Mark Barnett has been hired by specialist equity boutique Tellworth Investments almost a year after he left Invesco following a prolonged period of underperformance.
Barnett is joining the firm, which was founded by former Schroders fund management duo Paul Marriage and John Warren, with plans to "establish an income-focused franchise in the future".
The former Woodford protege is joining the nine-strong team this month having left his role at Invesco last year (May 15) after 24 years with the firm.
Barnett had a challenging few years at Invesco before his departure. He managed the open-ended Income and High Income funds, which lost about 40 per cent over a three-year period, compared with a UK All Companies sector average loss of 14 per cent.
Both funds ranked in the lowest quartile in the sector over three-month, six-month, one-year, three-year and five-year periods at the time.
The manager was also sacked from the Edinburgh investment trust in December 2019 and replaced by Majedie Asset Management’s James de Uphaugh.
Barnett took over the management of most of his funds when he replaced Neil Woodford as head of UK equities at Invesco in 2014.
He deployed the same value style of investing as Woodford, and had major investments in many of the same companies as his former boss, including chronic underperformers such as Stobart Group and Provident Financial.
Barnett said: “I am extremely impressed by the team at Tellworth and the quality business they have established over the past three years.
“We share an investment philosophy based on long term, bottom-up fundamental analysis and active portfolio management.
“I am excited to join the business and establish an income-focused franchise, which reflects my optimism on the significant potential for the UK stock market.”
Founded in 2017, London-based Tellworth manages more than £800m of assets across four equity vehicles – a long-only UK smaller companies strategy, two long/short UK funds and a long/short pan-European portfolio.
Marriage said: “The addition of a talented investor such as Mark – who has a strong track record of alpha generation in the UK over the long term – further strengthens our team as we look to capitalise on the broad range of opportunities we see within UK equities.”
A chance to "rebuild"
Ryan Hughes, head of active portfolios at AJ Bell, said the announcement would "no doubt surprise a few people” but added it presented an “interesting opportunity” for Barnett to rebuild his reputation.
Hughes said: “Paul Marriage and John Warren, who set up Tellworth, are shrewd investors and will no doubt see the opportunity to work alongside someone as experienced as Barnett as one that has the potential to really help grow the business from the strong start it has had in its initial focus on smaller companies and then taking on the Sanditon funds.
“For Barnett, this is the opportunity for him to prove he still has the ability to deliver strong UK equity returns for investors without the shadow of his previous roles hanging over him.
“Taking on the funds at Invesco formerly managed by Neil Woodford was always going to be a difficult challenge for anyone and perhaps inevitably it played out that way, although I’m sure Barnett will admit that he made some mistakes along the way too. The opportunity now, to start with a blank sheet of paper, no legacy holdings and no unquoted companies that couldn’t be sold will no doubt be an exciting one.”
Jason Hollands, managing director at Tilney, agreed this was an opportunity for Barnett to rebuild his career.
Hollands said: “Barnett resurfaces at pivotal time: UK equities are back on investors radars once again and ‘value’ investing - a focus on cheap, unloved shares which is his signature style - is starting to look relevant after a long period in the wilderness.
“A key test will be how quickly a fund can be up and running for Barnett and whether the firm can attract assets.
“While the number of value managers has thinned over the years as the approach has been out of favour, funds like Fidelity Special Situations and Jupiter Income are already up and running that have largely escaped sustained periods in the kennel of worst performers.”
amy.austin@ft.com
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