Invesco and Barnett fired by Perpetual Income & Growth
By Sean Farrell
Date: Monday 06 Apr 2020
(Sharecast News) - Invesco and its former star fund manager Mark Barnett have been sacked by Perpetual Income & Growth Investment Trust after a long period of poor results.
Perpetual's decision follows the dismissal of Barnett, a former Neil Woodford protege, by Edinburgh Investment Trust in December. Barnett became head of UK equities at Invesco when Woodford left to set up his own firm in 2014. That business collapsed in 2019.
Like Woodford, Barnett has suffered from poor stock selection and investments in small and illiquid companies. His bad bets have included Burford Capital and Provident Financial, which were both former Woodford picks. After outperforming the wider market between 2000 and 2015 the fund's total return went into a steep decline.
Barnett's dismissal ends Invesco's 20-year management of Perpetual's UK equity income trust. Perpetual said it did not take the decision lightly, especially given current market conditions, but that poor performance had continued in the year to the end of March.
Perpetual said the trust had underperformed its benchmark index for too long and that its board had warned Invesco that its tenure was under threat. Perpetual said it was looking for a new manager with credentials and capacity to achieve capital growth and real dividend growth from UK equities.
Richard Laing, Perpetual's chairman, said: "Serving Invesco with protective notice of termination following an extended period of underperformance of the company's benchmark was a considered decision by the board following regular rigorous reviews and 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. At the half year, performance was below the benchmark and this has continued in the second half to 31 March."
Ryan Hughes, 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 & Growth Investment Trust does not come as too much of a surprise ... However, it will be a blow to Invesco having also lost the Edinburgh Investment Trust."
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