INVISTA Real Estate is to be effectively wound up following the end of a major contract with Lloyds Banking Group, it admitted yesterday.
The company had been managing assets of £2.4bn on behalf of HBOS since it demerged from the bank in 2006 and listed on the Alternative Investment Market.
But on Monday Lloyds Banking Group, which took over HBOS’s majority stake in Invista when it acquired the bank two years ago, exercised an annual get out clause on the asset management contracts it had inherited as part of the deal.
Invista said the loss of Lloyds as a client amounted to nearly half of its total assets under management (AUM), currently around £5.4bn, being wiped out.
In a statement to the stock market yesterday it said that without the revenue generated from the HBOS contracts, the interests of both clients and shareholders would be best served by a sale of its remaining assets
“With the benefit of the HBOS funds, we had a size and critical mass that enabled us to have a balance sheet which didn’t look terribly big. Without the HBOS funds, the assets on the balance sheet look significant in size,” Invistar chief executive Duncan Owen said.