Invesco’s Mark Barnett has been sacked as the manager of a £518m investment trust because of poor performance, the latest blow for the former protégé of disgraced stock picker Neil Woodford.
The board of the trust, which is independent despite carrying the name of Invesco’s historic UK business, Perpetual, said on Monday it had started a search for a new manager in view of Mr Barnett’s “extended period of underperformance”. The trust is down 42 per cent over the past three months and currently trades at a 17 per cent discount.
Mr Barnett’s dismissal from the Perpetual Income and Growth Investment trust marks the second investment trust mandate he has lost in four months and comes after he suffered a significant markdown on a part of his flagship Invesco funds last week. The investment trust was launched by Mr Woodford in 1996 and Mr Barnett took over as its manager in 1999.
The move piles pressure on the beleaguered stock picker, who has haemorrhaged assets over the past year. Mr Barnett has been battered by negative publicity following the blow-up of his former mentor Mr Woodford’s investment business, and performance problems of his own that have been further exacerbated by the recent market rout.
The coronavirus-induced sell-off has battered Mr Barnett’s value-focused investment style, which involves betting on a recovery for unloved companies including airlines, financials and oil companies.
The Perpetual Income and Growth Investment board said its decision to replace the manager had “not been taken lightly, particularly given the current market environment”, but added that it had previously flagged concerns about Mr Barnett’s underperformance.
The trust’s chairman, Richard Laing, said that the board had intensified scrutiny of the manager’s approach and held “many challenging discussions with Mark Barnett and the broader Invesco team”.
“We gave Invesco time to build on the early ‘Brexit bounce’ that was anticipated, but this proved to be short lived,” he said. “[At the end of September] performance was below the benchmark and this has continued in the second half to March 31.”
Ryan Hughes, head of active portfolios at AJ Bell, said: “It clearly was of little comfort to the board that other value-focused investment trusts have suffered even more in the recent sell-off, while they also have clearly lost confidence in the manager’s ability to capitalise on any post-coronavirus bounce back.”
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