The People’s Trust has launched an offer for subscription, an intermediaries’ offer and a placing of shares with a target of raising £125 million by the closing date of 10 October 2017 in its prospectus.
Developed by the former chief executive of the Investment Association, Daniel Godfrey, The People’s Trust has been designed to resist the short-term pressures within the financial services industry so it can focus on sustainable wealth creation through high-conviction, high-stewardship and low-turnover investment rather than short term relative returns, The People’s Trust has five equity managers to execute its strategy.
Its primary objective is to deliver long-term total returns measured over seven-year time horizons, with no index benchmarks and it has crowdsourced its set-up costs from over 2,400 founders who wanted to have a fund created for the benefit of investors, “rather than to be a product created by a commercial enterprise” according to the prospectus.
In addition, The People’s Trust will pay no performance fees to portfolio managers and no bonuses to executives, and aims to list on the London Stock Exchange and the Social Stock Exchange on 17 October 2017. The board, including Mr Godfrey, are to invest over £1.5 million at launch. The non-executive directors are to waive fees in full and Mr Godfrey is to waive half his salary for two years or until the company reaches net assets of £250 million if earlier.
The prospectus also notes that one percent initially (and five percent maximum) will be allocated to social impact investment, aiming for modest returns from investments, whose purpose is to have an impact on social deprivation initially in the UK.
Mr Godfrey commented: “The People’s Trust has created our own investment chain, so that we can focus on long-term, sustainable wealth creation without the short-term pressure that plagues the investment chain.
“Short-termism may be caused by profit risk and career risk, but it has done enormous damage to investor returns and to the potential that long-term investment has to make the world a better place.”
Leader of the Liberal Democrats, Sir Vince Cable, said: “The People’s Trust has created a structure and purpose which is able to challenge the present model. Writing as an individual who sought in government to promote ‘long-termism’ in financial markets I hope that The People’s Trust will be a success.”