Interactive Investor

Mark Barnett leaves Invesco

The announcement follows a period of significant underperformance for Barnett's funds.

15th May 2020 11:34

Tom Bailey from interactive investor

The announcement follows a period of significant underperformance for Barnett's funds.

Mark Barnett is set to leave Invesco after 24 years, stepping down from his role as manager of several of Invesco’s UK-focused investment funds.  

The investment house says James Goldstone and Ciaran Mallon will be taking over as co-managers of the numerous open-ended funds Barnett manages. Martin Walker, head of UK Equities, will manage the Perpetual Income and Growth Investment Trust while a new manager is sought.

According to Ryan Hughes from AJ Bell, the news will come as little surprise. He points out that over the last couple of years Barnett’s funds have suffered poor performance, with numerous questions raised about positions taken in his portfolio, particularly concerning illuqid small cap and unlisted companies.

Similarly, Jason Hollands, managing director of Bestinvest, says that the announcement follows a period of “prolonged, significant underperformance". He points out that Barnett’s funds at Invesco had been prominent in the last few editions of Bestinvest’s Spot the Dog report, which names and shames consistent underperformers.

Hollands says the writing on the wall “has been there to see for some time.” He points out that Barnett was previously removed as head of UK equities at Invesco, being made co-head last year. In December 2019 he was removed as manager of Edinburgh Investment trust.

On top of that, Invesco recently implemented a 60% reduction in the valuation of unquoted holdings held in Invesco’s funds, which affected the holdings in several of Barnett’s funds. Hollands says: “This was a painful move, but one which has at least eased concerns around liquidity in the open-ended funds.”

Hughes argues that by getting rid of Barnett, Invesco is attempting to make a “clean break” with the underperformance of its UK-focused funds in recent years.

He notes: “With a review of the UK range also having taken place, Invesco clearly want to try and get its UK franchise back on the front foot, however it will take a long time for the new managers to turn around performance.”

Ben Yearly, director of Shore Financial Planning, makes a similar point, noting: “Invesco is taking the opportunity to tidy up its UK fund range, which has numerous equity income offerings.”

He also points out that Invesco are merging its UK Strategic Income fund in with the Income fund, thereby “making a clearer difference between Income and High Income.”

Commenting on the departure, Stephanie Butcher, Invesco’s chief investment officer, said: “In 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; we wish to place on record our appreciation of Mark’s profound commitment to both clients and colleagues over 24 years.”

This article was originally published in our sister magazine Money Observer, which ceased publication in August 2020.

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