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Citibank swaps Invesco's Barnett for Artemis' Stuart in pension fund

Citibank swaps Invesco's Barnett for Artemis' Stuart in pension fund

Citibank has replaced Invesco Perpetual on a UK specialist fund mandate in its pension scheme due to concerns about Neil Woodford’s resignation and his replacement Mark Barnett’s ability to manage such a volume of assets.

Citibank has dropped the Invesco Perpetual High Income fund and awarded the mandate to the Artemis UK Special Situations fund, which is managed by Citywire AA-rated Derek Stuart.

In a letter to investors, Citibank explained that the pension fund’s trustees and their advisers had become concerned about both Citywire AAA-rated Barnett’s (pictured) ability to deal with running vastly greater sums than he has previously, and the possibility of additional resignations from the Invesco Perpetual team.

‘The trustee’s investment adviser expressed concerns following the announcement about Neil Woodford’s forthcoming departure and believes that his resignation will be a big loss to Invesco,’ wrote Citibank.

‘As Neil Woodford is to move to Oakley Capital Management post his departure from Invesco, there also remains the risk that there could be further departures from the investment team at Invesco. Furthermore, the trustee’s investment adviser expressed concerns surrounding the new portfolio manager Mark Barnett, who has not previously managed the quantity of assets that he will inherit from Neil Woodford.’

Over the past three years, Artemis UK Special Situations has returned 39.2%, while Invesco Perpetual High Income is up 50.8%. The FTSE All Share index has risen 28.8% over the same period.

The loss of the Citibank mandate is the latest blow to Invesco Perpetual and Barnett. In April, St James’s Place pulled just shy of £8 billion from the firm, handing £3.5 billion of that to Woodford’s new venture.

‘The significance of this decision and the benefits of our investment approach were further underlined following the announcement [of Woodford’s resignation] that responsibility for the Invesco Perpetual funds previously managed by Neil was being handed over to another manager earlier than had previously been announced, at the beginning of March. For investors in those funds, the decision had been taken out of their hands,’ St James’s Place told clients.

At the end of last month, the Financial Conduct Authority fined Invesco Perpetual £18.6 million for risk failings linked to two of Woodford’s old funds.

In total, Invesco Perpetual Income has lost £2.3 billion of assets since Woodford’s exit was announced in October last year, while Invesco Perpetual High Income has shrunk by £900 million.

Citibank, Invesco Perpetual and Artemis declined to comment.

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Derek Stuart
Derek Stuart
58/155 in Equity - UK (All Companies) (Performance over 3 years) Average Total Return: 56.43%
Mark Barnett
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13/72 in Equity - UK Equity Income (Performance over 3 years) Average Total Return: 71.00%
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29/72 in Equity - UK Equity Income (Performance over 3 years) Average Total Return: 58.64%
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