You may have heard the announcement which came last month. FMB’s Chief Investment Officer (CIO), Richard Hancock, has been researching the impact this will have on our clients and looking for the best course of action.
On 15th October 2013, Neil Woodford (most well-known for running the Invesco Perpetual Income and the Invesco Perpetual High Income funds), revealed that he will leave Invesco Perpetual in April 2014 after more than 25 years with the firm in order to set up on his own.
With Woodford currently managing assets in the region of £33 billion (almost half of Invesco’s £70 billion assets under management (AUM)), the announcement has no-doubt come as a huge blow to Invesco and it’s investors and it is expected that the news of his departure (set to be 29/04/14) will lead to billions of pounds worth of outflows and redemptions from the funds.
Fellow Invesco fund manager, Mark Barnett, will take on the majority of the £33 billion that Woodford currently manages when he steps down in April and will be taking over the Income and High Income funds. Barnett (aged 43) has been at Invesco for 17 years having started his investment career at Mercury Asset Management four years before that.
FMB’s CIO, Richard Hancock, advises, “Any significant change such as this will always cause a stir, however, while I believe that Bennett is very capable at taking over the reins from Woodford (in fact his performance numbers are better than the investment guru’s himself), I still expect there to be significant outflows from the fund which will, in itself, cause a lot of problems for the new manager. We are currently in the process of writing to any clients who are affected by these changes and will be offering a review to discuss the best solution. Different courses of action will suit clients in different situations, as with most things in this industry, it is not a case of one size fits all. We will probably encourage most to move assets into their core multi-asset strategy but we also have a number of alternatives on our panel both for those investing for income and those just wanting to benefit from the long term growth potential of the UK Equity Income sector.”