Daniel Godfrey has revealed details of his planned investment company The People’s Trust, which will include a social impact element and plans to “change the system”.
Fund Strategy first revealed Godfrey’s plans about the business launch in March this year, five months after he left the Investment Association.
The trust will be launched in the first quarter of next year.
The fund will seek total returns of 7 per cent annually over a seven-year period and will be accessible to anyone who save from £10 a week. As a starting point, the fund will be 1 per cent invested in charities and community interest companies with a direct social impact.
The global fund, which will invest an unconstrained manner and will be 100 per cent own by its investors, will seek to achieve its returns by avoiding permanent loss of capital.
By December, the trust seeks to raise at least £100,000 from founders who want join in with backing for its development costs before the IPO on the London Stock Exchange.
Godfrey says: “There are a lot of people and funds who will accept that the potential for investment and finding better returns is there. But why are they not doing it? That is because of pressure in the system from shareholders, clients and managers.
“This fund is different as it aims to radically change the system and you can only do this outside the conventional system.”
Initial costs for the trust, which include a free ISA and savings plan will be between 1 and 1.5 per cent a year but they are expected to decrease as the fund grows in assets. Godfrey says the fund will be also accessible on a platform to be developed in-house.
Godfrey says: “We are not trying to be the cheapest, but we are trying to be the best. Short-term periods can be a big divergence like other funds.”
As for its management, Godfrey aims to hire up to 10 portfolio managers to manage around 10 holdings. Currently, investment consultancy, Willis Towers Watson, are advisers on selection and ongoing monitoring of investment managers.
First State Investments, Orbis Investments, and Big Issue Invest are also supporting investors.
As previously announced, future employees of the trust will be paid a straight salary, but no bonus.
Godfrey also plans to create a board of around eight people for the business. He has already appointed former founder and director of wealth management firm Ruffer Jane Tufnell to be an independent director.
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.”
Prior to being chief executive of the Investment Association Godfrey was director-general of the Association of Investment Companies.