Our UK Equities Funds have seen changes in portfolio mix over the last year as we continue to work on behalf of our clients’ best interests over the short and longer term. Over that period we have substantially increased liquidity within our UK portfolios and increased allocations to a number of larger cap names. We have decided that now is the right time to go further with these changes and to dispose of unquoted assets held in those funds in order to redeploy capital raised to publicly quoted assets.
In order to ensure we are protecting the interests of all investors in the funds in an equitable way, and to mitigate any potential conflicts of interest, in line with internal pricing policies, the independent Unquoted Pricing Committee has reviewed the value of the unquoted portfolio and determined a current market clearing price to reflect current market conditions. Given the current market conditions a mark-down has been made to the values of unquoted stocks, in accordance with policies of the independent Unquoted Pricing Committee, by 60%. Invesco continues actively to explore the realisation of the unquoted assets in the portfolio. This is progressing as anticipated.
Once realised this capital will be reallocated to publicly listed equities which in our view have been heavily discounted due to the fall in equity markets as a result of the current COVID-19 outbreak. We recognise, of course, that a reallocation of capital from unquoted to publicly listed equity is a change in the fund composition. However, these are extraordinary times which call for decisive and positive action to look after the best interests of clients in the short and longer term. This step is entirely consistent with our valuation driven, risk-adjusted investment management strategy and ensures we remain in tune with market conditions.
The table below provides further information on the fund impacted by the revaluation and the % reduction to its Net Asset Value:
|Fund||NAV||% Exposure to Unquoteds||NAV Impact||Impact|
|Invesco Pensions UK Equity Pension||£166,943,870||6.28%||£6,291,896||3.77%|
All data as at 30 March 2020. Source: Invesco.
The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.
Where individuals or the business have expressed opinions, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice.