Leading fund manager Neil Woodford is to leave Invesco Perpetual and step down as manager of a number of funds. Mark Barnett, who runs funds including IC Top 100 Fund Perpetual Income and Growth (PLI) investment trust, will replace him as head of UK equities after he leaves on 29 April 2014. He will take on three of Mr Woodford's funds: Invesco Perpetual High Income (GB0033054015), Invesco Perpetual Income (GB0033053827) and Invesco Perpetual UK Equity Pension and there will be no changes to their investment objectives. Mr Woodford will be setting up his own asset management business.
Mr Woodford has a highly successful record of over 25 years at Invesco. For example, £1,000 invested in Invesco Perpetual High Income between October 1990 and the end of September this year would now be worth £23,265, a total return of 2,224 per cent, compared with £9,714 if invested in the FTSE All-Share. As a result of his imminent departure, a number of analysts have placed their ratings on his funds, which were generally favourable, under review.
Read more on Neil Woodford and Invesco Perpetual High Income
But Invesco points out that Mr Barnett has the same active, valuation-driven investment approach and long-term focus as Mr Woodford. Mr Barnett's funds have also delivered strong returns: Invesco Perpetual UK Strategic Income (GB00B1W7J535) is among the top performing UK equity income funds over one, three and five years. And IC Top 100 Fund Perpetual Income and Growth is one of the best performing UK equity income investment trusts and beats Mr Woodford's Edinburgh Investment Trust (EDIN), also an IC Top 100 Fund, over one, three and five years.
Mr Barnett will continue to run Invesco Perpetual UK Strategic Income Fund, Perpetual Income and Growth Investment Trust, Keystone Investment Trust (KIT) and Invesco Perpetual Select Trust's (IVPU) UK equity portfolio .
Such expanded responsibilities "bring the question as to whether or not he is able to manage his existing mandates in the same way - with the ability to invest more in mid/small cap stocks," according to Charles Cade, head of investment companies research, Numis Securities.
"Assuming responsibility for such a significantly larger sum of money could prove very challenging for Mr Barnett," adds Justin Modray of Candid Financial Advice. "He will likely need to invest in more stocks and place larger big picture bets than he is used to in order to add meaningful value to the funds."
Read our interview with Mark Barnett
Edinburgh Investment Trust's management situation is less clear: the trust's board could decide to keep Mr Woodford as manager, stay at Invesco with another manager or appoint another asset management firm. The trust's share price fell on the news of Mr Woodford's possible departure and is now on a discount of 0.6 per cent, in contrast to a premium of 4.2 per cent yesterday.
Meanwhile, Ciaran Mallon assumed management of the equities portfolios of IC Top 100 Fund Invesco Perpetual Distribution (GB0033947333) and Monthly Income Plus (GB0033051334) on 15 October. He also runs Invesco Perpetual Income and Growth Fund (GB0033053488) and Invesco Income Growth Trust (IVI).
