New investment trust to ‘shake up’ industry
Anew investment trust is to list on the London Stock Exchange next month, aiming to raise £125m. The People’s Trust has pledged to shake up the investment world, encouraging longer-term investing and shunning the bonus culture of much of the industry. The trust also aims to deliver 7pc returns each year over a seven-year period.
Daniel Godfrey is chief executive of the trust. He was previously chief executive of the Investment Association, the fund management trade body, before he was ousted for pursuing an aggressive reform agenda.
The new trust has pledged to pay no performance fees to its investment managers and no bonuses to company staff. The trust’s non-executive directors will waive their fees and Mr Godfrey will waive half his salary for two years or until the trust’s assets reach £250m.
Mr Godfrey crowdfunded the costs of listing and those who participated – the trust’s “founders” – will get a fee discount when it lists.
The trust will use a “fund of funds” model for its investment management, enlisting external fund managers to run the money. This model has previously been criticised for being more expensive. The trust will invest in around 150 stocks across the globe, with five fund managers investing across different geographies.
Big Issue Invest Fund Management will also run 1pc of the trust’s assets, investing in social enterprises and charities.
Scottish asset manager Baillie Gifford has cut the charges on 20 of its funds that invest in shares. Fees have been cut by up to 0.1 percentage points in some cases.
The asset manager said it was passing on economies of scale after the funds had grown their assets in recent years. Examples include Baillie Gifford European, whose annual charge has been reduced from 0.65pc to 0.55pc, and Baillie Gifford Japanese, which will cost 0.6pc instead of 0.65pc. The fee cuts take effect on October 1.