Shunned fund manager Mark Barnett tries again
Neil Woodford’s former right-hand man, Mark Barnett is back with a new job less than a year after he left Invesco following several years of poor performance from the two high profile income funds he ran.
Barnett is joining Tellworth Investments, founded by ex-Schroders fund managers Paul Marriage and John Warren, to launch an income fund, capitalising on UK companies restarting dividends after disruption to shareholder payouts during the pandemic.
The fund manager started his investment career at Mercury Asset Management in 1992, joining Invesco in 1996 where he spent 24 years, rising to the role of head of UK equities.
He successfully employed a contrarian approach, looking for areas of the market which were mispriced or unloved, with a focus on sustainable cash flows and dividends.
He took over the management of the Invesco Income and Invesco High Income funds when Woodford left Invesco in 2014. Unfortunately, he immediately had to deal with investors cashing out as they followed Woodford to his new fund venture.
Barnett also suffered from market concerns over liquidity as the portfolios ended up with a greater percentage of small and mid-cap stocks.
Tellworth will no doubt be hoping that Barnett does better if he builds a new portfolio from scratch, rather than having to reshape an inherited one, such as he encountered when Woodford left Invesco.
The asset manager last year tried to launch the Tellworth Recovery & Growth Trust, with the aim of investing in large, mid and small cap stocks which are either UK businesses and global leaders in their respective niche, good British businesses on distressed valuations because of Covid-19, or British companies with promising technology. Unfortunately, it failed to generate enough interest.
A spokesperson for Tellworth says there won’t be another attempt to launch this product. However, they did say the company would ‘definitely have a conversation’ with any investment trust seeking a new manager.
Just under half of Tellworth’s £800 million of assets under management are in the Tellworth UK Smaller Companies Fund (BDTM8B4) which returned 46.7% in the six months to 12 April versus 32.1% from the IA UK Smaller Companies sector, according to FE Fundinfo.
Writing in its latest factsheet for the fund, Tellworth says: ‘Our decent start to the year feels like more hard-earned payback for our faithful investors who sat tight while we bleated about how much upside the UK could see on a Brexit deal and a reopening UK economy.
‘The reason why we feel that this portfolio remains well set despite the decent run is the breadth of its exposures across the small cap market and inherent lack of style bias.’
DISCLAIMER: Editor Daniel Coatsworth has a personal investment in Tellworth UK Smaller Companies Fund.