Invesco’s Barnett: I’m not coming at this cold

Invesco Perpetual’s Mark Barnett has said he will not be taking on Neil Woodford’s portfolios “cold” having worked alongside the star manager for many years.

Speaking to Investment Adviser, Mr Barnett said it was too early to elaborate about how he would implement his style on the Income and High Income funds saying he had “not made up my mind yet”.

“There are overlaps in the large holdings between mine and Neil’s portfolios,” he said.

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“I am not coming at this cold - I know a lot about many of the companies in Neil’s funds.”

Mr Barnett acknowledged running the large portfolios would be a new challenge but one he was prepared for.

“I have not run portfolios this size but I am probably the best placed to do that having been part of the team as long as I have been,” he said.

“I have worked with Neil for the past 17 years.”

The manager said he would be spending much of the transition period between now and April, when Mr Woodford leaves, meeting clients and getting to know the smaller companies at the tail end of the Income and High Income portfolios.

“There are a selection of small companies particularly in the tail of the portfolios which I need to get up to speed with,” he said.

He added: “There clearly will be things I want to do over time but I won’t inherit the funds and make changes on day one. It will be evolution rather than revolution.”

The manager said when he met clients he would be discussing what they could expect from his management and leadership.

“The transition period allows me to meet clients and reassure them of the style of fund management they have become accustomed to and appreciated for 25 years,” he said.

“That style and philosophy will not change. The style and approach Neil has is one I endorse and I share lots of the thinking about the right way to get fantastic long term returns for clients.”

Mr Barnett has a self-imposed limit of 6 per cent for an individual stock in his fund but Mr Woodford has been known to invest larger chunks of his portfolio in his highest conviction ideas - AstraZeneca and GlaxoSmithKline are more than 8 per cent positions at present.

Asked if he would breach his self-imposed limit when he takes on Mr Woodford’s funds, he said: “That may be something I think about when I take over management of the funds.”

Ian Trevers, head of distribution, said the issue of outflows would be different to the experience of other companies when key staff had left.

“The situation here is very different as we are not looking for someone to manage these funds,” he said.

“Neil is doing it now and Mark will be. Mark has been managing money for a long, long time. The situation is not analogous to other situations that there have been with competitors or other situations where there has not been clarity.