Trust boss Barnett fired a second time
Woodford’s protege out after ‘underperformance’
Mark Barnett has been fired from running a second investment trust as concerns over his performance escalate.
The independent board of the £ 420m Perpetual Income & Growth Investment Trust said yesterday they were sacking the fund manager, who works for Invesco, ‘following an extended period of underperformance’.
Barnett, 49, a protege of fallen fund manager Neil Woodford, was ousted as manager of the £1.1bn Edinburgh Investment Trust in December.
anyone who put their savings into the Perpetual trust five years ago would be nursing a 40.9pc loss, compared to a 10.5pc loss for the average Uk equity income trust following the coronavirus slump.
ryan Hughes, the head of active portfolios at aJ Bell, said: ‘News that Mark Barnett and Invesco have been served notice on their management of the Perpetual Income and Growth Investment Trust does not come as too much of a surprise, given the scale of the underperformance of the trust against the FTSE all Share over the past few years.
‘However, it will be a blow to Invesco having also lost the Edinburgh Investment Trust.’
One industry source said they ‘would not be surprised’ if Barnett’s
recent troubles spelled the end of his career at Invesco.
Just last week the fund manager announced he was having to sell the unlisted holdings from two of his open- ended funds – the Invesco Income and High Income funds – for a 60pc discount after poor performance and investor withdrawals meant they accounted for too much of his portfolio.
Barnett, like Woodford, takes a ‘value’ approach to investing, meaning he picks stocks which he thinks have been neglected by the wider market.
He had run the 24-year-old Perpetual trust since 1999, over which time he would have turned a £1,000 investment into £3,294.
But part of his recent problems have been due to the fact that the ‘value’ style is currently out of favour.
Darius McDermott, managing director of Chelsea Financial Services, said: ‘There is no getting away from the fact that it’s been a difficult few years for the trust and Mark’s open- ended funds. But at the end of the day, performance is performance.’
richard Laing, chairman of the Perpetual trust, said: ‘The board had previously made it clear on several occasions that it was concerned with the company’s poor performance and further intensified scrutiny on the manager’s investment approach.
‘We gave Invesco time to build on the early “Brexit Bounce” that was anticipated, but this proved to be short-lived.’
Invesco said it was ‘disappointed’. a spokesman added: ‘We understand the performance pressures that exist in today’s market, but since the half-year results we have embraced the board’s views on performance with improved results in the latter part of 2019, consistent with the principle- based approach we have always taken.
‘We are disappointed that we were unable to build on this, given the recent extreme volatility in financial markets.’
The Perpetual trust has taken on consultancy firm Mercer to help it find a new manager.
aJ Bell’s Hughes said: ‘ The £400m trust will now be a highly prized opportunity for a range of Uk equity managers, particularly when the assets of so many will have been hit hard by recent market falls.’
Shares in the trust climbed 6.2pc, or 12p, to 207p.