View from City Road: Invesco test on staying power

CITY reputations are far more robust than is often assumed. Morgan Grenfell, UBS Phillips & Drew, County NatWest and Goldman Sachs have survived damage from the Guinness, Blue Arrow and Maxwell affairs respectively. Will Invesco MIM also prove resilient?

The company, which managed pounds 50m of the Maxwell pension funds, fortunately has a large and thriving US business, which accounts for pounds 23bn of its pounds 31bn under management.

Anyone else might be tempted to change the company's name. But Charles Brady, who became chief executive when Lord Stevens announced plans to stand down as chairman, will only admit that he might drop the MIM part, which he says is difficult to explain to foreigners.

As well as the Maxwell link, the company suffers from a weak investment record, exemplified by the appalling performance of Drayton Consolidated Trust, against which the group has made yet another provision (covering CM Group as well) of pounds 9m, reducing pre-tax profits from pounds 11.5m to pounds 926,000 in the half-year and contributing to a cut in the interim dividend to 1p.

The further Drayton provision is disappointing given that the company has already set aside pounds 15.2m in two years for the same trust.

Invesco's UK pension funds were among the worst performers in the late 1980s but have improved more recently. Its unit and investment trusts remain variable.

The shares, at 54p, are a punt on Mr Brady's ability to restore the company's investment record. With a market value of pounds 133m, Invesco MIM is valued at just 0.4 per cent of funds under management.