Daniel Godfrey targets 7% returns with 'People's Trust' launch

A new investment trust run by former industry chief Daniel Godfrey is appealing to private investors to back the launch of his new fund - The People's Trust.

Godfrey, who quit as chief executive of the Investment Association (IA) last year, is seeking to raise £100,000 to help cover development costs ahead of a planned IPO in the first half of 2017.

Godfrey, who as part of his pro-consumer agenda had campaigned for transparency on fund charges, resigned last October after two major fund houses - M&G and Schroders - signalled their intent to leave the organisation. Prior to the IA Godfrey was director general at the Association of Investment Companies from July 1998 to October 2009.

A year on from leaving the IA Godfrey has unveiled details of his new venture, which he says is "designed to eliminate conflicts of interest" and have "a long-term, high-conviction, low-turnover, high-engagement approach".

'Better returns, better impact on society'

It will cost £20 to become a founder, or £10 for those under 35. Founders will be offered the opportunity to invest ahead of IPO at a discount. Once trading, investors will be able to invest through weekly savings of just £10.

The trust, which will aim to deliver annual returns of 7% over seven-year periods, will be free of shareholder influence, as it will be 100% owned by customers.

Therefore it will be run entirely for their benefit, says Godfrey. The trust's executives will not be paid bonuses, but will be rewarded in shares, providing they are held for a seven-year period.

Better investment practices would give investors more, and have a positive impact on societyThe new venture will provide investors with a "long-term, high-conviction, low-turnover, high-engagement approach that aims to deliver the best possible returns". It will also allocate 1% of assets to improve lives directly via social impact investment.

Godfrey says the trust's purpose is clear: "Better investment returns for you and a better impact on society." He acknowledges the need for improvement around how consumers are treated and how money is managed by the investment industry.

"Costs and charges could be much simpler and more transparent, making customers better informed," he adds. "Short-term pressures and incentives could be replaced with longer-term thinking and investing, creating more growth.

"As well as giving investors more, better investment practices like these would have a positive impact on society - generating not just better returns, but a better future for everyone."

The trust will be run by a small number of investment managers and Godfrey has been supported by First State Investments, Orbis Investments and Big Issue Invest, who will be among the potential managers.

Willis Towers Watson will be appointed to advise the board on selecting and monitoring those managers.

For more information and to participate, visit the trust's website.

This article was originally published by our sister magazine Money Observer here

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.