One of the world’s biggest asset management groups is shaking up the stewardship of its flagship UK funds in an attempt to stem billions of pounds of outflows.
Sky News has learnt that Invesco has appointed Martin Walker, one of its senior fund managers, to the role of co-head of UK equities alongside Mark Barnett, whose funds have seen an exodus of clients’ money.
The move to install Mr Walker alongside Mr Barnett, who manages more than £12bn in funds, is understood to have been finalised in recent weeks.
While Mr Barnett’s role as a money manager remains small in the context of Invesco’s total funds under management of $1.2tn (£930bn), the shake-up will nevertheless be closely watched in an industry where individual fund managers can attract huge retail and institutional followings.
It comes amid the ongoing fallout from the crisis which engulfed Neil Woodford, the former star stockpicker who has been forced to relinquish the management of billions of pounds of clients’ funds.
An attempt by Kent County Council to withdraw £250m from Woodford Investment Management (WIM) in May triggered a decision by the fund administrator to prevent investors from pulling out their money.
WIM, which for several years was the most lauded new entrant into the multitrillion-pound UK fund management industry, subsequently announced that it would close.
Mr Barnett’s performance has been under intense scrutiny since WIM’s problems began to deepen because he is frequently referred to as Mr Woodford’s protege after their long tenure working together at Invesco.
Sources said that Mr Walker’s elevation had been decided upon after pressure from a number of major clients about the performance of Mr Barnett’s funds.
Morningstar, the consultants, recently downgraded Invesco’s High Income and Income funds citing “stock selection issues” and their exposure to smaller and illiquid companies.
Mr Barnett’s performance looks more impressive when judged over a longer period, with the Strategic Income Fund – managed by Mr Barnett since 2006 – having delivered returns of 113% over the last decade.
Last month, Mr Barnett offered a mea culpa to his investors but insisted that he was determined to improve returns, saying that income generation had remained strong.
“At Invesco I am not just accountable to my investors,” Mr Barnett wrote.
“I am also accountable to teams of highly experienced and qualified professionals, as well as layers of experienced senior management.
“I am supported to make independent investment decisions, yes, but I am also accountable and well-challenged.
“I am the named portfolio manager, but I am not my own boss.”
A number of Mr Barnett’s biggest holdings, such as those at Burford Capital, the litigation finance firm, and doorstep lender Provident Financial, have fared poorly this year for a range of reasons.
Insiders sought to avoid portraying the shake-up as a demotion for Mr Barnett, and insisted that it would allow him to spend more time on stock-picking.
Responding to an enquiry from Sky News, Invesco said in a statement: “Invesco confirms that Martin Walker has been appointed co-head of UK equities alongside Mark Barnett, effective 1 January.
“The co-head model is long established at Invesco; for example, this is also in place for our Asian, emerging markets equities and fixed income franchises, where it works particularly well for our larger teams.
“Mark and Martin have worked together for 20 years, [and] as such he is [a] key member of the UK equities team.
“They have a strong working relationship and common understanding for how they want to continue to develop the team for the future.”
Invesco added that Mr Barnett and Mr Walker continue to run their current portfolio of funds with no changes.
The crisis at WIM has sparked concerns about regulators’ oversight of fund managers and administrators, amid expectations that retail investors will lose a substantial chunk of their investments in Mr Woodford’s vehicles.
Mr Barnett could not be reached for comment.