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Barnett replaces Woodford on Edinburgh Investment trust

Mark Barnett will assume management of Neil Woodford’s £1.11 billion Edinburgh Investment trust.

 
Barnett replaces Woodford on Edinburgh Investment trust

Mark Barnett will assume management of Neil Woodford’s £1.11 billion Edinburgh Investment trust following the latter’s move to Oakley Capital, the trust’s board has announced.

The board and Invesco Perpetual have agreed a flat fee of 0.55% a year and a £7.5 million reduction in the upper limit of any performance payment to mitigate the portfolio transition, it added.

The news provides long-awaited certainty for investors who were considering whether to stick with the trust after the news that Woodford was stepping down from Invesco. The trust has fallen to a discount of -2.8%.

City analysts were upbeat on the appointment, pointing out that significant changes to the existing portfolio were unlikely: 'Barnett is an experienced fund manager with strong credentials and an impressive track record in UK equity income investing,' commented Paul Kavanagh of Killik & Co. 'With no wholesale changes to the portfolio expected the fund should continue to provide exposure to an attractive basket of high-quality companies.'

Investment trust analysts at Numis agreed the trust would be in 'safe hands' under Barnett. But they questioned whether Barnett needed to run three UK equity trusts: Edinburgh, Keystone and Perpetual Income and Growth Investment Trust (PIGIT). 'We believe there is a strong case for consolidation of the trusts, in particular regarding a potential merger of PIGIT and Keystone, which have very similar portfolios,' they said.

Jim Pettigrew, the trust's chairman, said: ‘Mark shares the same active, value-driven investment approach and long-term focus as Neil Woodford and comes to us with an excellent track record built up over many years of managing money.'

5 comments so far. Why not have your say?

Cautious Investor

Jan 28, 2014 at 12:41

Good news, I'd say.

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talbot

Jan 28, 2014 at 16:35

Yes good news indeed

But he does seem to have a lot on his plate

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Broomtree

Jan 28, 2014 at 17:22

Should provide stability but as with Talbot, reservations about how thinly he will be spread bearing in mind he will be looking after the two massive OIEC's for Invesco

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getting more concerned every day

Jan 28, 2014 at 17:25

Only a complete financial meltdown will stop Mr. Barnett in his tracks, and I can't see one of those coming along before April

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Ark Welder

Jan 28, 2014 at 18:26

Calls to merge Perpetual I&G and Keystone are misplaced. The two have different investment mandates and are suited to different types of investor.

PLI is in the Growth & Income sector (as was) for a very good reason: a growing income forms part of its mandate and can be shown by the 6.8% p.a. growth in the dividend over the past 5 years. KIT has a growth objective, and the dividend is a side issue as can be seen in the 1.9% p.a. dividend growth in the last 5 years.

The portfolios might have similarities at the moment but this is a side effect of where the investment manager sees the best growth opportunitites for KIT. Once the best opportunities move elsewhere then KIT will be free to follow, but PLI will not - at least, not to the same extent.

PLI is suited to investors who have an income requirement as their priority. KIT is suited to investors that are interested in the total return. These two requirements really are not the same.

I sometimes get the impression that there are financial professionals that just can't think outside the total-return box.

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