Aberdeen Standard, River & Mercantile, Fidelity and Schroders are among the likely candidates to take over the reigns of Perpetual Income and Growth, experts have predicted.
Yesterday morning (April 6) Invesco’s embattled head of UK equities, Mark Barnett, was sacked as manager of the £418m trust following an “extended period of underperformance” against the company’s benchmark.
The move — which followed a warning from the board last November about the trust’s chronic poor performance — saw its share price jump nearly 6 per cent on the day.
The board is now searching for a new manager and has hired consultancy firm Mercer to lead the search alongside Winterflood Securities, urging asset managers to indicate their interest by April 17.
Adrian Lowcock, head of personal investing at Willis Owen, said Charles Luke at Aberdeen Standard, James de Uphaugh at Majedie and Nick Kirrage and Kevin Murphy at Schroders were “three standout managers” and likely frontrunners who could “turn the trust around”.
He said: “Aberdeen Standard has been fairly active in taking on new mandates and it has the resource and experience of managing investment trusts. Among its managers, Mr Luke looks to be a good match for the mandate.”
Mr Luke and Thomas Moore took over Neil Woodford’s Income Focus fund just a few months ago.
Meanwhile, James de Uphaugh replaced Mr Barnett as manager of the Edinburgh Investment Trust in December 2019. Mr Lowcock said: “[Majedie] could well be in the mix for this. Mr de Uphaugh has already proven he can impress the board of investment trusts.”
Schroders, well-known for its value style, would be a clear choice for continuation of Mr Barnett’s value strategy.
Mr Lowcock said: “[The board] might consider established value investors, and one which stands out is the Schroders value team led by Nick Kirrage and Kevin Murphy.
“They have the expertise of running a value income strategy, along with the resources to support an investment trust.”
Darius McDermott, managing director of FundCalibre, agreed on Schroders, Majedie and Aberdeen Standard if the board decided to maintain Mr Barnett’s value strategy, and added River & Mercantile into the mix of options.
He added: “If they go for quality growth, then Baillie Gifford would be a good bet."
But Ben Yearsley, investment consultant at Fairview Investing, disagreed, saying Aberdeen Standard likely had too many UK investment trusts and noting Mr Luke had already taken on the old Woodford fund.
He suggested Richard Buxton — founder of Merian Global Investors — would be a good fit, but noted the merger between MGI and Jupiter had not completed yet so it could be “a long shot”.
Ryan Hughes, head of active portfolios at AJ Bell, also thought it was unlikely that the mandate was awarded to a manager who already ran a similar trust, adding this would rule out the likes of Aberdeen Standard and Majedie.
He said: “There are a number of potential candidates to replace Invesco as manager of the trust but it will very much be dependent on which route the independent board wants to follow.
“But clearly the mandate will be attractive to many UK asset managers given the challenges many managers face in raising assets in their open-ended funds.”
Michael Clark, fund manager at Fidelity, is a good choice for the board if they choose to stick to a similar style of manager, according to Tom Sparke, investment manager at GDIM, who said he had a “safety-first style of investing and a long track record in this space”.
Mr Sparke added: “If they want something different, I would say a good choice might be Ben Needham of Investec, who has produced some excellent risk-adjusted returns from a concise portfolio of UK equity dividend stocks.”
FTAdviser approached each firm for comment. Investec, Majedie, Baillie Gifford and Fidelity said they would not comment at this time while River & Mercantile, Aberdeen Standard and Schroders did not respond.
imogen.tew@ft.com
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