This morning (December 11) the trust's board confirmed that Mr Barnett, who succeeded Neil Woodford as manager in 2014, would be replaced as manager by Majedie Asset Management's James de Uphaugh.
Over the past three years the trust has lost 1.5 per cent while its sector, the AIC UK Equity Income, gained 19 per cent in the same time period. Over the past year the trust returned 4 per cent, while the sector returned 12 per cent.
Glen Suarez, the trust's chairman, said he was "disappointed" to learn that the trust's interim results, also published today, extended the fund's underperformance to beyond three years.
Mr Barnett has managed his various funds in the expectation the UK economy would perform better than the market expected, and he deploys the value style of investing which has been starkly out of favour with the market for most of the past decade.
Both of those investment trends have started to reverse in recent months, and the trust has been among the best performers in the sector over the past three months.
Mr Suarez said that while he recognised Mr Barnett’s style had been out of favour, and that all conviction fund managers experience periods of underperformance, he concluded action was needed due to “stock specific issues.”
He said: “Since 2018, the board has examined more closely the approach used to select stocks, as well as the methods and approach to portfolio construction. Then the board extended its appraisal to cover all aspects of investment oversight."
Mr Suarez said that earlier this year the board hired Willis Towers Watson as a consultant to bring an independent perspective on the portfolio, alongside Investec Bank.
Mr Barnett also runs the £6bn Invesco High Income and £2.8bn Invesco Income funds which are both among the worst performers in their sectors over the past three years.
The High Income fund has lost 1.82 per cent over the past three years while the IA UK All Companies sector has gained 19.7 per cent.
Several of Mr Barnett's funds own significant stakes in companies which Mr Woodford, his former boss at Invesco, also owned. Several of these companys, such as Provident Financial and Stobart Group, have performed poorly.
Mr Woodford’s Equity Income fund was suspended in June when redemptions reached £9m a day due to the fund's poor performance. The fund is currently in the process of being wound down.
Last month Mr Barnett defended his investment approach, denying he faced the same liquidity problems as Mr Woodford.
Another of the trusts Mr Barnett runs, the £941m Perpetual Income and Growth trust, has also underperformed - gaining 0.68 per cent over three years while the AIC UK Equity Income sector gained 19 per cent.
Its board recently warned Mr Barnett that its poor performance could not continue.
Majedie runs a global investment trust, and has an open-ended UK equity fund, which is £2.6bn in size.
The fund is jointly run by Mr de Uphaugh, who is chief investment officer at Majedie. The fund is among the bottom 25 per cent of funds in the IA UK All Companies sector over the past one, three and five years.
Majedie will not receive a management fee for the first three months.
Mr Suarez said: "The board believes that James has the right approach to meet our company’s objectives of capital appreciation and dividend growth over the long-term."
Mr de Uphaugh added: "Majedie’s long-term, flexible investment approach, incorporating a commitment to responsible capitalism backed by fundamental analysis, is well suited to an investment trust that seeks total returns from both income and capital growth."
david.thorpe@ft.com
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