company runs more than 30 unit trusts, many of them specialist single-market funds launched in the bull market of the Eighties, and also investment trusts.

Investment performance has been patchy. It has three of its unit trusts - Hong Kong & China, Singapore Asean and the South-east Asia fund - among the top 25 unit trusts over five years. But it has two trusts in the bottom 25 - the smaller companies fund and the property shares fund, which has lost nearly 15 per cent of its value over the period.

The company admitted 55 Imro rule breaches, although these were spread among subsidiaries. A number of these were related to the role of Invesco MIM Management in managing Mirror Group pension assets.

A separate set of breaches related to problems in the investment trust Drayton Consolidated, where investors have received several million pounds of compensation.

A further pounds 500,000 is understood to have been paid to other investors, a large number of whom were affected by problems in the unit trust operation. There were pricing errors on one trust dating back to 1987.

Mr Guyatt said Invesco had now compensated anyone who had lost money as a result of the unit trust problems. He said he believed all other problems had now been dealt with. Invesco would not be writing a standard letter of explanation to all investors, however.

Lord Stevens of Ludgate retired as chairman of Invesco MIM in April. This followed the resignation last December of Nicholas Johnson as deputy chairman. A new chief executive, Norman Riddell, was appointed earlier this year.

Change further down the line includes the appointment of Alan Wren, former chief executive of Prudential Unit Trusts, as managing director of the retail division.

Mr Wren said yesterday that he was impressed with administration at Invesco. He intends to rationalise the range of unit trusts and is also working with investment managers on improvements to performance.

Investment advisers had mixed views about the Invesco problems.

Mark Dampier, an investment adviser with Whitechurch Securities, said investors should not panic out of MIM unit trusts.

'They are a funny group. I have done a small amount of business with them, mainly on their Nippon Warrant fund for clients who specially wanted that. They have always been successful in marketing, but I have always put a question mark over their performance. I have a degree of sympathy with people dealing with regulators. They can pick on incredible things.'

Graeme Farquharson, investment director of Hill Martin, said: 'It's a fairly sorry story. It's bound to be an influence when we are picking unit trusts. A group that has such a catalogue would present problems.

'One doesn't hear about this sort of thing until it's happened, so there are no lessons to be learned. If there is a positive side to it, then it is that the authorities do have teeth and are able to pick these things up.'

Stephen Cooke, investment director with Pointon York, said: 'If one believes that it's an historic problem, then one should disregard it. We do have some clients with MIM unit trusts. The driving force may be clients' prejudice. But if we were going to take any action, we would have done it by now.'

Stephen Hargreaves, managing director of Hargreaves Lansdown, said the group has been getting into shape over the past 12 months. He was comforted that Mr Wren had joined. 'They are sorting the ship out.'

'I've known Invesco MIM, MIM Britannia, and whatever else it's been called over the years, for a long time. They have a habit of getting things right, then getting into trouble and then getting right again.

'We will be very reluctant to buy things for a while. It would be financial suicide to be promoting their products (at the moment because of the bad press). Things will return to normal, but not for a little while.'