New in­vest­ment trust to ‘shake up’ in­dus­try

The Daily Telegraph - Your Money - - YOUR MONEY - Laura Suter

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.

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