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Fund stars are hit hard as Marconi share price halves

Invesco Perpetual took a 100m hit last week as Mar- coni’s share price crashed.

Star fund managers Neil Woodford at Invesco Perpetual and Fidelity’s Anthony Bolton were among the major shareholders caught out, along with Credit Suisse income man- ager Leigh Harrison.

Invesco Perpetual was the single biggest shareholder in the troubled telecoms equipment producer with 23 per cent spread across four funds.

Marconi’s share price bombed by 46 per cent over two days on news that it was not among the eight companies shortlisted by BT to carry out work on its planned 10bn network upgrade.

A quarter of Marconi’s revenue comes from BT business and the news was a shock to the market.

The stock plummeted by 38 per cent on Thursday last week and went down again by a further 12 per cent on Friday.

The 92m Invesco Perpetual UK aggressive fund, managed by Ed Burke, had the biggest single percentage holding at 4.2 per cent and he held a further 2.5 per cent in the 939m UK growth portfolio, according to Bloomberg.

But both Woodford, manager of the 3.69bn high income and 1.85bn income mandates, and Bolton, manager of the 4.79bn Fidelity special situations fund, held bigger stakes in cash terms. Other funds with significant holdings include Gartmore UK focus and Schroder UK alpha plus.

Hargreaves Lansdown investment manager Ben Yearsley says the losses, first revealed in Fund Strategy, are significant loss for two days. He says: “They knew the risks and it has not come off. A lot of high-profile names have been caught out and you will see a spike down in performance from this week.”

Cavendish opportunities fund manager Paul Mumford says: “It shows the risk of investing in companies that are reliant too much on one particular customer.”

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England vs Australia: pensions

Well, the cricket season is here, and England and Australia are stepping up to the wicket. Although we compete with each other in the sporting world, when it comes to pensions, Australia’s pension programme is held up as a model for our auto-enrolment initiative. Auto-enrolment was introduced because people weren’t saving enough into their pensions, and it is still early days but signs are positive. However, in Australia, saving into a pension is compulsory, and in fact employers are the ones who have to pay in. Employees in Australia can make additional contributions into their pensions, but they don’t have to. Should the onus be on the employer or employee to save? Well in the UK we think it’s both, but to get ‘adequate’ savings for retirement it’s the employee who has to pay more in.

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