Rory Powe, the high profile manager of Invesco Perpetual’s giant European Growth unit trust has resigned and will leave the company in December to establish his own hedge fund operation.
Powe, who has worked for the company for 16 years, has managed the £1.75 billion (INVESCO Perp Eupn Gth Inc) fund since May 1991 and has posted a strong long-term record.
However, the trust’s avowed growth bias and its high exposure to technology, media and telecom stocks has led to dreadful performance over the last 18 months.
Over the last 10 years the trust has posted a 379% return compared with a 221% average return among Europe (Excluding UK) unit trusts and a 236% total return on the FTSE World Europe (Excluding UK) index.
But over the last 18 months the trust is down 52.6% while the sector and benchmark are down 24.6% and 18.6% respectively, without the impact of initial charges considered.
Powe ranks twentieth of 39 managers over three years in the Europe (Excluding UK) sector of Citywire's Funds Insider database although he is in sixty-fourth place of 64 managers over the last 12 months.
Investors in the European Growth fund are advised not to make any knee-jerk decision, especially as Powe will remain manager until December when a clearer decision can be taken.
Powe has admitted he was wrong to view technology stocks as long-term secular growth stories as these businesses have demonstrated a strong cyclical nature, which has hurt his fund.
However, in July he told Citywire investors who stick with the fund will be vindicated. He said: ‘I know there are a lot of unhappy investors who bought in March 2000, and they have every right to be irritated. The recovery will not be easy from here, it will be a long haul but it will be a lucrative long haul.’
Today Invesco Perpetual announced Powe will not be there for this long haul and responsibility for the fund will be handed over at the end of the year to Alister Hibbert.
Hibbert has seven-and-a-half years' experience of European equities and has been part of Powe’s team for three years. He has held primary responsibility for the company’s offshore Invesco GT Continental European fund since April 2000 – it has suffered similarly poor results over this period.
A spokesman for the company said: ‘Powe is a prominent investor but we have a coherent team behind him and there will be no change in the investment philosophy.
‘The portfolio has been restructured and now has a very low exposure to technology, media and telecom stocks. We remain confident its performance will turn around.’