Shareholders in Invesco Property Income (IPI) – the investment trust that lost £99 of every £100 invested over the past five years – have reluctantly voted not to receive any further dividends.

Infamous property manager Rory Morrison geared the fund just before the property crash in 2007 to acquire a portfolio of European assets only for the market to crash, leaving the fund in breach of its bank covenants and without positive net assets.

The fund first breached its loan to value boundaries of 65 per cent in 2008 before bursting through the covenant guidelines, running at a whopping 97 per cent LTV by the end of June 2011.

According to a report by analysts at Winterflood Investment Trusts, the fund’s portfolio value is now £207.2 million but £201.2 million is owed to the bank.

Today, at the investment trust’s Extraordinary General Meeting (EGM), shareholders voted in favour of paying Invesco thousands of pounds more in management fees despite losing the majority of their cash invested four years ago.

In the Winterflood report, James Brown, analyst at Winterflood Investment Trusts, explained why investors had to vote in favour of receiving no further dividends at today’s EGM.

He said, ‘The [new] objective is for the fund to repay its bank borrowings and other liabilities on or before 28 September 2014 and, having met those obligations, provide a return to shareholders.

‘The fund will not be able to make any new investments, draw down any new borrowings or pay dividends. Having had negative net assets since March 2009, it has appeared unlikely that there would be anything left for shareholders.

‘Given the significant amounts to be paid to Royal Bank of Scotland (RBS) and to a lesser extent, Invesco, it still remains unlikely that there will be any return for shareholders.

‘However, if the loans were to be called now, then there would be no return for either shareholders or Invesco. While this deal still favours the bank, it allows the prospect for some return, should property markets recover in the next three years.’

Invesco has been reluctant to talk about this fund in the press and the manager Rory Morrison has never returned phone calls, emails and letters from What Investment magazine on behalf of its readers.

In January 2011, the management of the Invesco Property Income Trust came clean and admitted liability for a series of decisions that led to colossal losses for investors.

However, it was in a letter seen by What Investment that the closed-ended company admitted that it was ‘too highly geared’ and that this happened ‘just as the appetite for commercial property was on the wane’.

In the letter, the registrar for the company explained, ‘Commercial property values began to slide from late 2007 and it became virtually impossible to sell assets to repay debt in such a rapidly falling market.

‘The company breached its lending covenants and its net asset value has since become negative meaning that debt exceeds the portfolio’s asset value.’

The fund’s registrar signed off the letter saying she could ‘quite understand’ investors’ frustration and ‘disappointment at its performance record’.

Investors will find little comfort in the fees still being paid to Invesco despite the investment blunder. According to the company’s accounts, in the year ending 31 March 2010, Invesco trousered £1.047 million in fees that year.

Speaking at the time, Roger Krume, investor in the Invesco Property Income Trust, said he was angry that the company continues to ignore his requests for a direct response from the manager.

He said, ‘So, I just have to sit and wait for improvements in the valuation. No mention at all about the manager Rory Morrison.’