Embattled equity income fund manager Mark Barnett has left Invesco after 24 years at the company. Barnett, one of the City’s best known investment fund managers, has come under increasing pressure after prolonged underperformance of the UK equity income and growth funds ran by him.
In a short statement, Invesco’s chief investment officer Stephanie Butcher explained that following a reorganising the UK equities portfolio, and after discussion with Mark Barnett, ‘ we have mutually concluded that this is the right time for him to hand over the leadership of these funds and leave Invesco’.
Butcher went on to show Invesco’s ‘ appreciation of Mark’s profound commitment to both clients and colleagues over 24 years.’
James Goldstone and Ciaran Mallon will take over as co-managers of the open-ended funds previously run by Barnett, while Invesco’s head of UK equities Martin Walker will run the Perpetual Income & Growth (PLI) investment trust from which Barnett was sacked in April for putting up dismal returns.
The trust’s share price rose 1.8% on the news to 207.6p.
LONG SPELL OF POOR PERFORMANCE
The performance of the open-ended funds managed by Barnett, a protege of fallen investment star Neil Woodford, has also been under intense scrutiny.
The Invesco Income (BJ04HW5) and Invesco High Income (BJ04HP8) funds have produced negative returns for investors of 23.5% and 22.5% respectively since Barnett took charge, according to analysis from Shore Financial Planning.
Over the same period, the FTSE All Share index has increased 8.55%. By comparison the FTSE 350 Higher Yield Index has fallen 6.2% and the Investment Association's UK Equity Income sector has risen 2.4%.
BARNETT DEPARTURE NO SURPRISE
AJ Bell head of active portfolios Ryan Hughes said Barnett’s departures comes as ‘little surprise’ given the continued poor performance of his funds over the past couple of years, as well as positions Barnett took in illiquid and unlisted companies.
Hughes said, ‘While Invesco would have been hoping that the steps taken to improve performance in recent months would have been sufficient, it is clear that making a clean break has been decided as the better course of action for both parties.
‘With a review of the UK range also having taken place, Invesco clearly want to try and get their UK franchise back on the front foot, however it will take a long time for the new managers to turn around performance.’
He added that investors will need to think about whether they remain in the Invesco funds and further clarity will be needed from the new managers as to any portfolio changes that may be made.
