Mark Barnett’s departure from Invesco was related to performance issues and had nothing to do with his handling of unquoted companies or the fact he was fired from two investment trusts he managed, the company’s chief investment officer has said.
Speaking on a web conference for investors on Monday, Stephanie Butcher, whose reshaping of the firm’s UK equity investment team resulted in Barnett leaving the firm, said the decision was based solely on a review of “the long-term potential for the funds, what was best for clients, and the right set up of the range”.
Butcher (pictured) said: “The UK income franchise under Mark Barnett’s head, as you will all know, had been under significant pressure for some time. I spent considerable time since coming into the role looking at the entire UK equity fund range, the team structure, the process and the individuals in order to assess the best combination of products to ensure the strongest offering for clients, and to underpin the future of the franchise.”
Unquoted write downs was the right thing to do
In March, Invesco said it was preparing to rid Barnett’s UK equity income funds of unquoted companies with the holdings facing a 60% write down in their value. Butcher, who became CIO in January, said this decision was made independently, it was one she agreed with and did not colour her judgement on the restructure.
“I think it is a sensible move, I think the requirement for liquidity, both from clients and the environment we’re in, is clear. We’ve made a lot of progress on the quoted side and there’s the intention on the unquoted side as well, but the decision in terms of personnel wasn’t related to that.”
Barnett was ousted from two investment trusts in the past six months – the Edinburgh Investment Trust in December and the Perpetual Income & Growth Investment Trust last month.
When asked by Invesco head of UK distribution Alex Millar whether Barnett’s exit was related to the unquoted write downs or the investment trust decisions, Butcher said: “No, not at all.”
But, at another point during the conference call, she said: “There had also clearly been significant performance issues which go beyond the style explanation.”
Butcher flags Barnett’s ‘integrity and professionalism’
Butcher, who stepped into the CIO role in January, said she had not acted sooner because it was important to first conduct a thorough review of the funds and the wider team and speak to all stakeholders, including clients.
Butcher paid tribute to Barnett’s “integrity, professionalism, his care for his clients and some of the great success the funds had seen under his stewardship” over the 24 years he spent at Invesco.
> See also: Invesco faces long road stymying outflows despite end of the Mark Barnett problem
“But we both think that the time is now right to make this change,” she added. “We all wish him nothing but the best in the future.”
Goldstone and Mallon tight-lipped on plans for funds
Portfolio managers James Goldstone and Ciaran Mallon, who have replaced Barnett as co-managers on Barnett’s open-ended funds, were tight-lipped on their strategic plans for the funds, saying it would not be in the interests of clients to give away too much at this stage.
Goldstone said: “We understand that you’ll want to know what we’re planning to do with the portfolios, but we hope you’ll recognise that given market impacts, it wouldn’t be in the best interest of clients to get into specifics at this stage.
“We know where we are going, we have made a good start, we’re keen to come back and talk to you in the appropriate time once the changes have been made.”
Liquidity is key and unquoted selling will continue
Goldstone did say, however, liquidity remains “key” and a lot of work has been done over the past year in that regard which the duo intends to continue.
“The decision was taken by Mark to sell unquoted assets and redeploy the capital, this disposal processes is ongoing and our intention is to continue with this approach.”
Butcher said: “The strengths of Ciaran and James have shone through, they’re highly respected by their clients and by those of us who have worked with them in the partnership funds they’re currently involved with across the investment floor.”
