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Mark Barnett: how I’m different to Woodford

by Dylan Lobo on Oct 18, 2013 at 12:30

Mark Barnett: how I’m different to Woodford

We all knew it was going to happen one day but when it did it still came as something of a shock.

Once Wealth Manager realised the press release informing us that Neil Woodford had resigned from Invesco Perpetual wasn't a joke, our thoughts - with some sympathy - went to his heir-in-waiting, Mark Barnett (pictured).  

The challenge is immense. Citywire AA-rated Barnett, who at 43 is 10 years Woodford’s junior, has probably had more column inches dedicated to him this week than the entirety of the last few years. He is now national news.

Barnett is not daunted by being thrust into the limelight and taking on the task in hand. ‘I’m very excited by the opportunity and the challenge. It’s a big promotion for me and I accept everyone is going to be watching me now but I’m not going to behave differently,' he told Wealth Manager.   

In Barnett’s favour is the fact that he has worked alongside Woodford for almost two decades. ‘I’ve worked for the team for 17 years, I’ve sat next to him and had privileged access to him, so I’m in an unique position to preserve and build on his track record,’ he says.    

In this time Barnett says he has learned a number of key things from Woodford and draws on two key lessons. ‘Neil has taught me how to be objective and about the need to be patient, take a long term view and cut out the noise so you can focus on what’s valuable within a business.

‘[He has] also taught me that the best interaction with companies is always done behind closed doors, around the meeting room table.’

What makes Barnett different

Barnett’s performance in recent years suggests he has paid close attention to his mentor.

In the last five years Barnett has returned 93.8% on his Invesco Perpetual UK Strategic fund versus a peer group average of 74.9%, earning him a Citywire AA-rating and outstripping A-rated Woodford’s aggregated return of 72.3% over the same period.

Part of this outperformance was due to a higher exposure to mid-caps and while Barnett says there are plenty of similarities between his and Woodford’s styles, there are also one or two differences. ‘Neil  takes a stock view on how it translates to his macro view. While I do this to a certain extent I take a more pragmatic view at the stock level,' Barnett explains. 

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4 comments so far. Why not have your say?

Peter Barrett

Oct 18, 2013 at 12:53

Warren Buffet was a disciple of Benjamin Graham and he hasn't done too badly by taking a long term view.

Good luck to Mark Barnett I am sure he has learnt lots from Neil Woodford and that he will do very well.

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David West

Oct 18, 2013 at 14:25

I wish both Mark and Neil very good luck in going forward.

Neil has made a considerable amount of money for me over the last few years and I will be watching closely next year what he will be doing and how I might participate as an individual investor in his new management business.

I also hold Keystone Investment Trust which Mark manages and I am very happy with what he has achieved.

My only concern is that with the size of the High Income and Income Funds Mark may have a difficult job in managing both the flexibility going forward and the associated outflows that might happen. If there are large outflows this will increase the funds charges going forward. If because of the potential outflows they are forced to sell enough shares in their underlying holdings, this in turn may effect the share prices of those companies - particularly the small cap ones. That will have a knock-on effect on other funds and trusts invested in the same companies. I guess time will tell.

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Alexander P

Oct 18, 2013 at 15:47

The interesting story when it comes out is WHY has Neal Woodford chosen now to go. Has there been a diagreement on investment philosophy within Invesco Perpetual?. I dont know him personally but from his public utterings he does not come across as a man who feels he needs to prove anything or does he and has his investment direction been questioned by his co-managers. Just have to wait for the investagative journalists to keep digging.

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Ian Lees

Oct 20, 2013 at 08:51

The reality of the situation is Neil Woodford served Invesco Perpetual well, served his clients, and served investors very well over the years. Any good financial planner wil have a well diversified asset allocation - of which Invesco Perpetual and Neil Woodford's funds would be core holdings. Has that changed ? In my opinion NO ! How we serve our clients going forward . remains unchanged - and avoiding the " Noise" as Mark Barnett's is welcomed as much as his long term investment philosophy - and in particular the backing of Invesco Perpetual. Is the reason for Neil Woodfords departure needed ? Are there opportunities in Neil Woodfords new fund ( s ) - I believe so - because of the great returns - and protection against the downside ( e.g Tech Bubble etc.,) Neil Woodford has made for me and my clients. There are other checks and balances required - but I am of the opinion that Invesco Perpetual has a great reputation has served my clients well - over decades. The best part is Invesco Perpetual keep me up to date with matters - explain their reasons behind some of their decisions - assist with training - develop education - and offer great service and great returns over many funds - which allows us to develop good asset allocation - to build sound portfolios - wit the appropriate amount of risk.

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