The much anticipated launch of The People’s Trust has been cancelled, following a lack of demand from large investors.
The multi-manager trust set up by Daniel Godfrey, the former chief executive of the Investment Association, aimed to strip out ‘short-termism’ by handing fund managers seven-year contracts in order to deliver ‘better long-term returns for our shareholders’.
Godfrey was dramatically ousted from his position in the Investment Association in 2015, when he tried to implement a set of reforms that would bring about more transparency for consumers. He pledged to run the People’s Trust for the benefit of shareholders in making use of economies of scale to reduce charges.
But despite experiencing a ‘significant level of interest from retail investors’, the trust did not receive support from large investors. Godfrey says the amount raised ‘was not enough, in the absence of sufficient additional support from institutional investors and discretionary wealth managers’. As a result the directors of The People’s Trust took the decision that the amount raised was not viable to list on the stock market. The trust had targeted £125 million, setting a minimum amount of £50 million.
Godfrey adds: ‘It’s always hard to break the mould. While we have not succeeded on this occasion, the case we have made for a fundamental change in the investment chain has definitely left some cracks.
‘Our argument, for the investment chain to abandon its focus on short-term index-relative returns in favour of sustainable wealth creation and the stewardship to support it, has been widely accepted. One day it will happen - to the great benefit of investors, society and the economy.’
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