Invesco CIO on the progress made post-Barnett

Invesco CIO on the progress made post-Barnett
Stephanie Butcher, chief investment officer at Invesco

Invesco’s chief investment officer is “really pleased” with the progress made by the fund since former-star fund manager Mark Barnett left the company earlier this year.

Stephanie Butcher told FTAdviser Invesco had made “a lot of changes” since Mr Barnett’s exit in May in a bid to ensure the firm had the “right mix” on the investment floor.

She said: “We’ve made a lot of changes, focusing on making sure we had the right mix of product and structure on the investment floor.

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“We’ve adjusted some of the processes and the forums where fund managers interact to improve and enhance the communications between fund managers and teams.

“I’m really pleased with the progress there, and it’s worked really well. The voices of the fund managers are really coming through.”

The fund house announced in May it had “mutually agreed” with Mr Barnett that he would leave the company with immediate effect, with James Goldstone and Ciaran Mallon set to take over as co-managers of his open-ended funds.

It followed a challenging few years for Mr Barnett, whose flagship Income and High Income funds had lost about 40 per cent over three years at the time of his departure.

With performance suffering, redemptions had compounded the pressure on Invesco.

As part of the shake up, James Goldstone and Ciaran Mallon took over as co-managers of the funds.

Other changes made by Ms Butcher included a reorganisation of the Invesco UK Equity product range.

This saw the introduction of a clear distinction between the Invesco High Income and Income fund and the merger of the UK Strategic Income fund with the Invesco Income fund.

Ms Butcher told FTAdviser the firm had also made “big changes” to improve liquidity. She said: “We recognise the client and regulatory side has shifted [on illiquid assets] and I think on that side of things the staff have done a fantastic job.”

In November 2019, ratings agency Morningstar downgraded the Invesco funds, citing their exposure to smaller and illiquid companies. 

Mr Barnett said at the time he "fundamentally disagreed" with those assessments, adding he had "materially changed" the way the funds invested in unquoted companies, as well as halving their overall exposure to such businesses, since taking over the portfolios from Neil Woodford in 2014.

But Ms Butcher added: “The reality is that you can never say everything’s done. It’s an ongoing process and a dynamic industry.

“The shape of the investment floor, I’m very happy with and we’ve got some decent performance coming through as well.”

Ms Butcher added that there was a “lot of hard work” required to go through this degree of change in the firm, noting that Invesco did not anticipate the external change, the coronavirus crisis, it would be working with too.

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