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* Follows period of underperformance, Woodford blow
* James Gladstone, Ciaran Mallon to run open-ended funds
* UK Strategic Income Fund, Invesco Income Fund to merge
(Recasts, adds background, bullet points)
By Maiya Keidan and Simon Jessop
LONDON, May 15 (Reuters) - Invesco Ltd said money
manager Mark Barnett would leave the company after 24 years,
ending a tough couple of years in which clients pulled billions
from his funds.
Barnett was impacted by the high-profile collapse of former
Invesco colleague Neil Woodford's firm, after it turned the
spotlight on their shared and long-standing p, actice of holding
relatively large positions in illiquid assets, which may be hard
to sell quickly.
Woodford ultimately chose to close his firm after his
flagship fund was forced to suspend dealing having struggled to
free up cash to pay back clients seeking to leave. It also
prompted the regulator to take a closer look at the practice.
Fund rating agency Morningstar cited the issue of illiquid
holdings when downgrading Barnett's Invesco High Income UK and
Income UK funds in November, a move he rejected at the time,
saying they were "appropriately positioned".
With many of Barnett's listed holdings also performing
poorly, hit in part by a period of underperformance for
UK-focused companies, investors continued to pull their money.
Invesco's UK Strategic Income, High Income and Income funds
had seen collective outflows of just over 2 billion pounds
($2.44 billion) in the year to September 2019.
While Invesco appointed Martin Walker as co-head of UK
equities alongside Barnett in November, it was not enough to
stop him being dropped as manager by the Edinburgh Investment
Trust in December, and last month by Perpetual Income
and Growth Trust.
After appointing Stephanie Butcher to the role of chief
investment officer at the start of the year, Invesco announced
in March plans to sell all of its unlisted equity holdings and
reinvest the money in listed stocks.
Invesco, which also announced a reorganisation of its UK
Equity product portfolio, said on Friday that James Gladstone
and Ciaran Mallon will be taking over as co-managers of the
open-ended funds that Barnett was responsible for.
"As we reorganise the UK Equities portfolio and after
discussion with Mark Barnett, we have mutually concluded that
this is the right time for him to hand over the leadership of
these funds and leave Invesco," Butcher said in a statement.
"When I became CIO in January, I made it clear I would not
shy from introducing change where I saw it necessary.”
The Invesco UK Strategic Income Fund will also be merged
with the Invesco Income Fund, according to the release.
"Invesco clearly want to try and get their UK franchise back
on the front foot, however it will take a long time for the new
managers to turn around performance," said Ryan Hughes, head of
active portfolios at AJ Bell.
($1 = 0.8201 pounds)
(Reporting by Maiya Keidan and Carolyn Cohn in London and
Samantha Machado in Bengaluru;
Editing by Emelia Sithole-Matarise and Louise Heavens)
