Daniel Godfrey, founder of the People's Trust, has said the “thesis” on which the fund was based remains valid and revealed why he thinks it failed to achieve critical mass.
In announcing the cancellation of the proposed trust yesterday (10 October), ex-Investment Association chief Mr Godfrey said interest from retail investors was robust but take-up from wealth managers and other Institutional investors was the below the level required to make the trust “viable.”
The trust was due to list on the London Stock Exchange and the Social Stock Exchange on Tuesday (17 October).
The target for the fundraising was £125m, with a minimum of £50m required to proceed.
In an exclusive interview with FTAdviser after he announced the proposed listing of the People’s Trust will not go ahead, a deflated sounding Mr Godfrey said the amount raised was “less than £50m.”
Mr Godfrey said: “There were some wealth managers keen on the idea. It was not the case that there was no interest.
"What we found was that the fundamental thesis of the trust was something people liked and agreed with. But what you realise is, being just one link in the chain, which we were, no matter how strong the link, is not enough to change the whole chain.”
One of the points made by critics of the People’s Trust is the level of the proposed fees, at more than 1 per cent.
Trusts with a similar multi-manager global mandate, such as Witan Investment Trust, charge 0.75 per cent.
Mr Godfrey said: “The idea is that the charges would fall as the trust would achieve scale, all of the benefits of scale would be passed onto investors.
"So wealth managers who are concerned about the fees, the way to remedy it is to put cash into the trust to get the fees down.”
Mr Godfrey had said he would take only half his salary until the trust had reached assets of £250m.
He added the holdings of the People’s Trust would have looked so different to the index that the differential in fees would not have been the main contributor to performance.
Jason Hollands, managing director for business development and communications at Tilney Group, said the asset allocation of the trust may have put potential investors off, as equal weighting to renewable energy assets and Asia Pacific equities would not typically be how a wealth manager constructs a portfolio.
Darius McDermott, managing director at Chelsea Financial Services, said the trust was not as unique in its construction as perhaps the original creators of the trust had envisioned.
Mark Dampier, head of fund research at Hargreaves Lansdown, said the trust would have been competing with funds such as Witan and RIT, which pursue a similar global multi-manager approach but with “proven track records.”
david.thorpe@ft.com
