The People’s Trust, a retail investment fund seeking to challenge market short-termism, has postponed its launch after not raising sufficient capital in an initial public offering (IPO).
The People’s Trust is the brainchild of Daniel Godfrey, former chief executive of the Investment Association, who left after opposition to his support for greater transparency from asset managers.
He set up the People’s Trust to move away from a focus on “short-term index-relative returns in favour of sustainable wealth creation and the stewardship to support it.”
But despite raising £100,000 from founders towards set up costs, it did not raise sufficient capital to reach a level considered by the directors to be viable.
Its planned listing on the London Stock Exchange and the Social Stock Exchange would “not be proceeding at this time”.
Godfrey said: “There was every indication that had we achieved critical mass, the People’s Trust would have gone on to thrive. Disappointingly, this was not to be. Unfortunately, retail investor interest alone, whilst substantial, was not enough in the absence of sufficientadditional support from institutional investors and discretionary wealth managers.”
The People’s Trust was seeking to raise at least £75m and would focus on long-term, sustainable investing, measured over seven-year timeframes.
The Trust would have also allocated 1% to social impact investment through Big Issue Investment Fund management.
“It’s always hard to break the mould”, said Godfrey. “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.”
The firm had lined up managers including names like Artemis Investment Management, First State Investments, J O Hambro Capital Management and Lansdowne Partners.