But amidst the fund manager fanfare, there wasn’t much in the way of true detail about the People’s Trust’s proposed investment strategy.
Investors were left in the dark about expected costs, asset allocation and the starting size of the trust, all crucial factors to consider before deciding to invest.
“The challenge with any portfolio like this is not just the quality of each underlying manager but how the sub-portfolios are put together. That will be one of tests,” said Kemp.
Speaking to Portfolio Adviser, Godfrey has now shed further light on his planned asset allocation strategy and the estimated costs involved in maintaining it.
From a cost perspective, Daniel said if the fund achieved a size of £125m could expect ongoing costs of around 125bps.
He said he also aimed to keep the fund manager rate paid to underlying investment managers below 65bps.
To Architas investment director Adrian Lowcock, both figures seem reasonable and in keeping with Godfrey’s mantra of long-term, sustainable wealth creation and his desire to make his trust as accessible as possible.
“It is effectively a fund of funds mandate so that sounds about right,” he said.
“£125m is achievable at the starting point and that does make it affordable.”
The 65bps fund manager rate is “also a good starting point,” he said, cautioning that “multi-manager pricing pressure is always difficult” and requires constant attention.
On the asset-allocation side, Godfrey has proposed an equal 20% split between the five portfolios comprising the trust.
It is “easy to overdiversify or average out” performance, which is why the trust’s mandate includes “more concentrated portfolios than you normally would see”, he said.
