Investments  

Call for Edinburgh ‘beauty parade’ to replace Woodford

Industry experts have called for the board of the £1.4bn Edinburgh Investment Trust to consider a ‘beauty parade’ for management control of the trust.

The trust has been managed by Invesco Perpetual’s Neil Woodford since 2008, but the manager is leaving the group in April next year following his unexpected resignation.

The trust’s board told shareholders in its half-yearly report last week it would “like to take some time to consider the options for the future management of the company” before making a decision.

Article continues after advert

But experts have urged the board to allow other groups to pitch for the trust, known as a beauty parade.

“It is illogical not to give other managers at least the chance to pitch,” argued Rob Jones, investment analyst at Liberum Capital. He said he expected the board to hold a beauty parade in February or March next year, adding if the mandate changed hands, it would have to be “someone with a fantastic track record” running UK equities.

David Coombs, head of multi-asset at Rathbone Unit Trust Managers, said: “Any investment trust should follow this process when the named manager leaves the mandate – the [size of the trust] is irrelevant – it is good corporate governance.”

Stephen Peters, investment trust analyst at Charles Stanley, said if Mr Woodford’s successor Mark Barnett took on the trust he would be involved in managing five closed-ended funds alongside his open-ended duties.

“Five run by the same manager in the same group is not a good use of capital,” he said.