UPDATE 1-St James's Place ends $12.8 bln mandates with Invesco Perpetual

Thu Apr 3, 2014 8:34am EDT

(Adds detail and background)

By Chris Vellacott

LONDON, April 3 (Reuters) - Investment group St James's Place (SJP) is transferring management of 7.7 billion pounds ($12.81 billion) of its assets from Invesco Perpetual, allocating nearly half to outgoing fund manager Neil Woodford's new venture.

St James's Place outsources management of its range of mutual funds to hand-picked external managers. The changes do not, therefore, affect Invesco's assets under management, though it will lose millions of pounds in annual management fees.

Woodford joins Oakley Capital Management in May and will run its new Woodford Investment Management operation. That business will take three SJP mandates with combined assets of 3.65 billion pounds, currently managed by Invesco Perpetual, SJP Chief Investment Officer Chris Ralph told Reuters.

These are the 650 million pound UK Equity fund, the 1.56 billion pound Income Distribution fund and the 1.4 billion pound UK High Income unit trust.

Woodford, who announced plans to leave Invesco Perpetual in October, has managed SJP funds since 2001. He is widely feted for a defensive stock-picking style that made money throughout the financial crisis, earning him a cult-like status among investors who entrusted him to manage close to $50 million.

Ralph told Reuters that St James's Place, which is about to join London's blue-chip FTSE 100 index, had faced questions from shareholders and clients about its plans for the funds run by Invesco Perpetual since Woodford announced he was leaving.

Mandates for two other funds with combined assets of 3.35 billion pounds transfer from Invesco Perpetual to fund manager Threadneedle Investments. Management of a 720 million pound Global Equity Income fund goes to Manulife Asset Management, where it will be run by Paul Boyne and Doug McGraw, who managed the fund at Invesco Perpetual before they left the company at the end of 2012.

Invesco, which continues to manage about 1 billion pounds of bond assets for St James's Place, declined to comment on Thursday.

St James's Place, which sells investment products to a largely British customer base, was until recently 60 percent owned by Lloyds Banking Group, though the lender sold its stake during 2013.

SJP currently runs assets of around 44 billion pounds. ($1 = 0.6012 British Pounds) (Editing by Elaine Hardcastle and David Goodman)

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