Edinburgh Investment Trust - Barnett sacked

[Penguin]

I see Mark Barnett has finally been given his marching orders. I think this is the right decision. I have nothing against a value approach but his stock picks have been a little wayward

Replacement is by Majedie Asset Management - any views?

[Dod101]

I noted that in this morning's paper as well. I am glad that for once Edinburgh IT Directors have been decisive. As for Majedie, they used to be very poor but that was many years ago when all they did was run a not very good family IT. I think it was one of those trusts that had originally been a Malaysian rubber plantation owned by one family.

Then about 20 years ago they set a up a fund management company. I have no views because I have been out of touch for a long while. I will just stay with Edinburgh where I have been a shareholder for about 25 years. I am unlikely to change now although I was considering selling around the end of the year. Now that Invesco have been given the boot I will just stay put because a new manager is surely going to do better.

Dod

[dlp6666]

Just had a quick look at Majedie on Morningstar.

Their UK Equity Fund is the only one which has an analyst rating (but it is only 'Neutral').

Some of the global funds do have 4* or 5* ratings, but the Majedie UK Income Fund is only 3*.

And the MAJE investment trust just gets a 2* Morningstar rating.

So it looks like these new managers are nothing to write home about!

[Dod101]

I suspect that dip6666 is probably correct although in its announcement this morning, Edinburgh says that whilst Majedie's style is not dissimilar to Barnett's, Mark Barnett's main problem was stock specific. Things like Burford Capital, Provident Financial, and some small unquoted shares. So we'll see. I will hang on anyway.

Dod

[scotia]

So it looks like these new managers are nothing to write home about!

On looking at 5 year total returns in UK Income funds, I came to a similar conclusion. Past experience of the Board's choices of manager is not impressive - according to the Glasgow Herald In 2002 they sacked Edinburgh Fund Managers, and chose Fidelity, then six years later they changed to Invesco, with Woodford in charge, then Barnett took over in 2014. Even if an outstanding new manager has been selected (and this looks doubtful), they will have to handle the accumulated dross before managing to impose their own investment philosophy. Possibly the news of a new manager may provide a reduction in the discount - and give long suffering investors an escape hatch. But I can't think of any reason why it should encourage new investors until there is a significant NAV improvement.

[Dod101]

They had a good record whilst Woodford was in charge but have gone downhill since he left. The new managers are reported to be saying that they will change more than 50% of the shares in the Trust and to help the costs involved, they will not charge a fee for the first three months. Furthermore, the fee is being reduced with the new managers to 0.48% on the first £500 million and for anything over that, 0.465%. Currently the fee is 0.55% so that is quite a big reduction.

Dod

[Arborbridge]

All very unsettling. I'll probably just sit tight, but I don't particularly like change which might be from frying pan into the fire.

I notice Mark Barnett still listed on Trustnet and AIC which presumably have yet to be updated.




Arb.

[Dod101]

I like change from someone as pig headed as Barnett appears to be. I imagine that it will at least a year and probably more to see how the new lot get on. That I think was his problem. He just was convinced he was right and would not change tack.

Dod

[Arborbridge]

I like change from someone as pig headed as Barnett appears to be. I imagine that it will at least a year and probably more to see how the new lot get on. That I think was his problem. He just was convinced he was right and would not change tack.

Dod

That's a difficult one, isn't it? A manager has to be very confident that he is correct, and probably needs a very thick skin to push through his ideas. Probably the most successful managers have been seen to be pig-headed, as you call it, at various times.

Someone once said that one requires one's leaders to be lucky as well as right. Poor old Tony Dye was wrong for years, but then for a brief spell was right - after everyone had abandon him, then he died. Sir Alex Ferguson was very nearly thrown out for being a woeful manager in his first few years at Man U, but he was pig-headed enough to persist and was right in the end.

I wonder how much of this lack of performance is due to a particular style being out of fashion, and how much to really poor decisions he should be villified for. Let's beware of hindsight!

[Dod101]

A good several there, Arb.

Being out of fashion is of course how Barnett will see himself, but on this day of all days, one needs to be political as well as believing in yourself.. The fact is that I as a poor shareholder in Edinburgh IT need the money now not when (or if) the market turns in my favour. I admire the fact that Arb seems to be very forgiving but we need results now not when the market moves in Barnett's favour. After all, even a stopped clock.......

Dod

[Arborbridge]

A good several there, Arb.

Being out of fashion is of course how Barnett will see himself, but on this day of all days, one needs to be political as well as believing in yourself.. The fact is that I as a poor shareholder in Edinburgh IT need the money now not when (or if) the market turns in my favour. I admire the fact that Arb seems to be very forgiving but we need results now not when the market moves in Barnett's favour. After all, even a stopped clock.......

Dod

Yes, very true.. This is always my dilemma, though: how long to give something before moving on. Maybe I am too laid back, too patient. I know some would be off as soon as performance had dropped a whisker, but I think of it like those supermarket queues: I am always fated to change queues just as my original one speeds up!

I've no idea what the solution, except I do a bit of this and a bit of that. I've often admired people on here who are so sure of what they are doing (actually, you are one such person) whereas I stumble along broadly in the right direction. Rather like a random walk down Wall St. Oh to be so sure of myself that I could be called "pig-headed".

[Dod101]

Arb, you are on form! I am not I think pig headed but certainly I can decide and then move on. The pig headed Barnetts of the world think they know best and stick with their views for far too long. Sometimes it costs them!

If the exit poles are anything like right, this could turn out to be a good day!

Dod

[bluedonkey]

What an enjoyable exchange!

[nmdhqbc]

The timing is interesting. Just before the election. It's almost as if they wanted to sack him just before some of his domestic focused pick start to rebound.

[Dod101]

The timing is interesting. Just before the election. It's almost as if they wanted to sack him just before some of his domestic focused pick start to rebound.

I doubt that very much. The announcement was made on the same day as their half year results which were dire. One day's uplift would I am sure have made not the slightest difference.

Dod

[Arborbridge]

If the exit poles are anything like right, this could turn out to be a good day!

Dod

I think Poles have been exiting since the referendum, have they not?

[Dod101]

Sorry, freudian slip maybe?

Dod

[Dod101]

I have just received the half year report to 30 September. One item caught my eye. I do not hold Eddie Stobart I am glad to say, but Edinburgh has just written down its holding in Stobart from £11,901,000 at 31 March 2019 to £966,000 at 30 September. Any wonder that Barnett has been sacked when he also held Burford Capital and I think Provident?

Dod

[77ss]

I have just received the half year report to 30 September. One item caught my eye. I do not hold Eddie Stobart I am glad to say, but Edinburgh has just written down its holding in Stobart from £11,901,000 at 31 March 2019 to £966,000 at 30 September. Any wonder that Barnett has been sacked when he also held Burford Capital and I think Provident?

Dod

I dumped EDIN just over two years ago. Putting the money into TR Property. One of my better decisions (so far, anyway).

Will there be a turnaround in performance under new managers? Difficult to see it happening quickly, and there is always the possibility that one will just get a new set of mistakes!

[PinkDalek]

I have just received the half year report to 30 September. One item caught my eye. I do not hold Eddie Stobart I am glad to say, but Edinburgh has just written down its holding in Stobart from £11,901,000 at 31 March 2019 to £966,000 at 30 September. ...

Thanks for the snippet. Please refer to viewtopic.php?p=273239#p273239 and if you know what value Schroder's are currently ascribing to their holding, kindly respond here or preferably there.