$200m stake for sale

Peregrine Investment Holdings, the Hong Kong merchant bank, is set to make $200m by selling nearly all of its stake in Invesco, the London-based fund management group. Peregrine will have trebled its money in less than three years, having originally bought up its 24.1 per cent stake at prices between 55p and 77p per share.

Invesco shares yesterday closed down 20p at 238p amid disappointment that Peregrine will not be bidding for all of the company.

The share price dropped despite good results, with Invesco reporting interim pre-tax profits of pounds 25.8m compared with pounds 18.7m last year. The dividend was up 40 per cent to 1.75p.

"Invesco has got a lot going for it. It has seen a lively US market, and margins continue to improve on the strength of efficiency gains,' said Simon Whittock, analyst with Smith New Court.

Invesco increased its funds under management by 12 per cent to pounds 47bn, the bulk of which is in the US. Most of the Peregrine stake is being offered to American investors, helping Invesco broaden its shareholder base in its main market. Invesco also said it will be seeking a full listing on the New York Stock Exchange.

"We think asset management is beginning to be a major growth industry. Invesco has paid the price, getting people in place across the world, and is now well positioned to take advantage of this global growth," said Charles Brady, Invesco's chairman.

Philip Tose, chairman of Peregrine, said he was selling out because the stake had become too dominant a passive investment. "We couldn't take Invesco over, much as we would have like to have done, because of the high level of goodwill," he said.

Invesco is now one of the select group of major British quoted asset managment businesses, around which areprowling a number of banks, insurance companies and investment houses, domestic, European and American. "We would like to stay independent," said Mr Brady. "At some point we could acquire someone, we are generating the funds for this."

Comment, page 15