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First State backs Daniel Godfrey’s fund launch plan

First State backs Daniel Godfrey’s fund launch plan

Former Investment Association (IA) boss Daniel Godfrey has secured backing from First State Investments as he lays the groundwork for the launch of an investment trust targeting 7 per cent returns.

Mr Godfrey, who is looking to raise £100,000 for the development costs of The People’s Trust ahead of an initial public offering next year, said First State, Orbis Investments and Big Issue Invest were supporting the initiative. 

The firms will also be “among the potential investment managers in a portfolio managed by between five and 10 managers at launch”, he added.

The trust, which will not pay bonuses to employees will offer investors the ability to invest £10 a week to encourage interest from consumers who have not previously made investments of their own.

Ahead of that, it is seeking 'founder' contributors to pay £20 apiece, or £10 if they are under £35, in order to meet development costs.

The trust's 7 per cent return target will be measured over a seven-year period, seen as a proxy for a typical business cycle. Mr Godfrey said holdings were likely to constitute global equities, although the trust will be able to invest across asset classes. One per cent of assets will be allocated to “improve lives directly” via social impact investment.

Costs at launch are expected to be between 1 and 1.5 per cent, though these could fall if economies of scale kick in.

The venture follows Mr Godfrey’s departure from the IA last year, having failed to gain the backing of his board amid suggestions that Schroders, M&G and other members were considering quitting the trade body.

He said of the trust: “There is need for improvement in the industry, particularly around how customers are treated and money is managed. Most people think investing isn’t for them – we’re aiming to change that.”